Now that it seems we are leaving this crisis back, and we are moving to this so-called “new normal”, I would like to look back and recap what we did the last two months. Before starting let’s clarify first that the company I work for is a well known electronic consumer retailer that has some brick&mortar stores and an online store.
It turned out that the Spanish government decided to apply a state of emergency, so we had to stay at home and work from there. It was announced on Friday 13th March and it was official on Saturday.
For brick&mortar, as many other businesses, this decision supposed closing business, temporary or in lots of cases definitively. In our particular case, we had to close or physical stores, and remain open only with the e-commerce. We became a pure player overnight.
This may sound ok. You may think that other businesses didn’t have e-commerce, so they ran out of business. But it wasn’t that easy, just think about it, we now were an online store with a huge over-dimensioned structure to support almost 90 stores (including the Online store). So there were huge costs for online commerce, which only probably reached 10% of the total turnover.
The next step, as you may know, or imagine, was the “temporary layoffs” (here called Expediente de Regulación Temporal de Empleo, or ERTE). It was impossible to keep all the good people working, so there was a big amount of colleagues that were forced to disconnect from home.
So, beginning April, only a percentage of the people remained working, from the HQ and stores. And e-Commerce was the only sales channel.
E-Commerce sales boosting and logistic bottleneck
E-commerce sales increased quickly. Following what the media said, at the beginning of April, we were doubling the amount of sales, and for the end of the same month, we were reaching 500% versus the same month last year.
It is said that those 6 weeks e-commerce improved in a way it didn’t for the last 6 years. Truth to be told, we were running a free shipping promotion as our competitors did. In our case, and said in a very roughly way, we were on a permanent Black Friday.
Lots of stock remained in the store warehouses while the online business was increasing. Its stock aging was increasing, and our replenishment would be affected. So it was decided to transfer goods from the store to the online central warehouse, to let it be sold by e-commerce.
This decision was somehow necessary but raised many issues. Online goods entry became a bottleneck. Goods didn’t arrive always in the best way to be accounted for quickly, so lots of manual effort was needed.
Our online central warehouse was suffering, but carriers also. Transportation suffered a delay for mostly all stores. It is said that for the first time, Amazon was unable to send you the goods you needed, in the time you wanted. Sadly, our delivery promise had to be increased.
Shipping from the stores
From our HQ in Germany, a new project was starting. It was named Ship From Store Stock. The idea was simple, as the name suggests was to sell the store goods and send them to the customer’s home from the store location.
We are currently running a centralization project in order to leverage the number of different applications that we are using in the countries. In the case of the online business, not all countries use the same e-commerce solutions.
So we analyzed our possibilities and decided to modify one of our current shipping options, our wish date delivery solution, with this purpose. It wasn’t a very robust solution but analyzing the options and its tradeoffs, considered that it was the best available.
Selling Stores stock was important because of the stock aging, but also because of the online warehouse bottleneck. Sales from store increased up to 30% of the whole online channel sales, helping to decrease the bottleneck of online shippings, adding stock to the e-commerce that wasn’t available at the online central warehouse. And it also helped stores to keep people working, which in the current situation was very important.
What can we say about the future? It is certainly unclear right now. We opened stores this week, only for first need sales, but the amount of people that reach the store is very low. E-commerce sales weren’t affected at all.
Are we going to return to the situation that we had two months ago? New online customers are going to stay? Who knows, but we all agree that for new customers, the experience wasn’t the best possible and they did it because there wasn’t any other option possible. At least, they bite the forbidden apple.
Time will say, but we have to be prepared. Maybe e-commerce will strengthen from this experience, and then we should assimilate the learnings quickly, because many points need to be improved in order to provide our customers with the best experience possible.
Some thoughts to finish
I currently have a management position, but these days I helped as another team member, mostly supporting this new initiative for store selling. In the end, it wasn’t easy, it wasn’t free of issues, far away from perfection, it was stressful, and we had to dedicate initially a lot of time. But I think it was necessary, because the situation required this extra push.
I can agree that when there’s too much work to do, there’s probably a bad decision regarding the amount of people who should have remained. Or maybe not about the amount, but the kind of people. Sometimes you need more working bees than queens.
Another improvement is communication, it is not our best skill. But in this particular case, the purpose was easy to understand. And when you know and understand the “why”, it is easier to join the team, to be motivated, and to push all-together as one (or close to this idea).
There are projects that are more attractive, more interesting, better than others. Knowing the inside, this one wasn’t very sexy, but I liked the outcome. When you feel that your effort is helping the company, helping the stores, and in the end helping the people, it is when you feel that what you do worth it.
All those opinions are my own, and from an IT perspective. Probably other colleagues could have added more accurate information from their point of view.
If you have any thoughts, experiences, or want to share anything, please, do not hesitate to include a comment.
I hope you liked it. If so, please share it! And, if you want to stay up to date, don’t miss my free newsletter.
As always, thanks for reading.