On average, it takes more than 2 months before a new behaviour becomes automatic — 66 days to be exact i. So one month into the strict Covid-19 lockdown measures, is a timely moment to revisit this work from 12 months ago, and see how the forced Covid-19 Lockdown restrictions are likely to shape the Irish retail landscape going forward. By understanding how retail is likely to evolve, we can provide a useful framework for developing commercial marketing plans and activations going forward, for both brand owners and retailers alike.
One of the lasting retail legacies of the Covid-19 crisis will be the expansion of eCommerce channel, including online grocery, which has lagged behind for so long. The question is, how is this likely to shape up?
COVID-19 IS A TIPPING POINT FOR ONLINE FOOD AND BEVERAGE CATEGORIES.
Despite these challenges, grocery sales via online have spiked significantly. Kantar Irelandii reported that Household penetration for online groceries has grown by 3% points to 9.5% in April 2020, compared to pre-Covid-19. This rise in penetration was the key driver in online sales growth of +€6m (+26.6%). Tesco Ireland reported that Tesco.ie accounted for 15% of total Irish grocery checkouts in week commencing 30th March 2020. According to Nielsen – 22% of people will shop packaged food online after the Covid-19 crisis versus 16% before the crisis iii. The Empathy Researchiv Covid-19 Tracking Research reports that one-in-three of all online grocery shoppers, since Covid-19 lockdown restrictions were introduced, are new to online grocery. And while a significant cohort (3 out of 10) of all online grocery shoppers claim to have a had a positive experience, almost half (45%) say that they will shop in-store for their next main grocery shop. Reasons given include a desire to get out of the house, lack of delivery slots, the time spent queuing online and receiving items that they did not choose.

Existing online grocery operators adapting to shopper surge.
IRISH GROCERY ECOMMERCE RESPONSE TO COVID-19 DRIVEN DEMAND.
Tesco is expanding its ‘Click & Collect’ services to multiple additional locations, thereby increasing the number of slots available for shoppers. It is also prioritising online orders for those aged 65 or more.
Musgrave is also expanding ‘Click and Collect’ to 80 SuperValu and Centra stores that are now offering a new home delivery service to help distribute essential groceries to shoppers. Some Supervalu stores are taking orders for elderly or vulnerable shoppers over the phone for them.
In response to the overwhelming demand for grocery online shopping delivery services, Tesco.ie are asking people who can visit their stores to not use online services, leaving them free for vulnerable cohorts such as the elderly. The superb Club Together initiative between the GAA and Super Valu / Centra is providing a much needed lifeline for this cohort, a low tech workaround for online shopping.
OVERWHELMED GROCERY ECOMMERCE FAILS TO DELIVER ON SHOPPERS’ EXPECTATIONS.
Historically grocery online shopping in Ireland has lagged behind other categories, hampered by the infrastructure limitations and the fundamental fact that online grocery adds cost and complexity to existing grocery logistics. Someone has to pick the products, pack them and deliver them. The digital interface is not intuitive and requires significant effort for shoppers to learn how to use it effectively. Search in particular is substandard compared to the benchmark of Google. Added to this limited delivery / collection options can cause friction rather than reward for many. (V360° Shopper Pulse – Irish Grocery eCommerce: Overlooked and Undercooked – November 2019).
PIVOTING TO DIGITAL COMMERCE TO KEEP THE LIGHTS ON.

Restaurants are now turning into take-aways, such as Michelin restaurant Liath in Blackrock, Co Dublin. Others are providing the ingredients and recipes for customers, such as Box Burger in Wicklow. This trend has proven popular as it gives customers the chance to make their own creations at home while keeping the restaurant top-of-mind. Not to be left out, breweries both big and small are also offering home deliveries such as Sullivan’s Brewing Company. Meanwhile My Milkman continues to reliably deliver milk to the highways and byways of Ireland.

Deliveroo has also partnered with M&S in the UK to deliver essential groceries such as bread, pasta, and tinned goods to consumers. This M&S-Deliveroo service has no additional charge and aims to drop orders to shoppers’ locations in less than 30 minutes.
INVESTING AHEAD IN GROCERY ECOMMERCE.
To grow, grocery eCommerce needs to fill the leaky bucket and focus on retaining as many of the new customers that have engaged with online shopping for the first time, while continuing to recruit new shoppers to the channel. Ireland does not yet have a specialist online grocery operation on the scale of Ocado. Margins in such delivery activities have been tight, profits scarce. Now every retailer and retail partner is frantically trying to increase their capacity in response to the Covid-19 emergency. In the short term it will be impossible to do so as fast as consumers want and need at a frightening time. Looking internationally, particularly to the UK and beyond provides some food for thought on how eCommerce could evolve.

Carrefour Italia launched a new service called Gli Essenziali, which offers free delivery on pre-packaged boxes that contain essential food and non-food products. The service aims to be delivered in four working days in most Italian regions. The retailer has pledged to donate €1 from each kit sold to the Italian civil defence. Gli Essenziali pre-packaged kits are priced vary from €59 to €79 and look to supply enough food for two to four people. The boxes available vary to suit a variety of shopper demands.
Morrisons has launched a dedicated telesales shopping service offering next day delivery on essential items for the “vulnerable and elderly”. Customers can now order from a list of 47 essential items over the phone and pay for goods with their credit card when their order is deliveredix.
Waitrose ‘Rapid’ service which enables customers to order up to 25 grocery items for delivery within two hours and helps ensure the elderly and vulnerable have access to essentials during the pandemic. It will “more than treble” the number of available delivery slots from today. xi
Tesco UK claims that it has become the first UK retailer to fulfil one million online grocery orders in a week. “Capacity continues to increase and in the coming weeks will reach 1.2 million weekly slots – double the number of slots at the start of the Covid-19 crisis,” the company announced. Online shopping in the UK accounted for only a small share of the grocery market until Covid-19 hit the UK but now Mintel forecasters believe the sector will grow by 33 per cent in 2020 alone to reach an estimated value of £16.8bn, up from £12.7bn last year. xii
Amazon is poised to launch a new “Ultra-Fast Fresh” delivery service to bring rapid grocery delivery to 40 per cent of UK households by 2021xiii. The online giant is aiming to merge its Amazon Fresh grocery delivery service with its super-fast delivery arm Prime Now in the UK, retrofitting nine of its warehouses to handle, fulfil and deliver fresh produce in a matter of hours, according to The Grocer.
Robots Delivery by Starship Technologies who recently expanded their robot food delivery service in Tempe, Arizona as part of the autonomous delivery start-ups expansion plans following a $40 million funding round announced last August. Starship added a grocery delivery service in Washington, D.C in late March and expanded to Irvine, Calif. It also expanded its service area in Milton Keynes, U.K., where it has been operating since 2018. The company said it plans to add more cities in the coming weeks xiv.

IMPLICATIONS FOR RETAIL LANDSCAPE POST COVID-19 – ACCELERATING GROCERY ECOMMERCE.
In the absence of an online grocery operation on the scale of Ocado (Buymie not at that scale yet) is a real barrier, not helped by the tight margins in such delivery services. Nonetheless there is a remarkable expansion of innovative home delivery services and DTC offerings springing up throughout the country. Recent developments by Amazon, purchasing land that could facilitate a distribution centre at Baldonnell in County Dublin point towards one opportunity for Irish suppliers.
RECOVERING POST-COVID-19.
eCommerce players are taking an opportunity to integrate operations with the brick-and-mortar world – particularly in fresh foods, the last stronghold of physical stores. Alibaba plans to double its Hema offline supermarket network and open 200 stores this year. Food delivery giant Meituan Dianping decided last month to invest in a fresh-food wholesaler.xvi
Some interesting and relevant retail innovations in contactless payment and staff/customer interactionxvii point towards opportunities in the medium to long term for the Irish Retail landscape.
Remote Drop Off: customers of all major retailers, including Walmart, Carrefour, Alibaba and JD.com, can have their orders delivered touch-free by specifying where to drop the goods when they place orders using the App.
Smart lockers: Shixing Fresh has set up smart lockers for fresh food delivery in selected residential areas. Each locker is a refrigerator that has different temperature settings to keep food fresh. Customers will be notified via SMS when goods are ready for collection.
Drive-thru for groceries: Sinopec started selling fresh vegetables at its petrol stations through its Easy Joy banner. There is no need for the customer to get out of the car or roll down the window. Staff put fresh vegetables and meat directly into the customer’s car boot.
Smart vending machines: JD.com set up five smart vending machines. To make a purchase, customers need to scan the QR code on the cabinet door. The door will be opened for customers to take out the product. Payment will be made automatically once the door is closed.
Improving online efficiency in Singaporexviii, Lazada, is one of Southeast Asia’s biggest eCommerce platforms, temporarily closed its online store to implement key changes: Reducing assortment: prioritise daily essentials such as rice, flour and eggs; Delivery slots assigned according to location: there will be specific days and time slots available for each address; Simplifying and reducing orders: orders are limited to 35 items and less than 100kg. Items cannot be added to order once placed; Contactless delivery: deliveries will be left at doorstep to minimise contact.
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ii Kantar Covid-19 Webinar – April 2020.
iii Impact of Covid-19 On Consumer Behaviour- Ireland Country Report – April 2020.
iv Empathy – A third of Covid-19 Online Grocery Shoppers are First-Timers – 24 April 2020.
v Coronavirus: Grocery delivery firm pitches help to Government. The Irish Times. 16 March 2020.
vi Empathy – A third of Covid-19 Online Grocery Shoppers are First-Timers – 24 April 2020.
vii Belfast-bar-launches-fresh-guinness-to-your-door-delivery-service The Irish News – 9 April 2020.
viii Dublin pub’s dial-a-pint service ‘hounded with orders’- Irish Independent – 25 April 2020.
ix Walmart Canada plans to triple ecommerce capacity. IGD RetailAnalysis. 8 April 2020.
x Charged Retail Tech News: Morrisons customers can now order by phone for next-day delivery 22 April 2020.
xi Charged Retail Tech News: Waitrose adding 5000 Rapid delivery slots a week offering same-day delivery 17th April, 2020.
xii Mintel – Coronavirus shopping trends: The weekly ‘big shop’ and a proper breakfast are making a comeback in lockdown – 29th April 2020.
xiii The Grocer: Amazon poised to launch “Ultra-Fast Fresh” grocery delivery in the UK – 17th April 2020.
xiv Techcrunch – Starship Technologies is sending its autonomous robots to more cities as demand for contactless delivery rises – 9 April 2020.
xv Online grocery market expansion likely to be lasting legacy of crisis The Irish Times. 19th March 2020.
xvi China’s retailers face hard truth: If you reopen, they won’t come Nikkei Asian Review 3 April, 2020.
xvii Coronavirus (COVID-19): latest updates from China– IGD Retail Analysis. 12 April 2020.
xviii Coronavirus (COVID-19): latest updates from Singapore – IGD Retail Analysis – 27 April 2020.