Shops and the Pandemic: Can They Work Together?

When the government implemented the first lockdown, Fiona Jamieson and Sergio Mastrodonato tried to find solutions about all stunning soap sitting in Lush’s flagship Oxford Street Store.

Online orders are indeed rushing like a flood once a physical shop closes. However, demand is never lightweight that the website needs to take a look at offline temporarily. Wasting three floors full of cosmetics is not what the pair want, which leads them to buy a can. 

Ms. Jamieson, the head of people and organization development at Lush Oxford Street, doesn’t want to waste those fresh products at the store. On the other hand, returning those products to the manufacturing center is not an option. Why don’t they make a local distribution center by using the shop?

After buying a van, Ms. Jamieson and her manager, Mr. Mastrodonato, called this new business the Lush Local. They serve customers on social media and also loyal clients who lived nearby. Payments are handled by the customer care team while packing is done onsite. 

Later, the entire company adopts the same model and Lush Local now has rolled out across the UK. A pop-up e-commerce center might not be the best appearance on the High Street. This is called “dark stores” which means that retail outlets that exclusively take care of orders through online shopping.

Lush stores plan the reopen on Wednesday after England finally comes out of the second lockdown. However, the shipping stations don’t mean to be packed up by the company after all. On the other hand, customers window shop soaps right in front of the shop while staff do the packing and delivering through “the back of the house”.

According to Ms. Jamieson, the company wants to reach all customers in a way that will work best for anyone.

The fulfillment centers – places to process, pack, and dispatch orders – are the most sought-after type of property across the UK. The pandemic makes online shopping more popular than ever. According to data, e-commerce skyrocketed 50 percent in the UK.

According to a report by CBRE’s real estate service and investment group, big warehouses rented hit a high number during the pandemic. Andrew Jones, the chief executive of property developer LondonMetric stated that the pandemic promotes “more clicks and fewer bricks”. Mr. Jones also shows a property portfolio that 70 percent of buildings are dominated by distribution operations and house logistics. However, the price has soared.

Amazon and Argos, for instance, pay all the rent on time, considering they are the players at the forefront. However, it is not necessarily applicable for many stores on London’s Oxford Street. Data reports that several tenants in Oxford Street negotiated down rent prices up to 50 percent.

Mr. Jones said that he only keeps the rent to flow. However, the last 15 years show how everything has changed in physical retail, which is ugly.

At the end of the day, the high demand for big warehouses has inspired a lot of people to recreate similar business models but has smaller spaces.

Bill Thayer, for instance, has been in retail logistics and online operations for 35 years. Today, he has Fillogic, his own firm that runs with Rob Caucci. They rent some disused stores in shopping centers in the US to build mini-warehouses and distribution centers.

The firm works with online brands and retailers that need to pack and send goods from stores. Fillogic offers same-day delivery, which allows the stores to restock items quickly while handling customer returns.

As uncertainty in economic conditions has crushed big brands from centers, Fillogic can pick up bigger spaces with lower prices. The pandemic has made the demand for this kind of business skyrocketed. While all logistic networks are crumbled, there are not many people out there to take care of this job. Meanwhile, retailers need to ship items. This is where Fillogic fills the gap.

For instance, Tesco in the UK and Walmart in the US scale up their online and delivery services during the first lockdown, considering lots of people transforming their shopping habits into online shopping. 

In China, grocery shopping has turned into playing iPads, considering anything can be picked and bought through a few taps on the screen. Mr. Mardle believes that the future is about enjoyment.

For Lush, Fiona Jamieson has taken seriously about logistics. The company has also learned a lot about logistics due to the pandemic. If walls and feet have become a barrier, the street is where the opportunities are.