For those of us who have been thinking about e commerce and the reasons for people not taking to it in large numbers for decades, the COVID-19 related lockdowns gave much to reflect on. Below is an excerpt from something I wrote in the first weeks of the Sri Lankan lockdown in the Daily FT and also in Sinhala.
E commerce vendors in Sri Lanka were having a hard time making sales. And these were companies that were dealing with items that do not go bad. The demand that spiked in the past weeks was mostly for goods such as dairy, fruit and vegetables that require care in storage and transportation. Obviously, any system that is designed for a low level of use will experience difficulties when there is a sudden spike in demand. And with perishables for which the greatest demand arose, the systems had to be developed from scratch.
Some supermarkets which had not made any arrangements for e commerce announced telephone numbers to receive orders which were flooded with calls. Lacking the software and agents needed to handle multiple simultaneous calls, those numbers generated frustration instead of orders. Others had low-volume Internet-based platforms which also crashed because of high volumes of orders. Both did not have the requisite backends set up. The success of e commerce giants such as Amazon and Alibaba rests also entirely on standardized packaging, computerized (and robotic) retrieval, and the efficiency of their warehouses and logistics.
Simplifying order taking by use of standard bundles or forms is one way that retailers can manage demand in the short term. If they have the prior orders of customers in loyalty databases, it may also be possible to simplify order taking and alleviate the frustration of potential customers.
The far end of e commerce
Given the difficulties many potential users have had in understanding the difficulties of scaling up the customer facing side of e commerce it should come as no surprise that there is even greater ignorance about the far end of the supply chains. For a chicken to be delivered to a customer by a retailer an enormously complex set of transactions over a period of months is required. If any parts of the supply chain break, the repercussions will work their way through the chain and impact the customer immediately or in a few weeks or months.
I was observing the level of unhappiness and even anger that was being displayed on the various Facebook groups and on Twitter. My above comments posited lack of knowledge as the possible cause. The article in OneZero suggests that expectations have played a bigger role. I should have caught this, because the changes in citizen expectations caused by the mobile operators in developing countries played a significant role in our thinking when we studied service delivery in Bangladesh, India and Sri Lanka, a few years back.
According to Devon Powers, an associate professor of advertising at Temple University whose research focuses on consumer culture, a major issue is that people expect Amazon-speed fulfillment from smaller retailers, which are working with already limited resources in the middle of a pandemic.
“Consumers are understandably really frustrated because we’ve seen all of these hiccups in the supply chain,” Powers says, and no store can match Amazon. “Part of what they’re frustrated at is they’re starting to see how retail actually works.”