It’s safe to say that this global pandemic has caught everyone off guard. A lot of businesses oftentimes have a backup plan for worst-case scenarios, but no one expected things to go from bad to worse in a relatively short time.
We like to believe that the worst has passed, but in reality, the worst may yet to come, so everyone is hoping that this will blow over soon and that we can finally go back to normal. Moreover, a lot of companies have suffered significant losses.
The lockdowns of entire cities have forced the majority of small businesses on hold, and some may never recover from it. On the other hand, the eCommerce industry has technically flourished in these trying times. However, the world of online shopping has also become more competitive than ever.
Basically, it’s a double-edged sword when you look at it. The main reason is that, aside from industry giants, many eCommerce stores didn’t have the resources to capitalize on the opportunity that presented itself. With that in mind, here’s how the Coronavirus is impacting eCommerce.
The rise of panic shopping
During the first few months of the pandemic, a lot of cities across the world went into full lockdown. Everything closed down except essential businesses, such as pharmacies and supermarkets. However, people also couldn’t go outside, so the only option left was to shop online.
All things considered, this would mean a great opportunity for eCommerce stores, but no one expected the mass hysteria to take over consumer shopping behavior. People started panic buying items in bulk, and online stores quickly ran out of stock.
Although this resulted in a massive rise in sales, both the global and local supply chains were disrupted, and stores couldn’t restock fast enough for this to mean something other than significant losses in the months to come. The ultimate result was a high demand for products but a low supply to meet the new demand.
Change in purchasing behavior
Of course, the effects of the pandemic have drastically affected the purchasing behavior of consumers around the world. For example, millennials and Gen Z, who make the majority of global consumers, are concerned about the impact of the pandemic on the economy.
They are more affected by job losses and uncertainty, which forced them to cut down on spending, stockpile certain items, and spend less on overall expenses. On the other hand, Boomers and Gen X aren’t as concerned as much, and they claim the pandemic won’t affect their purchasing behavior.
Therefore, you have a large portion of the consumer group holding back, while the smaller portion remained more or less the same. This means that most eCommerce businesses expect their sales to flatten out or start to decline altogether. Only a few eCommerce businesses in the world expect that their sales will increase as a result of the pandemic.
The positive impact
Although things looked pretty grim at the beginning of the pandemic, things are starting to settle down a bit, nowadays. Ecommerce businesses suffered through losses, but they are starting to recover – slowly but surely. The main reason is that even though there are fewer and fewer lockdowns these days, people are still focused on social distancing and avoiding crowded places, such as grocery stores.
That said, online shopping is still on the rise, with fewer panic purchases than before. This has a positive impact on eCommerce stores, especially since supply chains are up and running again.
However, global supply chains are still on shaky grounds, so people focus on buying from local eCommerce retailers. Still, a lot of smaller retails are starting to gain momentum in the local markets.
A good example is the eCommerce retailer Shoppster that consolidated products from various brands into a single platform and made it available to consumers through a customer-centric approach. The purpose is to make various products more available while ensuring that online shopping is seamless for a multitude of consumers in the region.
A somewhat predictable behavior
Now that the situation is far less chaotic than it was, eCommerce businesses can once again start to predict patterns in consumer purchasing behavior. This is great, indeed, as eCommerce businesses can focus on acquiring items that are currently in high demand and thus ensure a boost in sales.
For example, medical supplies and groceries are products with the highest demand. Other than that, consumers are focusing on books and literature, cosmetics, and fashion items.
This allows online retailers to procure required items and redesign their supply chains for items that sell fast so that they don’t have to waste resources on items that consumers are currently not interested in.
If this trend continues, and it’s predicted that it will for at least some time into the decade, eCommerce stores can slowly begin to recover from all the losses they’ve experienced at the start of the pandemic.
The eCommerce sector has faced numerous opportunities during the pandemic, as well as numerous losses. No one can predict how the situation will develop further, but online stores are more aware of the situation now, and they are, to a certain extent, prepared to face whatever comes next.