Deep Dive: How small firms can benefit in the growth of home delivery

  • 02 Dec 2020

The Covid-19 pandemic accelerated many trends that were already happening, and the growth of online shopping and home delivery is one. With most of the population only leaving their homes for very specific reasons during lockdown, and often with more time and, in many cases, more disposable income on their hands as a result of not having to commute, demand for online purchases increased rapidly and, with it, for delivery to their door. And it looks like this is here to stay.

After a year of disappointing growth in 2019, and a slow start to 2020, online sales grew significantly, rising year-on-year by 23.8 per cent in April, 32.7 per cent in May and 41.3 per cent in the week during June when many non-essential stores reopened, according to analyst firm IMRG. 

Such growth was inevitably influenced by the fact that all non-essential stores were shut during lockdown, but the ongoing threat of coronavirus and the prospect of people working from home on a more regular basis means home delivery is likely to be a more prominent part of our lives in future, alongside the potential for more local shopping.

 

For small firms, offering home delivery can add greater choice for customers, and could prove essential should physical premises be required to shut down again. Research by FSB from April, during lockdown, found 9 per cent of all small firms had started making deliveries to customers as a result of the crisis, with the number rising to 11 per cent among firms that expected to remain open. 

Many businesses have offered home delivery for some time, and those used to trading via online marketplaces such as Amazon and Etsy have built their whole business model around this, using the services of third-party delivery firms to ship products.

Books, clothes, gifts and food are all frequent arrivals on doorsteps. 

However, the pandemic has also created demand for new items to be delivered, including those which may previously have not been considered by either customers or more traditional businesses. Deliveries of flour or baking products soared during lockdown, as did meals from restaurants and even luxuries such as afternoon teas, cocktails, chocolates or speciality cheeses. 

While this could pose problems for some businesses, particularly those with presences in areas that have seen reduced footfall, the rise of home working and home delivery offers the potential for small firms to carve out a niche with a lower cost base. It may be that home delivery proves something of a saviour for many, in an otherwise tough landscape. 

Related topics