Diversification Key to Overcome Automotive And COVID-19 CrisisBy Andrea Villar | Thu, 07/08/2021 - 05:00
Q: How has the COVID-19 pandemic affected ULINE’s operations?
A: We began to see the COVID-19 effects in mid-March when companies were already anticipating the possibility of stopping operations at their plants. In that month, we began to receive notices from our clients saying that they were no longer going to receive visits and we saw investment beginning to fall.
As a company that distributes industrial materials and manages different product lines, the increase in sales of hygiene, cleaning and sanitation products meant that our losses were not so great. We have also seen an increase in e-commerce. At present, we are all buying more products online to avoid contagion and companies that did not consider this sales channel before now see it as a necessity.
On our website, we have received many requests from new customers looking for products for different uses, mainly tools to prepare for the new normal. Companies are looking for signs related to crowd control and hygiene, among others, to comply with the sanitary measures imposed by the Ministry of Health.
Q: How do you see e-commerce behaving once the pandemic has ended?
A: E-commerce is here to stay. In Mexico, we have been more conservative in this matter due to the mistrust most people have about sharing their information online. We manage a multichannel sales strategy. In addition to e-commerce, we have a physical catalog of more than 800 pages and a phone line that operates 24 hours a day. This generates more confidence among clients, as they have more sources of information and know that they have a backup communication line in case of any doubt or problem.
In the wake of the health contingency, people were forced to shop online and there is no going back. As for industrial e-commerce, supply is a great challenge at the moment since it is difficult to obtain certain raw materials due to high demand. For example, N95 mouth guards and antibacterial gel are hard to come by even for businesses that need large quantities. Over the past 10 weeks, ULINE has restricted the sale of these items and we sell them only to hospitals and people on the front line.
Q: How is ULINE preparing for a post-pandemic world?
A: We are aware that we have to reinvent ourselves and reformulate strategies to know where we are going to go. Many companies that have seen the importance of e-commerce will focus their efforts on improving their services. As for the automotive industry, recovery will be slower and more difficult than in other sectors. In May, auto sales grew 17 percent compared to April, but were 60 percent less than in the same period last year.
This will lead many companies in the supply chain to diversify toward other industries, such as health or pharma. That is the key to surviving the crisis caused by COVID-19 and the crisis that the automotive industry has been experiencing since 2016. In a few months, we are going to face a new reality and we must try to get ahead. Companies also need to be more analytical and flexible in some ways.
ULINE is a family-owned business and a leading distributor of shipping, industrial and packaging materials to companies throughout North America