FOOD RETAIL AND CORONAVIRUS: DAVID’S REVENGE AGAINST GOLIATH
- 13 May 2020
- Written by: Maria Teresa Moschillo
Every crisis always hides an opportunity
In the socio-economic system, the upheavals that derive from moments of stalemate and important chaos, have the advantage of highlighting on the one hand all the pre-existing critical issues and on the other of marking the path towards new strategy paradigms (upstream) and consumption (downstream). It is up to professionals, at all levels, to be able to reinvent and seize these opportunities.
The crisis linked to the Covid-19 pandemic does not fail in this pattern. Consumers and businesses have had to adapt to the new emergency. The human being, so reluctant to change habits or processes (how many consumers had never made an online purchase before the pandemic despite the ease of online shop operations? How many companies had never yet attempted an approach to electronic sales despite the proliferation of advanced and low-cost systems of new technological channels?).
Habits die hard, resistance to change is often invincible. Yet these habits have been turned upside down, in a very short time, by the new crisis.
The “stay at home” suddenly made eCommerce the preferred channel for the distribution of all types of goods – especially basic necessities and the food sector – for all types of buyers, even the most wary, or the elderly, or the least accustomed to the use of technological means.
The large-scale retail trade found itself facing an enormous number of requests, collapsing under the weight of the demand which, in most cases, was not absolutely supported by an adequate logistic system. Esselunga, Coop, Conad, Amazon Pantry in Italy are just some of the great giants of online shopping that in recent weeks have revealed their weaknesses, crumbling like giants with clay feet. But online aggregators like Cortilia also faced serious problems.
Only the small businesses that have always managed sales directly, those that never wanted to give up the very powerful and never so necessary “customer control” were saved.
In fact, we have witnessed a real delivery boom for small shops and local producers or producers of excellence, who have thus been able to teach the whole world the importance of proximity or the importance of flavor, freshness, authenticity of its products. It is the revenge of the David against the Goliath. The boy defeated the giant.
The “little ones”
Small businesses have demonstrated timeliness and efficiency by conquering new slices of consumers, even unpredictable ones as in the case of the elderly who until recently would never have thought of buying without touching.
As claimed by Romolo de Camillis, Retailer Service Director of Nielsen Connect, in Italy: “the preference is for more convenient supply methods, that is eCommerce and neighborhood shops”.
Neighborhood shops and small local businesses have seen their performance increase both in physical stores – they are closer to homes and therefore limit the journey for shopping – and as regards home deliveries, much more punctual than large retailers, whose timing during the emergency has greatly expanded (the national average is a delay of 10 days at the time of writing this article -5 May 2020, with the lockdown finished, but in full lockdown the waiting times for delivery were much longer).
This period of uncertainty represents an unmissable opportunity to conquer market shares for local producers.
What has happened in recent months leads us to think that the next evolution of e-commerce will push towards a greater investment by small local businesses, virtuous and well-established supply chains that can make themselves known to consumers also physically by establishing that bond of trust that, today, is missing from globalized eCommerce.
It’s time for local businesses and small businesses to rethink their business model. Competence, knowledge and specialization are what you need in each sector, especially in that of good food. To emerge, it is not necessary to land on large eCommerce platforms, but to make yourself known, to stand out in the “mare magnum” of uncertainty as credible, reliable and strong actor of a certain know-how, an actor who really love what they do and do not deliver to the consumer only a finished product but a modus vivendi. Healthy and true.
Companies, even the smallest ones, have finally understood that digital transformation is a priority.
Be careful though! According to Professor Noci of the Internet Media Observatory of the Polytechnic of Milan, however, the transition from one extreme to the other should be avoided: it is not necessary to turn from reticent to digital fundamentalists.
It is necessary to move on three levels:
• Omnichannel: an integration of offline and online channels;
• Attention to brand policy: the brand becomes an infrastructure that facilitates the interconnection between supply and demand;
• Knowledge of new consumer behavior.
At the macro-economic level, digital will be growing strongly in all sectors but, in parallel, advertising investments will slow down (the economic crisis is undeniably heavy).
The current scenario teaches us that consumers have a need for reliability, authenticity and credibility, values which in the long run allow user / customer loyalty.
As for the hunt for fake news, which in the media and communication sector has brought the most authoritative and reliable voices to stand out, in the same way the companies that in this period have been able to establish a relationship of trust with their consumers will advance and make themselves be worth.
How to attract consumer attention
But how can we make consumers more loyal and attract their attention?
It may not be easy for a small business to stand out on the Net. What can really make a difference, however, is an eye for storytelling (ie what the company has to tell) and for creativity (the realization of this message). The greatest advantage of the online channel is to allow brands to establish “personal” communication with customers.
As the Internet Media Observatory of the Politecnico di Milano suggests: “Different people, different messages”.
So, whether you take care of yourself or that you delegate to an external agency, it is essential that everything starts from a thorough knowledge of users and a real interaction with them.
There is no need to invest in expensive media or digital campaigns. We think, for example, of influencer marketing, which continues to be one of the main means that companies have today to make themselves known: the most authentic profiles in this period will be better recognized and appreciated by the communities also in the near future.
According to the Influencer Intelligence Marketing 2020 research conducted by the Milan Polytechnic, in Italy in 80% of cases investments in influencer marketing weigh less than 10% on a company’s reference budget. It is no coincidence that today it is the main communication lever for various industry sectors: from fashion to beauty, but above all in food & drink and home care.
The current trend, more and more growing, favors nano / micro / midi influencers over big celebrities. In fact, most Italian companies declared that the engagement of these influencers is more performing, both in terms of efficiency and with respect to the investment risk. They cost less and are considered more authentic by users / consumers than those who have “large numbers”, as they are real creators with more qualified and more active fan bases.
But who are they and what advantages can they bring to the business?
• They create content in which the public can recognize themselves and find inspiration;
• They really interact with followers, unlike most mega-influencers; they have direct, real, proximity relationships;
• They have fewer fans, likes, comments and shares, but are considered expert and authoritative in a particular niche;
This perfectly responds to the urgency of businesses, especially if we talk about local excellence, to turn to niches with which to communicate accurately and profiled and at the same time to make themselves known by as many people as possible, taking advantage of not only the classic word of mouth but also the helping personalities who reflect their values.
What we are witnessing is the revenge of authenticity. On all fronts.