eCommerce and the coronavius – What’s happening?
- Shifting sales
- How well is eCommerce coping with increased demand?
- The forecast
- A new era for eCommerce
What have eCommerce businesses and brands been doing to manage the impact of coronavirus? How is the pandemic playing out for eCommerce and what might its legacy be?
While pandemics are rare, they are not unprecedented. What is unique about the coronavirus pandemic is that it’s happening in the digital age, enabling us to work at home, stay connected via social apps as never before, and of course to shop online. In this unchartered territory, how has eCommerce reacted to the challenges of the past few weeks?
Transparency is of course really important to consumers. Many businesses and brands have been proactively addressing customer frustrations and concerns about delivery delays, out-of-stocks, reduced staffing and what other steps they’re taking to mitigate the spread of coronavirus. Keeping in touch with customers not only reassures them, it’s an opportunity to engage, to support reputation and to encourage customer loyalty. It certainly pays to always be up front with your customers.
With most of us stuck at home for most of the time, it follows that some eCommerce businesses will see increased traffic and a lift in sales as people do their grocery shopping online, look for ways to keep themselves busy and keep their families entertained. In a recent survey conducted by Econsultancy and Marketing Week, 71% of more than 2,200 UK marketers predicted an increase in eCommerce sales as a result of the pandemic, although some sectors and categories will fare better than others, for example, DIY sales are up, but fashion is down. As you might expect, food and grocery eCommerce has seen a significant upturn. This looks set to be the case for most countries significantly impacted by the pandemic.
Other sectors are doing well too. With so many young people at home to keep entertained we are spending on keeping them active and entertained. And with many of us working from home, we are saving money on commuting, money that is being spent online shopping.
Other sectors are taking a hit as shoppers switch focus. Shelley E Kohan, for Forbes, writes that “categories more prone to increase during times of physical retraction of a population are health and beauty, grocery, and consumer goods.” As a result, she predicts that “spending on fashion merchandise may decline while [we] look to make sure needed goods are well-stocked.”
There’s been a spike in demand for particular products and services, such as games and puzzles, books, gaming platforms, streaming services, arts and crafts, computer hardware and DIY products. We have seen some of our client’s sales lift significantly in the past few weeks. We are seeing a spike in painting supplies: brushes, paints and easels etc., of nearly 50%. DIY supplies and garden furniture are up, as are home printer sales.
With extra time on our hands we are looking to hobbies and home projects to keep busy—DIY jobs that we have perhaps been putting off. With so many of us now working at home, and with schools, colleges and universities closed, we have been making workspaces in our homes, buying printers, second screens and peripherals.
How well is eCommerce coping with increased demand?
In China, sales of staples such as rice and flour quadrupled on JD.com compared with the same period last year. In the UK, supermarkets have issued a statement saying: “those [supermarkets] with online delivery and click-and-collect services are running them at full capacity”. Online grocery delivery slots are generally sold out for the next three weeks at least, with one supermarket website asking people to queue, in some cases for over an hour, just to gain access to do their grocery shopping or amend existing orders.
Amazon has restricted third-party sellers of health and sanitisation products such as disinfectant and face masks, due to those sellers inflating prices. In the past few days we’ve seen Amazon’s deliveries slow down too, with some people having to wait longer for their orders to arrive.
In the short term many eCommerce retailers will undoubtedly benefit. But as the weeks roll on, there may well be stock problems due to a stalling supply chain. eCommerce retailers will need to react quickly to meet the challenge of keeping their stock levels up to satisfy demand. The UK supermarket, Morrisons has just announced that the it plans to create an extra 3,500 jobs to help deal with rising demand.
As the pandemic subsides, eCommerce retailer could see a spike in returns, as their customers return products that they have been holding on to because of social distancing. An indicator of this comes from the Royal Mail who stated that while, as might be expected, its parcel service has been experiencing strong demand, returns are down: “tracked parcels and other standard products have performed well in the last two weeks, although ‘Tracked Returns’ product has been used less frequently.” It said, ‘’volumes were lower than expected due to weaker volumes of returns from the clothing sector at these unusual times.”
In the long term the pandemic is likely to have an overall positive impact on some eCommerce sectors. As people who would have never shopped online before use eCommerce for the first time, it stands to reason that some of them will find it a positive experience. This could lead them to shopping online on a regular basis. Just how much new business will be created by the pandemic remains to be seen, but the potential is great, as people become accustomed to buying online in general.
A new era for eCommerce
Because of how most of us have relied on online shopping in one form or another in the past few weeks, we believe that the coronavirus pandemic will ultimately usher in a new era for eCommerce, with more people shopping online and eCommerce retailers learning from their experiences—how they can become more resilient and how to streamline their operations.
But at this moment the forecast is uncertain. As the pandemic runs its course over the coming weeks, it will be very interesting to see what a post-pandemic eCommerce world might look like. Only time will tell. But one thing is certain, eCommerce will never be quite the same again.
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