The lockdown has created such a demand for online shopping big food retailers are unable to keep up, but analysts say the need for delivery of groceries will slow when the economy reopens.
Nielsen Global data analytics research company predicts that after the coronavirus pandemic, retail online sales and food delivery will grow globally, even in China where it is already the norm. The global research company surveyed 10,000 Chinese retailers and found two thirds said online channels would grow in importance.
But in SA analysts say going to the shops is considered recreation.
Gryphon analyst Casparus Treurnicht says: “For the biggest chunk of the population it is almost considered an outing when doing their buying.”
During the lockdown many people have preferred to avoid heading to the shops to reduce their chances of being exposed to and transmitting the virus. So retailers have added more delivery services in a bid to meet the demand.
For restaurant meal delivery company Uber Eats, online flowers and gift shop Netflorist and Bottles, an app for ordering alcohol delivery, all have switched to delivering groceries, in some cases partnering with big retailers.
Unable to meet the demand for grocery delivery, Pick n Pay franchise stores has pioneered a click and collect service, whereby drivers can pre-order groceries and have them brought to the car when they arrive at the store parking lot. It has expanded to 18 stores.
Treurnicht says this may take off.
“One thing that I do see changing is buy and collect. The potential is massive. Think about a drive-through where you complete your buying online during the day and reminders are communicated electronically. This would be convenient and cost effective considering that retailers can save on shelf space,” he says.
Manny Nichas, CEO of restaurant chain Mozambik, believes online delivery will no longer be mostly for large retailers selling food and general merchandise after the outbreak.
“From restaurants to boutiques, grocery stores and department stores must plan now to implement delivery services and [ensure] a significant online retail presence,” he says.
The restaurant group is working on an online delivery platform for itself and other restaurants and is in talks to expand to non-food retailers.
However, investment analyst Chris Gilmour is sceptical about the growth of online food shopping. He says its first iteration was in 1999 when online food delivery was launched by Jessica Knight and Woolies with a service called In the Bag. “There have been 21 years of online food delivery and it’s hardly moved the needle,” he says.
The reasons behind previous slow uptake include poor and unstable broadband and poor logistics, which have since improved. But Gilmour says it is expensive when adding in delivery charge and “people will feel obliged to tip the delivery guy”.
“Johannesburg is full of really good, upmarket shopping malls, where people go for theatre as much as anything else. Weekend shopping is a major event for the whole family who take the kids, do food shopping, buy clothes, have coffee or brunch, lunch or even dinner,” he says.
But even a slight increase in online shopping allows better digital personalisation of marketing.
Euromonitor’s global research company latest report What's new in Retail, notes how Danish app Too Good To Go connects consumers with nearby stores that have unsold surplus food at cheaper prices to reduce food waste.
“Eco-conscious consumers are gravitating towards retailers that minimise waste. Retailers can leverage technology to deliver environmentally friendly solutions,” it says.
This suggests that online shopping may allow for nuanced services and apps aimed at consumers’ individual needs.
With social distancing expected for months after the lockdown is lifted, shops will have to provide more hygiene, disinfectants and spacing within queues, says Nielsen.
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