Annual E-tailing Update: COVID-19 virus shakeup

This is an excerpt of the original article. It was written for the November 2020 edition of Supply Chain Management Review. The full article is available to current subscribers.

November 2020

Supply chains have been in the spotlight like never before over the last eight months. That hasn’t always been a good thing. The perception, reinforced by shortages of products essential to our daily lives, is that supply chains were not up to the task and failed. The reality, as argued by MIT’s Yossi Sheffi in his new book, “The New (Ab)Normal: Reshaping Business and Supply Chain Strategy Beyond COVID-19,” is that supply chains performed as designed—they did what we expected them to do.

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This represents my fifth e-tailing update about the evolution of consumer e-commerce. The series has chronicled the evolution of e-tailing from the eyes of a supply chain analyst. It has primarily focused on the battles between the heavy-weights, brick-and-mortar Walmart and e-tailer Amazon, as a reflection of what has been happening in the industry.

In my last column, “Supply chain heroes and lessons from COVID-19,” I discussed the breakdown of two basic-need supply chains—food and medical supplies. I stated that what we have learned during the pandemic is that, despite creating very efficient supply chains, our efforts have sometimes fallen short of meeting some basic needs, even in affluent countries.

The U.S. food chain is really two distinct ones. The grocery industry that serves home consumption—think grocery stores and business-to-consumer (B2C)—and the other is the food service industry that delivers to restaurants and other commercial institutions for food consumed outside of the home (B2B). Prior to COVID-19, that second supply chain accounted for the majority of U.S. food expenditures, as Americans dined away from home more. Thus, this year’s update is all about COVID-19’s impact on e-tailing, because the disruption in the food supply has drastically affected the overall retail picture.

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