Retail During the Pandemic: What We Can Learn From Transportation and Delivery Data

Looking back on the last year, the retail sector underwent a massive change as consumers were confined to their homes, unable to shop in person. While e-commerce had been steadily growing over the last decade, the industry saw a significant surge in 2020, with online shopping growing 44 percent. Allured by promises of two-day and/or free shipping, deliveries became a key differentiator for business success during these tumultuous times.

As a result, the transportation sector saw an uptick in activity. To better understand how the retail and transportation industries affected one other, Omnitracs released its first Industry Intelligence report, diving into the relationship between delivery miles driven and the sales of priority consumer goods. The research found that that the transportation industry was a key indicator of retail success and can be used as a tool to help businesses predict future events.

What the Data Found: Transportation Miles Driven Directly Correlate With Shifts in Retail Activity

From a macro perspective, the data found that the miles driven by fleets delivering retail goods and overall retail sales correlated very closely month-to-month in 2020. At the start of the pandemic, research shows that retail deliveries dropped dramatically as state and local stay-in-place orders kept fleets from operating and consumers from entering brick-and-mortar shops. As restrictions began to ease in April, however, retail deliveries displayed an immediate recovery with a huge spike in May, as consumers realized they could still purchase their favorite things by ordering online and taking advantage of no-contact pickup.

Three sectors, however, saw the strongest parallels when drilling down into the most talked about goods of 2020: paper goods, sporting goods, and grocery/alcohol.

• Paper goods: Flashing back to the horrors of empty toilet paper shelves everywhere early last spring, converted paper product manufacturing saw an abnormal increase of long-haul miles driven in March, followed by a swift but significant dip once Americans overcame the initial panic and found comfort in having a convenient back stock.
• Sporting goods: Long-haul deliveries took a nosedive in April (a 72 percent decrease in miles driven year-over-year), but bounced back with a tremendous resurgence in May (a 272 percent increase). While consumers invested in workout machines like spin bikes, outdoor sporting equipment and free weights early on, this sector went back to normal after the supply chain was squeezed in the second half of the year.
• Grocery and alcohol: While grocery and alcohol deliveries both declined in Q2, alcohol saw less of a dip. By June, however, alcohol deliveries significantly increased, rising 72 percent in September compared to the year prior. This is likely due to an increase in the adoption of direct-to-consumer (D-to-C) delivery services, along with easing restrictions, which allowed bars and restaurants to order more alcohol to sell to their customers.

What This Means for Your Business: Now’s the Time to Optimize Your Delivery Framework

It’s no surprise to see how the retail industry matched with overall transportation miles during the pandemic — and both industries learned valuable lessons from the unique events brought by 2020. Companies, for example, learned the importance of crisis planning. Looking back at the influx of toilet paper deliveries in the U.S., the country had a normal amount of supply that simply wasn’t enough to address the abnormally high demand. However, once the supply chain was squeezed, deliveries resumed at a normal rate.

D-to-C delivery also offered new opportunities for retailers to remain successful after the initial pause caused by the pandemic. Before the pandemic, D-to-C offerings were convenient, but a pandemic made that convenience a necessity. Companies like Peloton are a prime example of this, taking part in the sales that occurred during the abnormally high movement of the sporting goods sector in May. Companies operating a D-to-C model should continue investing in that strategy as it will remain the preferred shopping method for many consumers post-pandemic. As part of this, these companies should also take a closer look at their scheduling, routing and delivery systems to ensure continued delivery success. Optimizing routes can save massive costs in relation to fuel and time, as well as speeding up delivery times to improve customer satisfaction and retention.

This transportation data tells a compelling story of the retail shifts that occurred last year, and can also be used to forecast future changes in supply and demand, allowing businesses to make more educated decisions when it comes to getting their products into the hands of consumers.

Ashim Bose is the chief data and AI officer at Omnitracs, a leader in SaaS-based fleet management and data analytics solutions.