4/21/2020
  • Work
  • Pirjo Aalto

The coronavirus takes, it gives and it changes business operations

The ongoing pandemic is changing the structure of retail trade for good. In Finland, we have long been pondering how the relationship between e-commerce and brick-and-mortar shops will change in the future. Right now, it seems like e-commerce is taking over, but in a new way.

Scenarios and prognoses over the relationship of e-commerce and physical shops seem to be taking a huge leap forward and coming true even earlier than expected. However, is the change in business models actually a surprise? The development of business models has been extreme. Unfortunately, we have also seen how many entrepreneurs have crumbled under the pressure to change. As consumers spend most of their time at home, they find online shops that utilise the new business models quickly.

Trends have always influenced consumers and, in my opinion, this will always be true. Our prognoses from a couple of months ago, when we predicted which trends would impact consumer behaviour, are no longer relevant. Even though it has been obvious that evolving consumer behaviour is changing retail and restaurant business models, we have all been surprised by how fast the change has occurred during the current crisis.

Trust and safety as trends have defended brick-and-mortar shops when Finnish consumers select where they shop. However, during this crisis, online shops have been the ones to create safety. In January, consumers felt safe if they knew that a product matches its description (they could touch and look at it in the shop and ask the salesperson questions) and the product came home as fresh as they saw it (tomatoes and meats they selected themselves). In March, safety became about shopping without encountering another person at all.

According to research, Finland has been the biggest user of pick-up parcel lockers. The placement of lockers in shops and shopping centres could be described as a race of lockers. A while ago, I thought the number of lockers from various operators was exaggerated: Posti, DHL, PostNord, Matkahuolto and others set up their own or shared versions. However, the lockers are now jam-packed! Posti has already announced that it cannot always deliver the ordered products to the customer’s preferred parcel locker because there is not enough capacity. I heard that even Posti’s lockers at Tripla are currently full. 

To me, it seems that the online restaurant business has developed the most. Traditionally, selling take-away food has been about pizza and lunch. Now, Finns can select their meals from a wide variety of restaurants. Providers of high-quality food have been innovative in bringing their menus online either as ready-made meals or raw materials with recipes. Anyone can become a master chef at home!

Traditional food delivery companies have also entered the market as deliverers of consumer goods. Even entrepreneurs themselves are taking care of home deliveries with their cars. In shopping centres, entrepreneurs are creating cooperation models so that they can get closer to the consumer in a situation where the physical distance must be at least one metre and gathering in shops is questionable. For example, experience operators are developing their business models, and you can now even take a virtual museum tour. One of the most memorable business development models is an upcoming drive-in restaurant for boats in Naantali.

I can only admire entrepreneurs’ innovativeness in the middle of this stagnation when many are battling for continued income, feeling down and anxious.

Of course, all entrepreneurs are facing a new and extreme situation. You have to wait for individual customers to pop into your shop, and you cannot even decide whether to keep your shop open or not as business operations are governed by decrees and bans from the public administration. However, all new and innovative solutions are forming the future of retail.

It remains to be seen how much the crisis elevates the role of e-commerce in relation to the entire retail trade and service sector. However, I believe that the need for physical encounters will not disappear, even though many people will continue to remain cautious. 

Pirjo Aalto

See the video: Pirjo Aalto tells about changing online shopping

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Pirjo Aalto
Development Director, Commercial
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