How COVID-19 Is Transforming Ecommerce Industry

The outbreak of Coronavirus Disease has had a deep impact on our lives. Not a single a country has been able to protect itself from the direct or indirect effects of the virus.

As a preventive measure, governments around the world imposed complete lockdown to stop the pandemic. Businesses too had to shut down their processes temporarily, but completely. One of the industries that were allowed to operate was ecommerce, for which the virus created unique set of challenges and showed optimistic ways for survival.

COVID-19 and Ecommerce Industry

For the past 10 years, ecommerce has shown a growth of nearly 20% every year.

The effects of coronavirus on ecommerce are more than panic buying, and retail and online stores going out of stock. Some segments of ecommerce have gained an exceptional growth, while others couldn’t manage to even survive.

While overall global retail sale is expected to drop by 5.7% this year, in the first six months of 2020 retailers in US grew remarkably at a rate of 30.1%, with sale crossing the of $347.26Bn mark.

In the Q2 this year, about 20% of total spending by US consumers was for online orders, which shows a growth of 44% from the last years’ data.

Without a doubt, the epidemic has brought a significant shift user behavior for at least a few years, if not permanently. And this is going to have a colossal effect on markets, specifically retail and ecommerce.

As the lockdown opens up and businesses gradually return to normalcy, it is time for us to learn what the outbreak has done to the ecommerce industry.

In the later sections of this blog, we talk about some of the ways COVID-19 has transformed the ecommerce.

Increased Sales

Because of the lockdown and the fact that the virus quickly communicates through human contact, people now avoid getting into crowded places as before. Brick and mortar stores, shopping centers, and local markets are closed, or are working with limited stock and staff.

So, to get the essentials such as foods, vegetables, fruits, dry fruits, medicines, masks, and sanitizers, a large number of people are moving to online shopping platforms and doorstep delivery services.

This is where you can avoid crowd, and can complete the billing and payment and get your requirements delivered to your doorstep without having to go out and queue up. Apparently, online shopping is a safe practice and it helps prevent the spread of disease.

It has triggered a massive increase in ecommerce sales since coronavirus lockdown. The increase can be seen not just in the order value but also in the number of items per orders and the number of orders.

The average order value from customers in the ecommerce has increased by 31% and the number of items per order by 60%.

The sales of electronics which saw a severe drop in sales during the initial phase of lockdown has now jumped to 155% after March. The sales of handcrafted items, such as masks and furniture has uplifted by 146%.

Approximately, global users spend $11,000 per second on Amazon only. And Amazon is not the only ecommerce store in the world. Now, you can easily make out the amount being spent by consumers during the pandemic.

Changed User Behavior

As manufacturing and production industries stopped operating owing to the lockdown, it caused a great disturbance to the ecommerce supply chain. Most of the supplies were completely blocked or had limited availability.

Apart from this, the interest of users has also changed from things of luxury to things of immediate and near-future needs. In addition, shoppers are now more interested in contactless buying and payment experience, and ecommerce serves that pretty well.

To be exact, the sale of products has not affected. The way the users by these products and service of their needs has transformed a lot due to the epidemic.

About 36% of buyers mention that they won’t go to retail stores and supermarkets until a reliable vaccine/medicine for coronavirus is available. Of which, nearly 68% of people assert that they will continue buying essential supplies online even after the pandemic subsides.

But that does not mean that they aren’t buying. Festive and holiday seasons are approaching. It will be interesting to see the sales data at the peak of sale season and then, summarize the effects of the virus and shutdown this year and do the predictions for next year.

New Product Strategy

Despite the fact the sales of electronics has spiked, the sale of mobile devices and other home appliances has drastically dropped. We can also see a negative impact of slowdown on sales of fashion, beauty and cosmetics, and automotives. You can understand it better using this chart.

The sales of tour packages and train and air tickets online are expected to drop by 44% this year, and experts believe that recovery in this segment is not likely until the mid or later months of next year.

The automotive sales also saw a drastic downward trend. In China, it was down by more than 80% due to the coronavirus shutdown.

The change in purchasing behavior has made ecommerce players develop new product strategy. The product categories that gained and maintained their momentum throughout lockdown are online entertainment and OTT platforms, online education and professional training, foods, drinks, consumer electronics, and self care and hygiene supplies.

Some of the uncommon goods – like face masks, disposable gloves, and face shields too are quite in demand these days.

There is also decent rise in the sales of grocery and decorative items like furniture, vases, and paintings. Home décor sales have witnessed a 7% increase this year after lockdown.

In March 2020, the total global traffic on websites that deal into home décor items was 1.7 billion, which in January this year was 1.5 billion and Ecommerce grocery websites registered a 40% hike in traffic and 67% rise in sales since lockdown.

This shift in consumer behavior has made ecommerce players fine-tune their product strategy, based on the availability of their supplies and demand from consumers.

Website Makeover

While traffic and sales are down, smart ecommerce businesses are making the most of this time to fix their website’s look and feel.

TobaccoPipes.com is an online store that sells a variety of cigars, smoking pipes, and accessories from leading brands. During the month of June, they not only fixed the design- and development-related errors of their website, but also fortified their SEO by improving their on-page optimization.

Your ecommerce marketing strategy should allow you plan these updates more often. Search algorithms change and with that, your website’s SEO and other traffic-driving and performance related aspects too should be changed.

Doing so will make your website ready for the time when everything returns to normal after the virus has gone. In the mean time, it is not advisable to stop your SEO, SMO and other online marketing strategies. But remember this is no time to market aggressively.

Bottom Line

There are basically three main challenges before the ecommerce sector, and that are – the changed consumer behavior and interest; the availability and acceptance of their product; and the experience that a visitor/customer gets on their website.

Although the market dynamics are shifting every week, ecommerce industry has benefited most during the lockdown even after these mountain-high challenges.

The buying pattern and behavior of consumers have changed in the new environment. And with that, businesses too will need to acclimatize themselves to serve the new demand and sail through these difficult times. At the same time, they will need to stay prepared for the good days to come again soon.


Guest Article by Smith Willis

Smith Willas is a freelance writer, blogger, and digital media journalist. He has a management degree in Supply Chain & Operations Management and Marketing and boasts a wide-ranging background in digital media.

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