COVID-19 coronavirus is officially a global pandemic. As it’s spreading around the world at a fast pace, it is predicted to take its toll on both people and businesses, including the e-commerce industry.
It put many of us in a completely strange and inconvenient situation and we all have questions - actually lots of questions. In this article, we will answer the most burning ones:
- How can the coronavirus impact e-commerce in the short term?
- What could change in customers’ shopping habits?
- How you can deal with the most common problems of your online store during this period?
Now it’s time for action.
With governmental lockdowns or people simply staying at home by choice, the shopping demand is moving online. But, being locked down at home, people still need to shop, either for necessities such as groceries or hygiene products, or for things to get them out of boredom or comfort them in this hard time. Shopping is a habit. Online shopping is the perfect way to keep that habit going.
Will coronavirus affect sales in good or bad way?
For now, producers of hand sanitizers, face masks, toilet paper, pasta and bottled water note significant sales gains. Long-term, however, lots of retailers are worried about the coronavirus having a negative impact on their 2020 revenue.
According to a study by the German Retailer Association, 55% of online sellers already expect or have experienced losses in business due to coronavirus.
But there’s actually slightly more data showing the expected growth of the e-commerce sector in the times of coronavirus.
On March 17th, Logistiek.nl published their predictions, expecting 50% growth for e-commerce, and Digital Commerce has also reported a 52% increase in online sales. What’s more, the latter also noted an 8.8% increase in the number of online shoppers since the outbreak of the coronavirus pandemic.
Our e-commerce clients also observe 200-300% increase in online sales weekly what calls for taking certain technological measures.
Governmental restrictions: current state (25.03)
To fight the spread of coronavirus, governments across the world have been applying the following measures, which can have a negative impact on the functioning of your e-commerce store. You should be aware of them so you can plan your backup actions. Of course, they can change every day, as the situation is dynamic.
- Several European countries have introduced lockdown procedures that can have a major impact on delivery, such as significant delays or even no delivery at all.
- Transport companies try to keep their services running smoothly, but they need to take various measures to keep their staff safe and to face governmental requirements.
- Some borders may close to non-essential travel and the transport of goods.
Plus, there’s a risk of long-term economic uncertainty, so your customers may be more hesitant to buy for a while.
State of e-commerce: the second half of March
With the lion’s share of consumers staying home, it makes perfect sense that e-commerce retailers will see an upsurge in traffic. E-commerce consultant Dan Barker highlights the impact of coronavirus across different retail categories on his Twitter. For example, furniture stores and garden furniture are doing pretty well. At the same time, all topics related to fashion have noted a major drop.
Furniture industry interest rising
Fashion industry interest dropping
Let’s be honest with each other, the coronavirus situation will probably continue or even worsen in the next few weeks and beyond. It might not be the case that all sectors will benefit from this. Shelley E Kohan, writing for Forbes, noted that:
Categories more prone to increase during times of physical retraction of a population are health and beauty, grocery, and consumer product goods. Spending on fashion merchandise may decline while Americans look to make sure needed goods are well-stocked in their homes.
This seems to be the case for the majority of the coronavirus-affected countries right now. Supermarkets are running at full capacity, while those with online grocery delivery slots are sold out for the next three or four weeks (as is the case with Tesco here in Poland) and simply cannot serve the desired amount of orders. A thought comes to mind that, if they were better prepared for this kind of situation, there would be an opportunity for such businesses to make a huge amount of additional money and help out lots of people in need.
However, while e-commerce retailers may benefit in the short-term, there are issues related to stock and supply chains that are likely to arise. It will be important for retailers to smartly invest in order for some products to meet demand.
Record number of grocery app downloads in the US
As the virus began to do damage in the US (the article shows the data from the March 15th, but now the number of infected Americans is dramatically increasing, with the number of app downloads getting much higher), grocery apps have experienced record numbers of daily downloads in March, according to app analytics portal Apptopia.
Sunday the 15th of March was a day of for record-breaking downloads for grocery delivery apps in the US, with Instacard experiencing a 2018% increase compared to February. Walmart Grocery saw a 160% increase in app downloads over the same period and Shipt experienced a 124% growth. The trend doesn’t seem to be slowing down, regarding the current circumstances, and brands need to do everything they can to follow the demand.
The coronavirus increases sales for health products
Except for groceries, the most obvious key driver of this short-term growth is health products. Sendcloud compiled the data to show the percentage increase in sales of the most wanted products in the week of February 22-29, compared to the previous week:
- Hand sanitizer sales increased by 420%
- Disinfectants sales increased by 178%
- Bottled/packaged water sales increased by 78%
- Vitamins sales increased by 78%
- Tissues sales increased by 43%
- Hand soap sales increased by 33%
- Toilet paper and paper towels sales increased by 26%
PC gaming platform Steam notes a record number of global users
It’s highly likely that the worldwide coronavirus pandemic has an impact on the steady increase of all online activity, as many find themselves stuck as home. Playing online games might be a way to fight boredom or even a way to socialize when locked down at home, alone.
The global PC gaming platform Steam has set a new record for the number of users online at any one time in its 16-year history, attracting 20.3 million users on Sunday, the 15th of March. It seems that the significant changes people needed to make in their lifestyles were not so bad for the gaming industry.
Long-term shopper habits will probably change
Interestingly, we’re also hearing arguments that, in the long term, online shopping will get a boost from the lifestyle changes forced on consumers by the coronavirus. Amish Jani, a partner at venture capital company FirstMark, predicts that the situation will force a group that was previously unwilling to shop online to open for the experience. They will learn the process, break the barrier of fear and, at least a significant percentage of them, will be likely to continue online shopping even after the pandemic ends.
There are going to be people who thought, ‘I could never not touch an apple before I put in my basket’ who now have been forced to use FreshDirect or AmazonFresh and have now said, ‘That’s a pretty convenient experience. I might do that more.’ Or who have bought meal kits to make home-cooked meals and thought, ‘That’s a much better experience than I would have thought, and I waste less.’ This is a forced way to retrain a broad swath of consumers.
It will be a net positive for all digital commerce, especially grocery and household supplies and things like that. You’ll see a bump from this and that behavior will persist going forward.
COVID-19 tips for e-commerce stores
The impact of the coronavirus spread could be vast, affecting profits or even the existence of businesses.
Below is a summary of what you should take into consideration to stay on the safe side.
1. Focus on your communication
Especially now, businesses need to be particularly careful about how they communicate. You need to remain honest with your customers, particularly with stock or delivery issues. Be open to sharing any struggles your company faces regarding the coronavirus, as people will understand and their support may even surprise you. The key is to inform your customers about the potential problems with the delivery or the supplies before it can leave them disappointed.
You need to inform your customers about the coronavirus protection measures your company had introduced, such as contact-free delivery, and your general operations.
Your support team may be bombarded with plenty of questions and they may not have enough time to answer all inquiries. It’s a good idea to prepare a coronavirus-related FAQ to be one step ahead and give your customer the feeling that you’re actively doing your best to stay on top of the situation.
2. Provide flexibility in delivery
Probably one of the most important questions you’re asking right now is “will my customers get what they ordered?”. At the moment, parcel delivery is not prohibited, however, there have been some protection measures implemented to fight the corona crisis. Carriers are protecting their staff strongly, enforcing hygiene and distancing measures, while border control is becoming stricter. As countries restrict tourism and non-essential travel, there may be some extra checks at the border crossings. Consequently, all of this can cause serious delays in shipments, especially in international ones.
For this period of time, you may not want to focus all your delivery needs on one carrier but look at several options, just to be sure that your deliveries are more or less constant when one company introduces more strict protection measures. For local deliveries, look into alternative options, such as bike couriers.
3. Keep your supply chain safe
For many industries, shipment delays are a standard in situations such as the outbreak of the coronavirus. You need to take extra care to plan your orders and ask your suppliers to send them earlier. Also, consider ordering a bigger amount than usual, as you don’t really know how the situation is going to look like during your next order.
If more parts of the world start locking down due to coronavirus, your supply chain may be significantly impacted, depending on the import route your products take.
To stay safe, you need to stay in touch with your suppliers and carefully monitor the situation in their country. Nevertheless, start looking for back-up suppliers or alternative manufacturers. Another good idea is expanding your product range so that, even if you run out of a couple of products, the sales keep running.
4. Make sure your website is running at maximum capacity
At this time, it’s possible that you are experiencing a significant increase in traffic to your e-commerce site. You need to make sure it is not overloaded and does not crash.
The most important thing is to make sure that you’re using a proper Content Delivery Network, as well as fast and reliable hosting. Even if you did not consider your online store as the main sales channel before, prepare that it may become one now. And there are plenty of things you can do to improve its effectiveness:
- Better performance - faster loading means better user experience, and better SEO positioning (and better SEO positioning has a good impact on Google Ads prices).
- Conversion boost - try testing new graphic elements such as different color buttons, offer free shipping, introduce promotions and coupon codes, use live chat software and cart abandonment software.
- Progressive app - that means more traffic and sales from mobile for your e-commerce business.
- Inventory management integrations - including software like that in your toolset means quicker supply data uploads on your website, fewer errors in terms of orders and less disappointed customers.
- Carrier integrations - consider it to carry the delivery process faster and always keep your hand on the pulse with a special system.
Let’s face it, for many retailers online stores stopped being just a channel, an addition to their offline business. It becomes their core activity and their survival depends on how effective it works.
Of all the e-commerce platforms, Shopify is the leader when it comes to web performance, reliable hosting and the number of integrations.
Thanks to our cloud-based infrastructure, Shopify Plus has a 99.98% overall uptime. Our storefront also loads 2.97X faster than other SaaS platforms.
|Contact us if you want to make your online store more efficient and profitable.|
5. Monitor the situation on a daily basis
Be prepared for any change. Make sure you get a picture of what is going on through reliable news sources, as well as from your team and from your suppliers themselves. Check the national and local regulations. Whatever rule applies today may drastically change tomorrow. Prepare yourself to be as flexible as possible and keep proactively informing your customers about any changes, shortages or delays in your e-commerce store.
There is no one prognosis about the impact that the COVID-2019 outbreak will have on the economy, sales, retail or e-commerce itself. One thing is sure - it will be a game-changer. Some industries will leave it with their heads up, while some will experience the unbearable losses. It will also have an impact on people’s shopping habits.
Although it may seem that the situation is hopeless, it is the time for businesses to act and conform with digital in order not to die.