As different countries across Europe have started reopening their borders, there is the need to adopt to new norms in order for business to continue. In this edition of Thought Leadership Thursday, we sit down with Giorgio Vitale, Head of Business Development EMEA, to discuss what trends were seen during the pandemic, what we can expect to see, and how retailers and brands can adapt and bounce back.
Q: How have the COVID-19 border closures affected businesses in Europe and its logistics/supply chain?
If you think about our initial webinar, we spoke about border closures specifically, and what we have seen more recently is borders opening back up. Looking back at March, because of the backlog, borders were experiencing long queues from Germany and Poland. Today we’re seeing that Austria, Hungary, Lithuania, and Poland are pretty much back to normal. The government restrictions that were in place were mainly on public gatherings, so the movement of groups in cargo have been indirectly impacted, but even those disruptions and delays have not been registered as was expected, which is a good thing.
Q: How do you think customer demands shifted the products that were moved?
On our end we saw a drop in demand for nonessential items like apparel and footwear and accessories. What was interesting was there was a demand for consumer electronics, which, across B-Stock’s marketplaces, were achieving higher pricing than typical. What we also saw was an increase in demand for grocery and cleaning products. There was also an increase to Christmas-like levels on some of our marketplaces such as MyToys, which sells children’s products. While non-essential goods were impacted initially, we’ve still seen high pricing and demand across our marketplaces, which speaks to the strength our business buyer cohort has maintained during this time.
Q: As Europe prepares to reopen its borders, what do you see happening in commerce?
I imagine commerce will start to increase in those areas that opened their borders—as people start to buy more seasonal types of inventory. We’re approaching the summer, so demand will definitely increase for spring and summer items and apparel. When you think of the global macro level for Europe, we’re going to have multiple sellers with excess inventories due to the COVID period where their sales have experienced a significant negative drop. So, I think commerce will increase and I think there will be significant supply in that space which we’re already seeing across our European marketplaces.
Q: What is one thing retailers and brands can do as they adopt a new normal, to recover from the pandemic?
I think one of the things we’ll notice more and hasn’t been really discussed in great length at the moment is the impact on the demographic of the buyer—I think younger buyers will embrace shopping again far quicker, whereas shoppers over the age of 50 or 60 have experienced a bigger impact—as a result of COVID—to the way they used to shop. They’re experiencing more anxiety, so it may take a lot longer for more elderly buyers to go back to shopping again, and I think some may never go back to it as well. As a potential, there are consumers who have made a full transition to online shopping. There’s a recent report from channeladvisor which lists the five trends they’re seeing based on consumer behavior, and there are things that will never go back to the way they were pre COVID.
So, I think retailers will adapt their strategies based more on trying to get confidence back to consumers. This could involve things like limiting the number of shoppers in the store at a given time, or designating specific hours for different segments of customers, perhaps adjusting workflows. At the supply chain level, I imagine they would adopt more optimal ways to work. We’ve seen proficiency levels drop significantly as a result of COVID, and it’s unclear whether or not those proficiency levels will ever be reached again—but adaptation and change will be key.
Q: How do you think this will shape different businesses in the immediate future?
I think the way businesses procure and forecast is going to change forever. Are they going to have to be far more closely aligned to consumer behavior using a new set of forecasting measures? I see the physical structure of stores definitely changing as well. In speaking to current clients, they’ve shared that they’re having to reshape their retail strategy and create better online dynamics to meet consumer demand. We’re in the fourth industrial revolution, and this pandemic has likely fast-forwarded the adoption of e-commerce and online trading by five to 10 years, but there will definitely be a proportion of people that can’t make that transition, so how are they serviced? Could we see retailers going more direct to consumers via channels such as pop-up stores where retailers bring inventory to regions where they wouldn’t normally operate in? How are they going to change their offerings to meet consumer demand, not just in product categories but in customer categories in terms of things like age demo?
Q: What are some key learnings for retailers? Ex: run leaner, have a scalable disposition strategy in place
I think this pandemic has made retailers and manufacturers firstly review how agile their company structures are, and secondly, they’ll review and amend both their business continuity strategies and how they maintain liquidity within the business. Having a secondary market disposition channel and transitioning to a private online marketplace from a legacy solution will become more acceptable in cohorts, based on the companies that have already been doing this. Those who have been resistant to the change before now have to make the transition. So, I believe the secondary market disposition channels will increase tenfold—and that rate of adoption, which may have been slow before, will only increase due to this pandemic.
Q: We’ve launched a historical number of marketplaces in Europe over the past couple months. Why do you think there has been a surge in interest in B-Stock’s solution?
We launched three new private B2B marketplaces during the pandemic, and we anticipate another three or four as we come out of the pandemic. Beyond that, because of that trend and the new adoption of B-Stock Solutions services into those spaces, we anticipate demand will be high from new sellers requiring our services. Why do I think there’s been a surge in interest? Because those legacy ways of working and the reliance on a small pool of buyers—which now have been crippled by COVID-19—are not enough. Those with a blend of physical stores and e-commerce only have so much buying power, so it’s necessary for them to plug into the network—which is the B-Stock sourcing network—to access a diverse mix of buyers that have specific buying strengths in key retail categories. By doing so, we can continue to provide the financial liquidity that the sellers are after. We can provide solutions which will make companies far more agile and ensure they’re not sitting on excess inventories that create a significant financial impact.
So, I believe companies are watching what their competitors are doing, and as those competitors transition to B-Stock, more of them will join our network. And if you think outside of retail, of the impact on a global scale in the economy, with companies laying off people, that will trigger a wave of new resellers. Those resellers entering the market will result in greater velocity, and greater recovery for those retailers. So, we see that there will be a wave, and B-Stock will be at the forefront of it due to our expertise in this space.
Please feel free to email us if you’d like to learn more, and check out our webinar series on the impacts of COVID-19 and recovery strategies.Email Us