E-commerce

“There will be severe delays”: Retailers face new challenges online

E-commerce has become a lifeline for countless retailers that have been forced to close their physical stores amidst falling foot traffic and growing concerns about staff safety during COVID-19.

But even as they pivot online, many businesses are now discovering new challenges in the fulfilment of those orders, as reductions in domestic air travel, border closures and social distancing requirements in warehouses blow out delivery windows.

“I would say shipping in general has had delays of around 20 per cent due to a combination of factors,” Shane Lenton, CIO of Cue Clothing, told Inside Retail.

The company, which owns Cue and Veronika Maine, typically fulfils around 57 per cent of its online orders from store inventory, with the remaining 43 per cent sent from its distribution centre.

But since closing all physical stores and standing down most of its staff at the end of last month, it has needed to quickly change its fulfilment process.

Before closing stores, Cue consolidated much of its store inventory in local hubs in each state. For safety reasons, it has just one person in each hub facilitating picking and packing and handing parcels over to couriers.

Cue uses the Shippit platform, which means its parcels are delivered by a range of courier companies, including Australia Post’s StarTrack, CouriersPlease and Drive Yello, among others.

“The usual order routing and optimisation is still in place, and we do see some benefits in speed and cost in being able to do local delivery,” Lenton said.

But he acknowledged that the company’s heavy reliance on store inventory and staff to fulfil online orders, previously a competitive advantage, is now a potential hindrance.

“Those [retailers] that do a level of store-based fulfilment could be seeing a knock-on effect,” he said. “[It] may be leading to delays in shipping.”

A spokesperson for Australia Post confirmed that its delivery network is experiencing severe delays.

“Due to significant reductions in air freight capacity, there will be severe delays on the letters and parcels network that Australia Post operates around the country, particularly to regional and rural communities,” the spokesperson told Inside Retail.

At the same time, it is seeing a big increase in parcel volumes, similar to what it experiences during Christmas time and during online sales such as Black Friday and Boxing Day. But it can’t put on more people in its facilities to handle the surge, due to social distancing requirements.

The spokesperson said the postal service is working hard to get parcels to customers as quickly as possible. But founder and director of Adore Beauty Kate Morris said the delays seem to be getting worse.

“Especially into WA, Tas and QLD, presumably due to the border closures,” she told Inside Retail in an email. “Latest advice is an extra 5-7 days for WA/QLD.”

Morris acknowledged it has been tough for Adore Beauty’s own warehouse staff to keep up with demand while adhering to new safety protocols, such as staggered shifts and fewer people on the floor.

The lack of unit load devices, or parcel cages, which Australia Post typically provides, means it is also taking longer to load parcels onto pallets.

“We are hiring and scaling up as fast as we can while making sure we continue to keep our team safe, and meet all the requirements around physical distancing and hygiene,” Morris said.

So far, however, the delivery delays don’t seem to be impacting customer satisfaction.

“Regular and honest communication with customers has really helped. Most customers understand that it’s not just business as usual,” she said.

Cue’s customers have also been “quite understanding” about the delays, Lenton said.