Can Anything Slow E-Commerce in the Era of Covid-19?
3 min read
- E-commerce is surging, especially during the COVID-19 pandemic
- Data security and labor management are major ESG risks
- Where are there opportunities for increased consideration of ESG?
Why the surge?
In the wake of stay at home advisories e-commerce exploded as an alternative to risky in-person store visits. Companies quickly pivoted to scale online operations, curbside pick-up, and delivery options to serve existing and new customers. People have expressed concern that the post-covid future will be dominated by online shopping and that may have negative ethical, social, and environmental repercussions.
What are the risks?
As companies quickly scaled their online presence they have had to also monitor and update data security practices. Quick growth in the spring and summer may lead to only hasty short-term data solutions and high-risk exposure. Data controversies in the last decade have shown that data breaches, regulations, and consumer concerns can be a major risk for businesses from legal, financial, and reputational perspectives.
Labor management is another large issue retailers have to contend with. Workforces can have large turnover, leading to production delays and additional training and recruitment costs. Poor labor relations can arise as a result of compensation & benefit packages, health and safety measures, working conditions, and more.
What’s Next?
All eyes are peeled to see how online retail manages risk in the coming months. As companies settle into new offerings and new delivery models, they should direct more attention to environmental concerns. They need to address the environmental impact of shipping through the use of alternative materials or subscription and refill services. Websites should be designed to promote transparency around product sustainability. All leadership should respond to employee concerns around rights and working conditions; organizations should respond to social pressure for political statements against inequity in the workplace. Join Physis today to move us all towards a brighter future.
References:
MSCI Retail – Consumer Discretionary Sector Report
The Roadmap to Sustainable E-commerce
Why e-commerce retailers should increase transparency about their products