UPDATED: How Will Stage Four Impact E-Commerce?

Clearly the most intense restrictions that the state has experienced so far, there is a lot that is going to change. Power Retail will keep you updated throughout the day.

What We Know:

There have been several changes for Victorians in the last few hours, with Premier Daniel Andrews making further announcements this afternoon. So far, these are the changes we’re set to experience:

UPDATED: 3:45PM

• Retail shop fronts are to close, excluding essential stores such as supermarkets, chemists, bottle shops, petrol stations, butchers and bakers.
• Retailers that offer services such as Click & Collect will be able to continue, but will be subjected to online only. 
• Melbourne and Mitchell Shire has entered Stage Four of restrictions, similar to New Zealand’s restrictions from March to April.
• Melbournians will only be able to shop within a 5km radius of their home.
• Regional Victoria will be placed under Stage Three restrictions from Thursday, 6th August.

Stage Four Restrictions – NZ Style?

In New Zealand, the country went into Stage four lockdown almost immediately. NZ Prime Minister, Jacinda Ardern, set the restrictions to an extreme level in an effort to reduce the harm caused by COVID-19. These restrictions were intense, and they impacted almost every industry in the country. Here’s a break down of what was impacted by Stage Four in New Zealand:

Transport Network Changes

The couriers across New Zealand were no longer able to carry or deliver non-essential items to residents. This means that e-commerce deliveries were put on hold until the restrictions had been lifted.

“The view coming out of government to date has been that the transport network needs to be preserved for carrying essential items. But if we’ve got non-essential items coming across the border, then that’s something government needs to look at,” said Greg Harford, a Retail New Zealand spokesperson, in March. “There are two ways of doing this. One is to perhaps clamp down on those items coming in, or potentially creating a level playing field and freeing things up a little bit more domestically as well.”

How did this impact New Zealand? 

While essential items and retailers remained open, including supermarkets and food delivery services, other retailers had to align their strategies to work with the government restrictions.

TheMarket.com said it was realigning its strategy and re-enabled some of its stores on its platform that were in line with the government’s guidelines. “This will be a limited range of stores and products within the description of Food, Beverage, Pet and Healthcare,” the company explained in March. “At this point, we have been informed that our wine and beer merchants fall under such description so some are now open again for orders.”

In the Power Retail’s Town Hall information session, hosted in March, it was indicated that if Australia were to enter the same restrictions as a whole, there would be massive economic damages.

“A New Zealand scenario could wipe out $25 billion a year minimum (annualised) of e-commerce revenue,” said Grant Arnott at the Town Hall information session. Even if Australia were to enter these lockdown measures for a single month, there would be an estimated loss of $4 billion for retailers across the country.

However, these lockdown measures are only for residents of Melbourne and Mitchell Shire. This means that the impact would be significantly lower than the estimated hit. Furthermore, even after this hit for the retail industry, there’s a likely chance that e-commerce and retail will bounce back once restrictions are lifted.

In New Zeland, e-commerce sales have almost doubled compared to the same period last year in the month of April. In a report from Emarsys and GoodData, e-commerce sales were up 189 percent YoY on 15 April.

“Pureplay e-commerce and online retail activity are trending positively in New Zealand due to the relative success of the stage four lockdowns and the increase in customer confidence as the country appears to have seen the worst of the pandemic,” said Adam Ioakim, the Managing Director of Emarsys APAC.

“E-commerce is now more important than it has ever been – both from a business point of view to mitigate cashflow issues and from a consumer point of view to get access to goods and services,” he said.

What About Australia?

While we’re still somewhat in the dark regarding what Victorians can and can’t do, there has been pressure put on the Victorian Premier to take swift action. “I want to assure all Victorians supermarkets, the butcher, the baker, food, beverage, groceries, those types of settings, there will be no impact there,” Andrews said on Sunday.

Bunnings Managing Director, Michael Schneider, has pleaded with the Victorian government to continue the hardware stores opening hours. He also said that he speaks on behalf of all hardware retailers.

It’s still unclear whether Bunnings will remain open as an essential service, or if it will be strictly limited to tradies. “We always believed we play an essential role,” he told The Australian. “If there is a freak storm and roofs are damaged, it is tarpaulins and ropes and waterproofing equipment. If your hot water system goes, if your smoke alarm goes or light bulbs go — these are all things you need for urgent repairs.”

Schneider has also pleaded for the continued service of Officeworks and the likes. “The second part is that along with businesses like Officeworks, you are going to be running your classrooms and your offices from home so that requires lights, that requires tables, it requires power cords and cleaning products,” he said. “And we play an important role in taking pressure off the supermarkets because we actually supply a range of products that overlap in those cleaning products so we spread the load between supermarkets and others.”

Power Retail will keep you updated with the latest news as it happens. 

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