Many U.S. consumers are reacting to coronavirus reports by stocking up on food and household supplies in case they need to stay isolated in their homes. They are shopping online and using delivery services rather than going to retail stores.
This surge in demand is beginning to overwhelm some delivery services. Amazon has alerted its customers that it anticipates delays in the normal order fulfillment schedule. Brick-and-mortar stores are reporting buyer runs on grocery items such as water and packaged foods. People are preparing to hunker down if the coronavirus spreads beyond the very limited cases that have been reported thus far.
Overall, retailers face much uncertainty from possible challenges such as supply chain disruption, decreased store foot traffic, and worker absences. Until the virus cases and fear subsides, retailers, like the travel industry, will be a highly impacted sector in the U.S. economy.
A Bloomberg article, which is excerpted below, discusses more on this topic:
Amazon.com Inc.’s Prime Now and Amazon Fresh delivery services have been overwhelmed by demand, a sign that virus-spooked shoppers are turning to the world’s largest online retailer to avoid going to brick-and-mortar stores.
Amazon on Monday warned customers that both services would have limited availability, meaning orders are being delivered more slowly than usual. The company hasn’t reduced the number of people or trucks dedicated to either service, but it has seen a surge in demand that’s straining its delivery capacity, according to a person familiar with the matter, who requested anonymity because they aren’t authorized to speak publicly about the issue.
Prime Now is Amazon’s quick delivery service available to Prime subscribers who pay monthly or yearly dues in exchange for delivery discounts and other perks. It offers delivery of a limited selection of products similar to what is found in a convenience store in as little as an hour.
Overview by Raymond Pucci, Director, Merchant Services at Mercator Advisory Group