Although the implications to business from the COVID-19 are many and still unfolding, one already established growing trend will get a big boost: home delivery. Several retailers are already offering this service. But now this business is about ready to explode.
Many customer who prefer to shop in person so they can choose the products they buy, especially produce, will now be compelled to order by phone or online due to social distancing. All retail environments will be forced to offer delivery. Once people become used to this convenience, even after the virus subsides, many more will prefer this type of shopping. Home delivery, as a business, will get a big boost! And, unfortunately, with global travel, there will be more pandemics.
Of course there will be some bumps as delivery companies try to assure their customer that the handling, packaging, and delivery people are free of the virus. This may hasten drone delivery.
Having actually built a CPG branded product from the ground up, we are concerned about the reduced opportunity for new brands to gain traction that will necessarily follow this move. Up until now, it has been possible to go to the store with certain brands in mind and come home with a totally new and different brand that you bought impulsively, a brand you stumbled upon, or a brand you just had a notion to buy.
Impulse buying has been the driver for many new brands to get noticed. It’s very difficult to reproduce that kind of a brand building opportunity online. Sure, there can be pop-ups and notices that say “People who purchased (what you just selected) also bought…”
And the sites can charge exorbitant fees to have your new brand visible as an ad to those who look like your target audience. But those approaches can’t hold a candle to actually seeing, feeling, and comparing a new branded product that you have discovered because you were confronted by a display in a physical market.
This change will make it more difficult for new brands to get established and, at the same time this change will guarantee the extended life of already existing brands. Why not just get the same order over and over again? Why ask for anything new? You probably won’t know it exists anyway, and it certainly won’t be on you automatic reorder. And once you go to “same as last time,” you won’t even look at the screen for “pop ups” or “also boughts” anymore. Let’s face it, convenience will put you in a rut!
Consumer brand builders will be seriously challenged to get you to try their new products going forward. Certain smaller products will be mailed as “free trials.” Others will pay a premium for the stores to include them in your regular deliveries. But impulse buying pretty much requires a physical bricks-and-mortar store. In fact, part of the fun of shopping in a retail store is/was discovery.
One of the advantages that retail stores will have over bigger, centrally warehoused retailers is that their physical locations are more localized, making deliveries shorter and potentially faster and more efficient. We suspect that they will become more like neighborhood warehouses than social attractions.
Buckle up folks, it’s a whole new world. Let’s try to keep variety and brands that offer new and improved products alive. Let’s notice what we lose when we say, “Same as last time!”