The view from customer 6023 in the virtual queue - the omni-channel supply chain buckles under the weight of Coronavirus

Profile picture for user slauchlan By Stuart Lauchlan March 17, 2020
Summary:
The predicted pressures on the omni-channel retail supply chain accelerated faster than might have been predicted. What happens next?

Empty shelves
(Madness in action )

Earlier this month we suggested that an inevitable consequence of the Coronavirus crisis would be that omni-channel retailers, particularly grocery firms, would find themselves put to the test as never before, both offline and online: 

Ensuring that the supply chain is in good health is critical. That’s a mantra that omni-channel retail champions like Target have been preaching for years. It’s one that’s going to be put to the test as the Coronavirus crisis continues to spike - and there will undoubtedly be those retailers that are found to be wanting. 

Flash forward to this past weekend and that’s a scenario that's come to pass very quickly as mass panic buying has stripped in-store shelves of basic necessities, while online grocery firms have seen their websites and apps buckle under the strain of increased demand. 

As of today, in the UK it’s basically impossible to get an online delivery slot from the main supermarket chains much before the end of the month - and that’s assuming you’re already a registered customer with the vendor. If you’re not, then the chances are you’re not going to be signing up any time soon. 

Take Ocado as a case in point - and given its status as the pre-eminent online groceries platform not only in the UK, but increasingly overseas, it’s a bellwether example of how the Coronavirus is taking its toll on ‘business as usual’. 

Over the weekend, first the desktop website fell over, sending would-be customers off to the mobile app, which then toppled under the weight of demand. Across the course of the past few days, the messages coming out of Ocado have evolved. Initially there was a note of black humor about the error message: 

Clean up on aisle five! It looks like the Ocado website is having a little bit of bother, but don't panic - we will have everything up and running again in no time. It's probably best to go back and try again or you can call the customer service team if you are still having problems.

As those problems continued, the firm took a customer service decision to focus on its existing client base: 

In this time of unusual demand, we have made the call to temporarily prioritise deliveries for you, our existing customers. This means, after today we will not be processing new customer bookings for the time being.  Naturally, we are very sorry to have to disappoint anyone that chooses Ocado, and we’re working hard to increase our delivery capacity.

Even if you were among those still able to use the site, getting onto the platform was a major task in itself. I had placed an order around 10 days ago and got the usual message the day before delivery to tell me that I could still edit the contents of the shipment up until the night before. 

Fat chance! Logging on, I was met with a “virtual queue” message that warned me that I would have to sit and wait my turn to be able to access my account information and that this wait would be “more than 15 minutes”. I don’t know what the actual wait time was as the connection dropped long before we got to 15 minutes. To be honest, by this time and having seen and heard of the chaos elsewhere among other suppliers, I was paranoid that making any changes at such a late stage might result in the entire order being lost or screwed up. 

Ocado screen
(Ocado )

'Knock and run away' delivery

The order arrived a couple of hours ago and was the first encounter with what can only be described as the new ‘knock and run away’ delivery policy. Actually it’s a highly sensible policy. Delivery drivers can only come as far as the doorstep and not, for example, into the house to leave your purchases in the kitchen. This applies to everyone, not just to those identifying as self-isolating. 

In addition, the drivers will no longer take back unwanted substitutions or plastic bags, the latter having previously been something that Ocado has been very big on pursuing in the interests of recycling. Driver schedules, I’m told, have also been adjusted to allow for time to clean the interior of the delivery vans in an ongoing basis during the day. 

On the plus side, I had feared that the order when it arrived would have a lot of substituted goods, something that social media users have been complaining about for the past few days. In fact, there was only one unavailable item - Honey Nut Cornflakes are the next big shortage, folks! - and the rest of the inventory was as I’d ordered. 

Whether that’s still the case when I next manage to get a delivery remains to be seen. As it is, online rationing has kicked in across multiple supermarket chains. ASDA and Tesco, for example, have both put restrictions in place on the number of  particular items that can be purchased online. That’s sensible and responsible policy in action. 

Also to be applauded is the ability for those who are self-isolating to flag this up to various delivery platforms. Sainsbury’s, for example, needs 24 hours notification, but will then fit in around delivery of goods to designated ‘safe’ spots. Tesco, ASDA and Waitrose have the same sort of policies in place now. 

The British Retail Consortium’s Chief Executive Helen Dickinson has emphasised that its members are working with the authorities to keep services running: 

Retailers are working incredibly hard to keep shops well stocked and deliveries running as smoothly as possible…We know that many of you are worried about the spread of coronavirus. We want to let you know that we are doing everything we can so that you and your families have the food and essentials you need.

We are working closely with the Government and our suppliers to keep food moving quickly through the system and making more deliveries to our stores to ensure our shelves are stocked. Those of us with online delivery and click-and-collect services are running them at full capacity to help you get the products you need when you need them.

Of course it’s also down to customers to do their best to keep the supply chain and fulfilment running. As ASDA said in a statement: 

We know some customers are opting to shop more online and have seen an increase in demand for home delivery. Our online business is growing and we do have capacity to take on more orders – however we would ask customers who can be flexible in their delivery slots to consider less popular delivery times.

US difference

One facet of all this that is interesting is that while for most technology adoption trends, the cliche is that the UK and Europe are several years behind the curve set by the US, that’s not the case when it comes to online grocery delivery where the UK in particular is a more mature market than in the US. That’s - ironically - perhaps left UK customers more vulnerable to any breakdown in the supply chain. 

In the US, click-and-collect in store and kerbside pick-up have greater traction, while home delivery is something that the likes of Walmart have only relatively recently begun to play up more, largely in the face of the oncoming storm of Amazon. Mind you, whether picking up groceries from a Walmart car park is a trend that survives the next few weeks is another matter…

It’s also worth noting that even the Great Satan of retail, Amazon, isn’t immune from fulfilment issues at present. In a blog post - regularly updated - the firm notes: 

We believe our role serving customers and the community during this time is a critical one, and we want to make sure people can get the items they need, when they need them. As COVID-19 has spread, we've recently seen an increase in people shopping online. In the short term, this is having an impact on how we serve our customers. In particular, you will notice that we are currently out of stock on some popular brands and items, especially in household staples categories. You will also notice that some of our delivery promises are longer than usual. 

We are working around the clock with our selling partners to ensure availability on all of our products, and bring on additional capacity to deliver all of your orders…Prime Now, Amazon Fresh, and Whole Foods Market delivery customers always have the option to select "unattended delivery" during checkout if they prefer not to come into contact with others. Orders not containing alcohol are eligible for unattended delivery, and will be left in a location specified by the customer.

My take

It’s a shame about Amazon not doing unattended delivery for alcohol - I think we could all do with a drink!

More seriously, this past few days has seen the omni-channel supply chain come under the kind of pressure I feared it would. The sheer idiocy of panic buyers in store has been unedifying to say the least - you’ve never seen anything as ferocious as a Yummy Mummy in Waitrose diving for the last packets of Quinoa!

As self-isolation becomes the norm, people are going to become even more dependent on online delivery. As of the time of writing, the Ocado virtual queue is 6024 would-be customers long. I’m number 6023 and would need to hang on for at least 2 hours before I can access my account. Even then, there aren’t any delivery slots in the short term anyway. Where this ends, I don’t know.  

ocado screnshot 2
(Ocado )