People thought it was the end of the world. Health care systems crumbled, entire cities sat silent, businesses shut their doors, and mortality rates were so high that the global funerary industry could not keep up.
How Has COVID-19 Changed eCommerce?
The eruption of the Coronavirus at the start of 2020 — and the fear and panic that rippled across countries with it — brought our daily lives to a screeching halt. The thing is — it wasn’t the end of the world.
While the pandemic is far from being completely eradicated, the panic has passed, and we are all left staring at a culture, society, and economy that we don’t recognize. COVID-19 has caused massive structural shifts overnight, and just now, as we stand at the start of the road to recovery, we can see and understand our post-pandemic world.
From unprecedented unemployment rates to continuity plans for unprepared offices, there are endless conversations about omnisale channel companies and brick-and-mortar storefronts transitioning their business models into entirely online operations. But what about the preexisting eCommerce industry? How has it borne the Coronavirus burden?
The Impact of COVID-19 on eCommerce Clicks, Sales, and Consumers
Retail spending has been down for two months now (except for the grocery stores), but the eCommerce component of national spending is way up. The digital landscape undoubtedly looks different. It’s full of micropatterns and shifts that have made the terrain hard to navigate and even harder to anticipate. To track and analyze each change is a daunting task (and one that will likely take years and many, many articles to achieve), but here are three central ways in which COVID-19 has already reshaped the eCommerce landscape:
1- Consumer behavior
The relationship between consumer behavior and eCommerce strategy is both complex and symbiotic — one both reflects and dictates the other. When it comes to generating sales, understanding consumer behavior is perhaps the singularly most vital facet of eCommerce, and it’s an incredibly dynamic and fluid element of the process. How people are shopping is changing now at an alarming rate right now. Data reveals more brand engagement as consumers spend more time at home. Customers are interacting with companies on their websites and social media platforms much more frequently throughout the pandemic, which puts more pressure on companies’ marketing efforts. It’s not just about how consumers are purchasing online; it’s also what they’re buying online. Even though eCommerce is experiencing an accelerated growth rate, the average order value continues to decline in U.S. retail markets during the lockdown, which is just one indication that American consumers are spending cautiously. In the first four months of retail spending this year, grocery sales were the only category to see a rise in each month of 2020 while the tourism and accommodation industry has tanked (unsurprisingly). Unemployment and uncertainty have taken their toll. There are several key factors at play in these fundamental shifts in spending. Psychology plays a pivotal role in consumer spending habits, and the panic instigated by COVID-19 had everyone stocking up in non-perishable foods to avoid food shortages and being left without sustenance.
2. Company advertising and marketing strategies
Millions of stores are transitioning to the same entirely eCommerce model all at once, which has made the eCommerce market much more saturated than it has ever been. Adjusting to it has been one of the most critical and nebulous challenges to navigate since March. With thousands of new players in the field, deals like free Google advertising for small and mid-sized businesses, and radically different consumer priorities, allocating digital marketing resources cleverly and adapting company messaging to the culture of the pandemic is a must. Companies now face the challenge of gaining and retaining customers in a much denser digital marketplace. Businesses are expanding and adjusting their media marketing, email marketing, content marketing, and advertisement strategies to leverage 21st, technology-driven resources to their advantage and set themselves apart from the crowd. It’s an effort well-spent. Digital marketing and advertising strategies make or break a business, and consumers were already responding to and relying upon thoughtful company marketing to identify and purchase goods they needed online before the pandemic. We will continue to see eCommerce industry events that are rooted in advanced and strategic changes in digital marketing approaches.
3. eCommerce expansion
The virus forced companies to adopt online sales models to stimulate much-needed cash flow and stay afloat for the duration of the health crisis. COVID-19 has seen new eCommerce stores crop up left and right via DIY website platforms like Shopify and Wix, which has created a much more saturated marketplace. Since April 2, the stock price of Shopify has more than doubled. Wix stock prices went from $81.50 in midMarch to a peak of $215 on May 22.
The number of new Shopify-powered stores increased by 62% between March 13 and April 24 alone. Indeed, Shopify has given small businesses the autonomy and resources to stay alive as others shriveled under the weight of COVID-19’s impact. The new industry entrants had no choice but to pass through the eCommerce gateway but have since been able to capitalize on opportunity and adapt to the changing marketplace.
In the face of the Coronavirus, Amazon hired 175,000 employees, 125,000 of which will become permanent roles. While the hiring spree didn’t come without hardship, the eCommerce giant was forced to expand its capabilities to meet increasing demand. This kind of workforce increase during such universally high unemployment rates is significant.
The Post-Pandemic Digital Economy:
Where Does eCommerce Go From Here? Even though online shopping has been on the rise for years, COVID-19 has accelerated the widespread use and dependency on eCommerce. In the first quarter alone, the share of eCommerce sales jumped from 11.3% to 11.8%, which is a tremendous dollar value increase. Experts predict that this number will grow exponentially as we move into the second quarter.
Indeed, online sales and the global supply chain have been cornerstones of COVID-19 crisis management and containment; communities in lockdown relied on eCommerce to get essentials like fresh food, personal goods, and household items.
Yet, the system experienced constant breakdowns and delays. As airports around the globe shut down, and some of the world’s largest manufacturing companies paused operations, the movement of goods from the point of production to consumer-sale was upended. This disruption, combined with the millions of shipping and logistics employees being put at risk by working throughout the worst of the virus’s spread, has sparked permanent changes within the global supply chain. The future of delivery is being reimagined, and we will all see massive strides made to improve upon the methods in which products arrive at consumers’ doorsteps.
Another evolution in eCommerce? Further advancing personalized and targeted marketing and advertising efforts. COVID-19 has proven to millions of businesses worldwide what digital marketing experts already knew: individualized and consumer-specific online shopping experiences that replicate human connection and interaction generates sales.
Our global journey back to normalcy will be a long one, and it’s unlikely that consumer psychology will devolve into pre-COVID-19 spending habits. The fear of getting sick again, the attachment to the sense of normalcy established throughout the quarantine process, and the convenience of eCommerce will encourage consumers to shop online for essential and non-essential goods more permanently.
Is this the beginning of another eCommerce revolution?
To find out more about Covid19 impact on eCommerce, continue reading here.