COVID-19 global pandemic is one of the defining events of 2020, and that it will have implications that last well into the decade.
In this regard, “Artificial intelligence and automation are both becoming more and more important when it comes to e-commerce,” said Alex Timlin, senior vice president, verticals, Emarsys. “Brands online need to understand who their customers are to sell more effectively to those customers. But as more and more customers shift online through COVID-19, the harder it becomes for brands to make sense of the bucket load of data that consumers will be giving them.
“Artificial intelligence and the automation is helping brands to do all the hard work by segmenting the consumers into new customers, existing customers, defected returning customers, assessing the lifetime value of customers, and more. Using this information, brands can then set up targeted and personalized digital campaigns for each type of customer.”
“During lockdown situations, the best way to reach customers for most retailers apart from supermarkets is online. “What we’re seeing is that retailers who have both a physical store and an e-commerce site are using the latter to offset the losses from the closure of the former. And while that may not enable them to break even, it’s certainly helping the bottom line looWhile e-commerce has gained steady traction over the past couple of decades, the impact of quarantining has catapulted it into hyperdrive. Online sales have been growing by triple-digits since social distancing went into effect. More consumers are trying Instacart, Shipt and Amazon Fresh than ever before, if they can even get a delivery slot. It’s far from just toilet paper (though if you point me in the right direction there, please show me the way). Everything from high-end coffee makers, fitness equipment, and pajama pants are seeing a surge in demand. Even in my own neighborhood, I’ve bartered paper towels for toilet paper.k less worrying.”
While e-commerce has gained steady traction over the past couple of decades, the impact of quarantining has catapulted it into hyperdrive. Online sales have been growing by triple-digits since social distancing went into effect. More consumers are trying Instacart, Shipt and Amazon Fresh than ever before, if they can even get a delivery slot. It’s far from just toilet paper (though if you point me in the right direction there, please show me the way). Everything from high-end coffee makers, fitness equipment, and pajama pants are seeing a surge in demand. Even in my own neighborhood, I’ve bartered paper towels for toilet paper.
This resulted in an increase of 52% year on year in online sales with an 8.8% increase in online shoppers. Some might think this as a blessing in disguise for online retailers. But, the story is not yet complete.
According to a report by Bloomberg, about half of the retailers have witnessed a downward trend in their online traffic since mid-February. Also, 64.5% of retailers have not witnessed shifts to their eCommerce stores post spread of COVID-19 virus in their country. This presents a somewhat mixed picture for the eCommerce sector. In this post, we’ll try to understand the true effects of the COVID-19 pandemic on the eCommerce.
1. Hygiene Products Became the Biggest Selling Items Online
The eCommerce sector has witnessed a spurt in pharmaceutical product purchases due to coronavirus pandemic. With the closure of shops and malls, people have turned to online stores to get what is now known as virus protection gear. This includes items like masks, gloves, and personal hygiene products like hand sanitizers, antibacterial sprays, etc. According to Adobe Analytics, online stores have seen an increase of a whopping 817% in their purchases.
2. Spurt in Online Medicines Purchases
Similarly, the sales of medicines have increased significantly post the outbreak. People are generally looking for medicines for cold, cough, and flu, as expected, due to the virus’s fears. Online purchases of medicines have increased by at least 198% over the period. Online stores selling pharmaceutical products had a run for money during this period.
3. Sale of Online Groceries Picked Up
Online grocery purchases, too, have picked up during this period. It is not surprising to see people ordering online to fill their pantry to meet the worst-case scenario. Non-perishable food items have seen a jump of 69% in their sales, whereas, shelf-stable items like oatmeal, rice, and pasta sales grew by 58%.
The Bad for the E-Commerce Industry
With novel coronavirus, the business is not as usual. Situations like these have the potential to change human history.
1. Weak Consumer Sentiment has Dampened Demand
As authorities grapple with the onslaught of the virus, economies are battered by the closure of factories and the stoppage of production by the widescale lockdown. It is not surprising then to see consumer sentiment turning pessimistic. According to Sucharita Kondali, VP at Forrester, “Consumer confidence in the US economy for the next 12 months is bleak, causing consumers to buy less – both in-store and online.”
2. Supply Disruptions have Affected Products’ Availability
Production and supply of goods have taken a hit amid fears of a spread of coronavirus. Factory production has completely stopped. Distribution channels are busy in supplying the essentials. And, governments have restricted movements. How can online stores under such circumstances source consumers’ demands? It is but natural as a result that online stores, too are closing.
3. Consumers are Uninterested
Experts have initially speculated that online sales will pick up when more people will be sitting at home. That has not happened. The truth is coronavirus has completely caught the imagination of the entire world’s population. The whole world is so much pre-occupied with Coronavirus news and updates that it hardly has time for anything else. In this hour of crisis, people are more focussed on survival and as such taking more care of their family.
4. People are Being Overly Cautious
The highly contagious nature of the disease has instilled fear in the hearts of millions of people. People are avoiding not just meeting other people, but are also avoiding coming into contact with outside objects that may carry the infection into their homes. Online deliveries change many hands and the fear that the chain may itself be infected has alarmed many. This is one of the major reasons why people are ordering only essential items.
5. Adverse Change in Consumer Behavior
COVID-19 has not only affected shopping patterns across the globe, but it has also changed consumer behavior. The picture becomes somewhat clear when we see that consumers have shifted their focus to meet their survival needs. They are focused on getting the essentials, which has dramatically brought down the demand for other products.
What Lies Ahead?
It is difficult to predict at this stage how the future will unfold. It will not be wrong to say that with each passing day the situation has only worsened. And, it looks like we are in this for the long run.