Falling coronavirus rates brings people back to stores

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People are back in stores after restrictions are relaxed. Source: Merilin Pärli/ERR

The turnover of the retail chains' e-commerce has matched the coronavirus waves - with declining COVID-19 rates, most people have gone back to actual stores instead of using e-shops.

The strongly expanded e-business of retail chains has not yet turned a profit, but the stores will continue to invest, as they forecast that e-business will continue to grow.

Last year, when the coronavirus wave prompted an emergency situation to be declared, retail chains were not ready for it, so that those customers who essentially flooded e-shops overnight virtually paralyzed the marginal e-business logistics. To manage the wait lines, retail chains quickly started investing to increase their service capacity, but there were still limits.

This spring, society has been more open and the shocks less than they were a year ago, but e-commerce still reached a new turnover peaks compared with last spring. March this year was the most successful month for e-stores.

"It must be said that almost 50 percent of stores had a larger volume," Coop Estonia's e-commerce manager Mait Mäesalu says by way of comparison this year with the previous March. "And this was more due to the fact that everything has developed over the years and we were just able to serve more customers. After March, there was a slight decline."

Kristi Lomp, board member at Selver supermarket chain, also says this spring has been very different for e-commerce from last spring.

"Nor has the situation changed much in terms of the number of customers, but restrictions definitely affect what is bought and how much is bought. When restrictions are relaxed, people usually go to the store more often, and buy less, and if restrictions are stricter, they go less frequently, but buy more," Lomp said.

The relaxing of restrictions has partly brought people back to regular stores, but retail chains do not consider the turnover decrease of e-shops to be very large.

"We see a 10-15 percent decrease compared to the peak period. But in some ways it was also predictable," Jarmo Mätnikov, the supply chain manager of Rimi's e-store, said.

"March was definitely the strongest month this year. After March, there was a slight decline, but at the moment, we can't see a large decline in e-store turnover," Mait Mäesalu said.

Kristi Lomp said with conviction: E-commerce has come to stay.

At the same time, retail chains acknowledge that e-commerce is running in waves, where both coronavirus restrictions and seasonality play a role - for example, in the summer people prefer to jump go to the store themselves.

Despite the fact that at the time of the restrictions, most people seemed to be buying milk and bread in the e-shop, the e-commerce turnover of retail chains is still marginal compared with regular trade.

"It will stay at 5-10 percent of the volume. But before the crisis, it was one or two percent," Mait Mäesalu said assessing the size of Coop's e-business.

"It depends on how strict the restrictions have been and how many people have been forced to stay at home, but the turnover of e-stores has never increased by more than ten percent," Lomp said.

At the same time, investments in e-commerce have been significant.

"The figures are still in the seven digits," Lomp admitted.

The stores admitted that due to the large investments, the e-business has not yet paid off, although this year's March already gave hope to reach zero in some places.

"Certainly, e-commerce today in its development phase cannot be said to be as effective as traditional commerce, but we are getting closer to this break-even point every month, and I believe that at some point we will also get where we can talk about a profitable business," Lomp said about e-Selver.

Stores will continue to invest in e-business. For example, Selver completely turned its logistics around a year ago. At that time, the company set up a special e-store warehouse behind its outlet in Järve, Tallinn, from where goods were distributed to homes across Estonia. However, this is done in 11 places all over Estonia, and from the middle of this week, deliveries will extend across Estonia, from Võru to the island of Vormsi.

Other stores say they are confident that e-business will continue to grow despite the crown and will make their investment plans accordingly.

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Editor: Roberta Vaino

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