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Online fail

19th May 2020

Working from home and limiting movement has pushed a lot of shopping online in many countries affected by the COVID-19 pandemic and subsequent lockdowns. The question that is starting to rise as economies tentatively open, is will some of these changes become permanent? If more people are working from home, avoiding the commute and eliminating travel to meetings, what are the are wider implications for retail, transportation, technology and commercial real estate?

The disruption to lives appeared the perfect opportunity to push more shopping transactions online. But for many supermarkets the surge of online demand resulting from COVID-19 panic-buying found them severely wanting. While many consumers were forced, or preferred to online shop for their groceries for convenience and safety, they were met with hours spent refreshing websites, only to be told the service was not available.

In Australia Coles and Woolworths stopped taking online orders in mid-March for same-day pick up and delivery, while Coles also struggled to fill orders. Online orders were cancelled and refunded or delivered incomplete. What should have been an opportunity to offer convenience and safety, instead highlighted online shortcomings when predictable shopping behaviour becomes erratic.

It wasn’t just local supermarkets that failed the online test. In the US, online services like Instacart and Shipt were pitched as literal lifelines that could deliver food and other necessities to millions of homebound Americans. However surging demand, and inadequate supplies of groceries and workers meant the system cracked.

In mid-April, shoppers were reporting weeks-long waits on platforms like Instacart, Shipt, Peapod and Amazon’s Prime Now. At the time, analysts said the delivery hiccups will likely be long term, even as companies hired and trained tens of thousands of new workers. Moderating demand and managed expectations have eased the pressure somewhat as shoppers learn they have to plan ahead. Obviously planning ahead detracts a lot from the convenience that online shopping is supposed to deliver. This is a global failure – providers simply have not been able to quickly scale up for what is a huge surge in demand.  Have they missed a golden opportunity to migrate more customers online?