The spread of coronavirus and the government’s preventative measures are likely to have a significant impact on the economy as a whole. Many Czech companies may face serious problems. At the time, some online stores are experiencing much higher demand for their services (exceeding Christmas season peak). In this article, we provide recommendations for online store owners and managers to help them cope with this difficult time. As the situation continues to evolve, we will update the article. At the same time, please follow the #covid19ecommerce hashtag on social networks to share more information and recommendations.
Recommendations for the industry
/ published 17.03.2020, 10:00 /
Switch to remote work and social distancing
Recommend all employees work from home. This will encourage everyone to work remotely and will be useful in the future. If this is not possible, it is advisable to introduce employees to a shift work format so that if one of them gets infected quarantine measures will not affect the functioning of the entire company. And don’t forget about equipping employees with face masks. If employees don’t have a medical one, encourage them to use improvised one (scarves, hand-sewn drapes).
Customize the ordering process
Some online stores have already added notifications to their order forms asking customers if they are quarantined at the moment. If the customer orders the goods in quarantine, the seller will notify the carrier so that it can adapt to the situation (contactless delivery). Another measure of some online stores is the temporary cancellation of cash on delivery payment method (while maintaining the possibility of contactless payment by card).
Pick-up points are allowed
Shipments from online stores can be still delivered to the pick-up points and directly to the customers. Some logistics companies try to protect their employees who contact customers (especially drivers) and equip them with face masks.
The closing of most brick and mortar stores caused difficulties for many online stores and their customers. However, as per the government order, a shift toward using postal services is still permitted.
Some physical stores can be open and work as a pick-up point and at least partially compensate for lost income.
Improve the pick-up point
We recommend customizing the pick-up to minimize human-to-human contact. Do not let customers go into the store. Hand over the goods to customers only in the doorway or behind a protective glass. Use rubber gloves and face masks. Do not accept cash and disinfect the surfaces of pick-up points.
Despite closed borders for the movement of people, international shipments have not been affected by restrictions imposed by the government. However, one of the logistics companies Zásilkovna.cz has not exported shipments to Italy since Monday, March 16, 2020 (see the latest info on the Zásilkovna blog, PPL, InTime, Czech Post).
One must take into account that due to border controls, the delivery time of parcels may be longer.
Update your business plan and track your cash flow
Has the current situation affected sales in your e-shop? Are your sales decreasing? Update your business plan, map areas where you can generate savings so you don’t lose liquidity. Get inspired by an interview with Michal Koubek about crisis management during the coronavirus era.
The government approved interest-free loans for firms affected by coronavirus. You can ask the Czech-Moravian Guarantee and Development Bank for an amount from half a million to 15 million Czech Crowns. The COVID special program offers an annual deferral of installments and extension of the repayment period for two years. However, it is necessary to prove that you have been directly influenced by government regulations related to the situation around coronavirus.
Lawyers from eLegal.cz have raised the topic about compensation for the damage caused to your business by coronavirus measures taken by the state. The result can be found in the article.
Take advantage of people who are currently unable to work and companies with overcapacity of warehouse operators, drivers, cars or call centers. Offers of cooperation can be found on social networks (FB groups, Twitter, etc.) and some portals. Additionally, if you have employees that cannot contribute currently to your company, consider cooperating with other online stores who may require additional hands or help during this period.
For more useful advice, watch a video with Martin Rozhoň about crisis management, online stores issues and employee safety:
The effect of coronavirus on current ecommerce
Change in customer behavior
Even before the national quarantine was announced, many customers moved from crowded supermarkets to online shopping, and this is a logical precaution. They avoided not only possible infection of COVID-19, but they also reduced the pressure and demand on brick and mortar stores – we have already seen in other countries how this resulted in empty shelves. The biggest increase in demand was recorded in online stores with food, medicines and medical supplies, and drugstores (Rohlík.cz and Košík.cz report a five-fold increase in the number of customers). Due to the quarantine, it is anticipated that online sales of consumer goods, books, and online streaming services will also increase.
The lack of selected goods in the physical stores forces customers to search for these products online. Even those customers who have never bought online before. It is likely that this shift from offline to online shopping will persist for a significant percentage of customers until the end of the pandemic. We expect this to have a positive impact on the entire ecommerce industry.
Diversification has a big advantage for merchants who already sell online and offline. Based on this experience, it can be expected that interest in investment in omnichannel technologies will increase and retail digitization will grow faster than projected.
The cost of fear
Unfortunately, even in this difficult time, there are people who want to get the most out of themselves at all costs. They exploit the fear of the population in hopes of enriching themselves. It is a normal phenomenon of economics that a large excess of demand over supply leads to price increases. Fortunately, the main industry online players (Pharmacy.cz, Pilulka.cz) have not decided to follow this path. However, exceptions have been found, mostly small online stores, which have abused the situation and have multiplied the prices for the products (especially face masks).
Lead your business through it
It may sound like a cliché but dealing with this crisis is a part of running any business. We have to face it and overcome it. Shopsys remains committed to serving its clients and remaining open and available to recommendations as events unfold. If you have any questions, please contact your Product Owner.