eCommerce in Europe up 30% - but a big wave of bankruptcy will hit retail hard in 2022.
Retail stores closed due to lockdown and nothing else to do but stay at home. What do you do? Right: Binge-watch Netflix and shop online! Small wonder eCommerce is up 30%. Amazon and Zalando are the big eCommerce winners of 2020 in Europe.
You can read all about it in the new PostNord eCommerce report. I will not go into detail about it, just download and see for yourself here: Download the full Report on the PostNord Website.
Beware of a big wave of bankruptcy hitting local retail hard in 2022
But what goes up one way, needs to go down the other way. Only yesterday I had a long call with a trade association in Germany. They revealed that there will come a big wave of bankruptcy starting in 2022 and they already know who will be closing the doors (it’s only January 2021 as I write this!).
This is due to the fact that governments have granted to postpone rents, debt rate payments, and many other financial liabilities to not come into effect until 2022. Sure, that is supposed to take the pressure off local retail, but is it? And with stores in lockdown, they are not able to make the missing part back with eCommerce alone. That leaves the liabilities open to accumulate over the whole year.
But will that desperate grab for control only hit the retail and service providers having trouble staying alive? No, because when no one is paying rent or open orders and other liabilities, the problem gets pushed towards the manufacturers and other providers too.
And not only retail but all kinds of local service providers and gastronomy locations will be hit hard. Imagine your favorite club or bistro closing because of a virus that holds the world in its deadly grasp?
Looks like the only ones profiting from the lockdown are the big marketplaces that had already set up their infrastructure before Corona hit. Who else can benefit? Any logistics service, SaaS subscription business models, and anyone that is able to transform and digitize their business model fast enough.
The question remains: is this a good or a bad thing?
I wonder what it will be like in a post-Corona world. Will people have learned the lessons of digitalization that they have tried so desperately to ignore over the past two decades? Will brands and service providers be able to adapt to the new reality and come out stronger?
Conservatives will argue that we will lose and maybe they are right. Maybe it is really too much. But what about the possibilities here? The fire is burning down the town. That leaves a lot of space for new plants to be seeded and come out stronger on the other side. Archaic crusted structures will die down to be replaced by lean and mean hyperflexible automatons that are more agile enough to adapt to most critical situations and still persevere. To make a living under harsh conditions. Isn´t that the way nature always works? Why does that have to be a bad thing for our business world? Maybe the time for the analogy of dinosaurs to go extinct and make room for mammals is right now?
Is that painting a black and bleak dystopian future?
Or is it the start of the Cyberpunk revolution that futurists have been waiting for all the time? If you ask me, we are still behind too many years. But then I am one of those people that wants to live in the future and no progress cannot be fast enough.
Some truths that retail brands finally need to come to understand
… is what industry experts have been preaching for more than a decade now:
Stop order cycles that happen 12 months before delivery.
Stop shipping collections 3 months before the season and start shipping just-in-time.
Accept smaller preorders and manage more NOOS and seasonal stock at your own risk.
Offer more technical solutions for endless-aisles dropshipping orders.
Offer connected retail experiences to your in-store customers.
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Thorsten Hunsicker is a serial entrepreneur, multichannel eCommerce and online marketing expert for more than 15+ years, home office junkie, and proud dad of two super kids.
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