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Making Sense of Change: Responding to new e-commerce demands

With the Covid-19 pandemic pushing the country into lockdown, there has been a surge in online shopping with many of us turning to the internet for supplies. Online sales have risen to account for 22% of all retail in March, up 12.5% on the previous year according to the ONS, as we replace our supermarket shops with deliveries, and look to online retailers to equip us with laptops to work from home, or health and beauty products to keep us fit and feeling our best.

For e-commerce companies such as Buy It Direct, Musclefood and CurrentBody, it’s taken proactive and rapid adjustment to not only keep operations up and running, but to cope with the sharp rise in demand.

“I’d like to think that we’ve been playing our part in feeding the nation with our produce and helping to limit trips to the shops,” says Nick Preston, CEO of Musclefood.

“With salons, clinics and spas all closed for the foreseeable future, we are now seeing a rise in people doing treatments at home,” says Laurence Newman, CEO of CurrentBody. “Our home-use health and beauty products are here to help people to look and feel better, to help with anxiety and with beauty at home.”

“These are not superficial things,” says Nick Glynne, CEO of Buy It Direct Group. “A laptop is essential to someone working from home. Replacing a broken washing machine is essential to keep us in clean clothes. A dishwasher keeps relationships together!”

Supplying the demand

“To begin with, we saw a huge demand for freezers as people were stockpiling food, and for IT equipment with more of us working from home. Then there was a demand for domestic appliances that were breaking because of the extra use, such as washing machines and dishwashers,” says Glynne.

Offering support to frontline workers has been important, says Preston. “We moved quickly to set up a dedicated email address for key workers and frontline staff so we could fast-track their order.”

To keep the businesses running, all three CEOs agree that preparation and early recognition of the seriousness of the situation was vital.

“We started looking at Covid-19 as it was playing out in China and we put together our own internal Covid-team in February,” explains Preston. “Their challenge was to get us in the best position possible should things escalate, so we were agile and able to react to the situation.”

“Once the virus started breaking out in Italy, we started to preserve cash,” says Glynne. “We went into this crisis with a really strong balance sheet without alienating our suppliers. Then we moved our 380 office staff to work remotely, sorting secure access, telephone use for our call centre, screens and laptops.”

“A week before the government put the lockdown in place, we decided to move everybody to home working,” says Newman. “That put us ahead of the curve to get people used to a new environment and settled by the time things really started to kick in.”

The next challenge was keeping the operational side of the business up and running, while keeping staff protected and adhering to social distancing.

“The priority was the safety of our team,” says Glynne. “Each of our three operational areas – warehousing; reverse logistics and repairs and technical services; and transport and delivery – needed support. We sourced PPE [personal protective equipment], hand gel, face masks, goggles and thermometers, and implemented social distancing.”

“We changed shift patterns at our main distribution centre, enabling us to handle more volume,” says Preston. “While our tech team did the necessary work because, as an online business, we wanted to ensure the website could handle a surge in traffic.”

Similarly, Newman explains that social distancing is the key to keeping a warehouse going safely. “We cut down the number of staff at any one time, moving teams onto two different shifts, and made sure everybody had the right equipment. We’ve turned the rest of the office we have into warehousing space so they have even more room.”

The value of teamwork

Through all of this, the companies’ staff have led the way, acknowledges Newman. “We haven’t needed to furlough staff and we have actually grown. The staff have been amazing and we’re fortunate with our recent key senior appointments. They’ve built their teams and helped to really help drive the business, safely.”

“We’ve never worked better together as a team,” adds Glynne.

“All the staff are sending video messages down to the operations team: encouragement and appreciation, communicating and feeding back about what’s going on, thinking about what’s needed.”

“We made it really clear is that we are not going to make any redundancies during this period. And that reassurance that jobs are protected was important – particularly because if someone was ill, they shouldn’t come to work. If someone needed to self-isolate, they could.”

“We call it the Musclefood family,” says Preston. “Families stick together when there’s challenging times. I’m so incredibly proud of how people are adapting and stepping up. “t’s humbling to see the dedication of people just going about the job as normal, even in lockdown and trying to get out four times more orders than usual. I think Musclefood can make a difference, and we’ll come out of it stronger.”

This willingness to see the positive side to such challenging circumstances is echoed by Newman. “I’m a great believer in the fact that you find out about people when things are tough. We’ve had challenges in the past and we’ll have them in the future, so it’s good to know who can step up.”

In terms of what has helped them to pivot their business quickly, Glynne, Preston and Newman all point to different facets of their company.

“Culture is important,” answers Glynne. “We spent the last two years engaging heavily with staff. You don’t realise until things like this happen how important culture is.”

“Your business’s primary focus or primary goal should be to support your staff and support your customers. Good flows from that. Society benefits because you’ve got people employed and reaching their potential.”

“The strength of our partnerships has been crucial,” says Preston. “I don’t think anybody could have foreseen this surge in demand, and there’s so many people who are contributing. We leveraged the strength of our group and also our sister company, DB Foods – working with them to secure stock early. It’s a sign of a strong company when you can call on people in times of need.”

For Newman, it is strategy that stands out, explaining: “We need to remain absolutely laser-focused on what we’re doing – on being the destination for home-use beauty devices. We’ve got a very strong backing, and with that comes a strategic plan. We’re focused on our goal. And to get there, we focus on the plans we have in place.”

While we have seen a recent and acute rise in demand, the question is whether the pandemic will change the e-commerce industry permanently. There are differing views on this, and on the extent of any change.

A new horizon?

Preston believes “People who previously have never shopped online will now do their shopping online. We’re acquiring so many new customers, many of whom may not have been aware of us before, they might have stumbled across us on Google. This is going to change people’s eating habits and we’ve got a lot of plans up our sleeve for the next few years.”

Meanwhile, Glynne believes that “Perhaps the lesson for us all is to be slightly less focused on growth and more focused on nurturing what’s there.

In contrast, Newman says “It’s only been six weeks and the world’s changing every single day. It’s a mistake to try and look past it. I’m not one to try and guess the future, although eventually I think we will find a way to get back to pretty close to where we were.”

Fast adaptation remains crucial for e-commerce companies, given the uncertain future ahead of us, but “how companies are pivoting their operations, finding new market opportunities while ensuring their staff are well protected, is really positive to see,” says Jane Vinson, Regional Portfolio Head at BGF.

“Decisive leadership and decision making early on has enabled businesses to get ahead of the situation and innovate to deal with the surge in demand.”

“We know each and every company in BGF’s portfolio is different and will be facing their own unique circumstances and challenges, and we will continue to work closely together, offering support and guidance as we enter a new business environment.”

The e-commerce industry has rapidly changed with the impact of Coronavirus, but as with any success in this challenging time, there is a bittersweet sentiment to be found.

“Would I swap what’s happening now to get back to business as normal and get everybody back in the office? Yes, of course I would,” says Preston.

“But we can only deal with the situations in front of us and I’m confident we will come out of this in a stronger position.”

Buy It Direct Group, Musclefood and CurrentBody are backed by BGF. Buy It Direct is headquartered in Huddersfield, Musclefood is headquartered in Nottingham. CurrentBody is headquartered in Manchester.

BGF Insights 05.26.2020

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