The COVID-19 pandemic has resulted in immense suffering and loss for families around the world. All this darkness though, perhaps unexpectedly, has also served as a catalyst to bring people and the organizations they run closer together to weather the storm.
We are seeing communities rallying around elderly neighbors and frontline workers. We are also seeing companies across different sectors coming together — forming partnerships faster and more willingly than ever before — to help themselves and their employees and to become stronger together.
Nowhere is this more evident than in retail, one of the worst-affected industries, contending with the temporary closures of physical stores and the unprecedented shifts in consumer preferences that the necessary social distancing measures have brought. The stark reality was recently underscored when Primark, an Irish fast fashion retailer without an e-Commerce presence, reported its sales dropped to zero from £650M as a result of lockdown measures.
The businesses that can provide the best product range and the most convenient remote shopping experience to their customers are the ones that will be able to thrive in the current environment.
A recent PYMNTS survey of more than 12,000 Americans revealed that since the shutdown began, 42% of consumers started using digital channels more often than they did before the pandemic broke out. Perhaps more surprisingly, roughly 75% of consumers will stick with their newly acquired online habits, including when it comes to shopping.
Similar trends are playing out all around the world, and as a result, brick-and-mortar brands across the retail landscape are forging partnerships with e-Commerce players. In the UK, dozens of clothing brands that have focused on in-store sales before the COVID crisis have partnered with ASOS to begin selling via its online marketplace. In Russia, we see food, electronics, cosmetics, and sporting goods retailers also rushing to do the same.
Russia’s largest seller of household appliances and consumer electronics, M.Video Eldorado Group, has recently began selling some 80% of its product range, including smartphones, laptops, gaming devices, refrigerators, washing machines and the like via the marketplace at Ozon, one of Russia’s leading multicategory e-Commerce platform.
This unusual move for a consumer electronics giant operating more than 1,000 stores as well as its own online channels will give M.Video Eldorado Group the opportunity to tap into new regions and attract new buyers. For Ozon, this means that our customers will be able to access an even wider selection of products from the confines of their homes.
Russian sporting goods retailer Sportmaster also has partnered with Ozon as sales of fitness equipment for home use and sportswear are surging. And Otto Group, one of the world’s largest retail players, has done the same to tap into an even wider audience of online shoppers via Ozon.
The large retail chains are joining Ozon’s marketplace alongside smaller sellers, thousands of which are already using the platform. In one week alone (from March 23-30), we have doubled the number of new companies selling on Ozon.
The partnerships, however, don’t just stop there.
Ozon and other e-Commerce players, as well as grocery stores, have been grappling with a sudden spike in demand as non-essential retailers temporarily closed to fight the spread of the virus. When lockdown began in Russia, we saw the number of new customers more than double in March (+101% in March 2020 compared with the same period last year).
In addition to greater demand for essentials such as diapers and antibacterial cleaning products, we’ve seen a jump in sales of board games, fitness accessories and even swimming wear (perhaps customers are dreaming of holidays at sea). Even for our robust logistics network, this unprecedented spike in new orders meant that we had to employ more people to scale up our capacity quickly.
Coming together with companies in sectors facing excess staffing provided the way forward. We forged staffing partnerships, such as with Sheremetyevo (Russia’s largest airport), Rosinter (an operator of restaurant and fast-food chains including McDonald’s) and Sportmaster to help locate people looking for jobs. In turn, our partners found a way to provide new opportunities to staff they unexpectedly no longer needed because of the lockdown.
Ozon has recently created at least 500 new jobs at our delivery service, logistics and fulfilment facilities, and we aim to create over 1,500 additional positions before the end of this year.
In addition to creating new jobs, we partnered with on-demand ride hailing company Yandex.Taxi to use their idle drivers as last mile home delivery couriers. This partnership helped us alleviate some pressure on our logistics network while allowing drivers to earn additional income.
Some of these alliances may have been spurred by necessity, but they are sure to create lasting bonds. We are witnessing what Sova Capital has called the birth of hybrid retail, where the lines between food and non-food, online and offline shopping are being blurred.
Cooperation across industry lines and involving different retail formats will undoubtedly create a better, richer shopping experience for consumers and strengthen the e-Commerce sector going forward.
Daniil Fedorov is the CFO of Ozon Group, a leading Russian multi-category e-Commerce platform established in 1998.