It seems perhaps counterintuitive to begin the exhaustive post-mortem efforts on the COVID-19 pandemic before it is dead. And it is undoubtedly far from dead
Changes in eCommerce Consumer Behavior Amidst COVID-19
Dozens of countries still see confirmed cases surging, and many areas are riding second waves of the virus. As experts start to breakdown the wealth of data collected throughout the pandemic, it is critical to be aware of the complicated timeline of the virus and use it to the strategic advantage of eCommerce analysis. According to the World Health Organization, there are nearly 11.7 million global
confirmed cases to date and almost 540,000 deaths. Interactive data maps reveal high confirmed case numbers in Brazil, Peru, the United States, Chile, Russia, and India, with varying levels of cases smattered across the rest of the globe. Though it’s been six months since the initial outbreak of COVID-19, it remains a global health crisis that lacks safety and management strategies. In its six month run, the virus has upended health care systems, economies, and consumer behavior.
Within the onslaught of available statistics are invaluable narratives that depict long lasting changes in the global eCommerce marketplace. Even more importantly, they provide predictions of how consumers will navigate the continued health risks and money management challenges that inevitably lie ahead. This iteration of our COVID-19 analysis will break down significant shifts in consumer behavior across the eCommerce landscape. The trends that have emerged throughout the development of the pandemic can (and should) inform governing bodies and businesses as to how to alleviate the strain of the virus on public life and economic spending.
Yet, the Conference Board reports cautiously more optimistic consumer attitudes in the United States. The confidence index for June was 98.1, a slight increase from May’s 85.9. The present situation index experienced a more major jump from May to June, rising from 68.4 to 86.2. The future expectations index does not have the same notable change, but still shows a mild increase from 97.6 to 106.0. While the Conference Board only polls one country, the most consistent underlying sentiment among consumers worldwide is caution. In a post-pandemic reality, the
global consumer-base operates with an abundance of caution, even in the eCommerce space. Transparency among brands and stringent safety measures have never been so highly coveted in the online retail industry. Most consumers are reluctant and slow to return to brick and mortar retailers.
The Impact of COVID-19 on the eCommerce Marketplace
The methods of eCommerce implementation vary widely from country to country. While developed nations like those of Europe and the United States had reliable preexisting infrastructures equipped to handle an influx of usage, developing countries were forced to adopt eCommerce-based solutions without the same advanced systems of fulfillment and delivery. The World Trade Organization highlighted the need for government intervention among developing countries to accommodate online ordering and purchasing. Certain African countries relied on government officials to collect and disseminate telephone contacts for local vendors via social media to facilitate remote grocery purchasing. Customers would pay via mobile phones and have their goods delivered by motorcycle or bicycle.
Other countries have had to make telecommunications more affordable or free to the public, while central banks have temporarily permitted companies to scrap transaction costs and fees. Every country has had to be innovative and decisive in its efforts to alleviate the pressure of such a universal sharp rise in online shopping, regardless of its infrastructure capabilities.
Another facet of eCommerce changes has been an expansion in the demographic of users. In particular, the eCommerce market has seen an increase in older users, with one report citing a 12.2 percent increase in new online shoppers ages 65 and older. This could be in large part because the virus left older and immunocompromised individuals at a much higher risk of infection and death.
A recent McKinsey report stressed the pandemic’s disruption of the global supply chain and charted a decrease in brand loyalty among consumers. With worldwide shortages of essential goods and varying responses to health and safety concerns as the outbreak worsened, consumers cared less about where they purchased products.
The first wave of COVID-19 triggered shortages and stockpiling efforts for all kinds of essential goods – a trend that has been largely missing as we ride into the second significant wave of infections. While eCommerce is expected to grow long term, McKinsey indicates a halt in non-essential spending among the hardest hit countries and a much more reduced rate of non-essential expenditures globally. Though there are exceptions, the return to excess and non-essential spending will be slow.
Throughout quarantine and stay-at-home orders, the top payment methods of consumers were credit cards, debit cards, and digital wallets like PayPal. The surge in digital transactions left consumers vulnerable to fraud. Indeed, the global movement towards eCommerce transactions has been riddled with an increased risk of fraud.
eCommerce Consumer Behavior Predictions
As eCommerce experts look ahead to the last five months of 2020, there are some standout economic movements for eCommerce organizations to take into consideration. A relatively small survey done by Radial reports that while most consumers do not anticipate changing their yearly holiday budget, 66 percent expect to increase numbers of online purchases during the holidays (instead of shopping at traditional brick-and-mortar stores). Another interesting pandemic-related development in eCommerce standards? The reversal of the so-called “Amazon effect.” A study revealed that only 14 percent of consumers expected holiday gifts to arrive in 2 days, which is meager compared to the 34.6 percent that expected holiday deliveries to arrive within 48 hours in 2018.
Looking beyond the 2020 holiday season, experts anticipate a widespread, global, and permanent dependence on eCommerce to continue and expand. Seven out of ten consumers say that the pandemic experience will change the way they shop in the future, which is no surprise considering 61 percent of consumers report learning new methods of buying throughout stay-at-home orders.
The Survey of Consumer Sentiment predicts that prospective growth in the U.S. economy will be parallel to the success or failure in the fight against COVID-19. The same can be extrapolated for international economies. While eCommerce will continue to alleviate the stress and fear surrounding traditional brick-and-mortar shopping experiences, non-essential spending and large-scale growth, even in the eCommerce marketplace, will likely depend on how effectively the virus is defeated or treated.
Regardless, eCommerce has been one of the pillars in both consumer and business strategy to avoid infection with COVID-19 while obtaining essential goods. It will continue to serve as a critical method of shopping and delivery moving forward. While the world is still in the thick of the Coronavirus battle, it must also embark on the road to economic recovery, and eCommerce will play a pivotal role in both endeavors.
To continue reading about Covid19’s impact on eCommerce, click here.
Additional references and citations: