As a Channel, it is easy to think on a day-to-day basis that we operate at the behest of our retail and catering customers. But, one thing Covid-19 (C-19) has bought into sharp focus is that wholesale is always at the behest of our ultimate customer – the consumer!

So, working out what will happen to the Channel in the longer term does require a little bit of psychology and sociology to understand what the consumer will be doing in 12 months’ time and the impact on Covid-19 on wholesale. Coupling some human behaviour analysis with some basic economic theory is probably the best steer right now for what we are likely to see in the medium to longer term.

The known unknowns

It is also reasonable to point out that there are still some “known unknowns”, such as how long the lockdown will last and how long we will be expected to social distance in some form or another. These two points are key to determining long term behaviour. According to behaviourists, the more that humans repeat the same action, the more it becomes ingrained and habitual. So, for example, if we are practising social distancing for 6 months, it is reasonable to assume that we are going to become used to not mixing in large groups, not shaking hands and also adapting the way that we socialise, the way we shop or how we spend our leisure time.

Ultimately, if society reduces its out-of-home food consumption in the long term then there will be a direct impact on foodservice operators as they adjust to a new normal post-pandemic. Equally, if consumers learn new shopping habits through social distancing and choose to continue those patterns post pandemic then wholesale/convenience will be impacted.

So, what are the “known knowns” that will help us to predict what might happen? As a business, we have been advising our clients that all the things they thought were likely to happen over the next 3 to 5 years are now likely to happen over the next 3 to 5 months and, certainly, within a year. Let’s look at what we were predicting for the Channel pre-pandemic and what do we know now?

  1. There are more operators than customers (this applies to wholesalers and outlets), we will continue to see mergers and acquisitions or closures because of profit squeeze.
  2. A hybrid retailer is emerging who will service community needs from one outlet – out of home dining and drinking, retail top up shopping and community hub.
  3. Consumers are becoming more digitally engaged and expecting to pre-order to save time or browse pre visit or even order online for local delivery.
  4. Consumers are increasingly time poor and Millennials and Gen Z are cooking less, some city developers are now building housing without kitchens!
  5. Foodservice operators are now servicing consumers as a direct result of C-19. Given that Booker and Tesco are already one business, it is true to say that there is no longer a de-lineation between wholesale and retail or catering.
  6. Amazon seemed to be the one online retailer that had the correct infrastructure to adapt to pandemic induced consumer behaviour – Ocado crashed and the Retail Multiples have no delivery or click and collect slots available.

So, what does this mean for the Channel going out in time. I don’t think we are going to see fundamental changes in direction, rather an acceleration of what we were already predicting:

Omni Channel Wholesale/”Wholetailing”: Wholesalers who want to thrive will seek to service consumers, retailers, caterers and on trade and will need to leverage the best digital technology to manage inventory, stock and order and fulfilment as cost effectively as possible.  They will be structured to accept cash and carry, delivered or click and collect orders and the fulfilment method will be driven by the customer not the ‘wholetailer’.

Hybrid “Shoptaurants”: Outlets will blend their offering to enable consumers to eat or drink in small groups on the premises, take away food and drink or buy meal solutions and top up items to take home. This is the main driver of the creation of ‘wholetailers’ – we will no longer be able to put wholesale’s customers into neat boxes – in reality, our future customers will be multi-tasking or multi-trading.

Less is More: Sadly, we will see a reduction in the number of retailers and wholesalers. This will be driven by a combination of factors – for some it will be economic necessity, whilst for others it will become a lifestyle choice.

The Digital Economy: All transactions will be underpinned by good tech. Consumers will be able to pre-order and access receipts online to reduce paper and contact whilst wholesalers will be more connected to their suppliers.  We are a long way from just in time orders but for wholesalers to thrive – efficiencies on stock and order are the last area where our Channel can really drive through savings and gain profit.

Talk to the team

We hope you enjoyed this insight into the likely impact of Covid on wholesale. If you’d like to discuss anything mentioned in this article, do get in touch.

You may also like…

TWC Sound Bites

Digital Leadership

Convenience Retail report

Share This