E-commerce businesses in the age of COVID-19: opportunities and challenges

In a time where the vast majority of the population spend their lives online, you wouldn’t think we would become any more reliant on the digital world. Yet, with the current pandemic we are living with (COVID-19), we have turned to our devices even more. Whether it be for communication purposes to keep in contact with loved ones, entertainment reasons so we don’t die of boredom, or simply to maintain employment by working from home. Our lives are dependent on technology now more than ever.

E-commerce, aka online shopping, has seen major increases since the start of the worldwide lockdown. Grocery e-commerce was most prominent and started to rise in only the second week of March thanks to panic buyers who caused physical stores shelf products to diminish at a rapid rate (we can’t forget the mass toilet paper shortage). Hand sanitiser, cleaning products and medical supplies were near impossible to get your hands on as businesses both physical and online were unable to keep up with consumer demands. And on a not so important note, but still noteworthy, alcohol became an exceedingly popular online purchase over March and April, “reaching highs of over 160% year-on-year (YOY)” (Birmingham, A 2020).Not so shockingly though, digital streaming also soared as subscriptions increased in the first quarter of 2020.

Image sourced from: https://commonthreadco.com/blogs/coachs-corner/coronavirus-ecommerce#coronavirus-ecommerce-data

Online shopping saw increases as more and more felt that retail therapy was the best way to ‘treat’ themselves in such a difficult time. I personally noticed myself online shopping way more, because of course I was unable to spend money elsewhere and I was at home more so I was spending more time on my phone. The main downside for me however was the extended shipping times and added costs, which I know was out of the company’s control, but was still annoying because us millennials have no patience.

Australia post’s 2020 e-commerce industry report stated that in April alone more people were seen shopping than ever before (up 31%) with 5.2 million households shopping online and 200,000 new shoppers entering the market – all within weeks of the World Health Organisation declaring COVID-19 a pandemic (Australia Post 2020).

Opportunities for E-commerce:

• With more people online, audiences are increased along with user engagement – opportunity to increase digital marketing to reach those target audiences

• Growth for digital space/platforms – especially for new and/or smaller businesses going online

• Ability for small to medium businesses to go online and enter larger market, overcome geographical restrictions, and expand their consumer base (Vijay, N 2020).

• Due to more businesses being available online consumers can gather more product knowledge, have access to a wider range of products at competitive pricing – a chance for businesses to promote their brand and entice customers.

• Customer confidence in online shopping – with a change in the market landscape more people are shopping online and becoming more comfortable, and therefore encouraging others to do the same

• Creating a customer experience similar to physical stores by offering outstanding customer service, keeping up-to-date with the introduction and display of new products, strategic displays and option of sale items (Aztori 2020).

• Opportunity for businesses to build and form stronger customer relationships by showing empathy and understanding during this period. Brands can position themselves strategically in the eyes of consumers as well as create loyal long-term customers.

Challenges for E-commerce:

• Increased shipping costs, delivery delays and impact of boarder restrictions on transport

• Overall disruption in supply. Not only are businesses struggling to keep up with consumer demands they are struggling to maintain a supply of certain goods

• Increasing product prices due to competitive pricing strategies in order to stay in the game. Sales and deals are crucial to encourage spending, which benefits customers but decreases profits for businesses

• Cyber security concerns, including the possibility of exposed customer information and credit card details. (World Trade Organisation 2020).

• Product safety concerns. Though experts have found that the virus can live on surfaces from 3 hours up to 3 days, they state it is highly unlikely that customers would actually be exposed to the virus when receiving the package (Meyer, S 2020). This information does of course still worry most people. This, in addition to the chance hygiene products you may be purchasing are not authentic/up to medical standards for example hand sanitiser or face masks, seriously harms buying confidence (World Trade Organisation 2020).

Although these challenges may seem difficult or somewhat unachievable for some businesses, this is the new environment for all ecommerce markets worldwide and just like pandemic, we have no control over it, we can only improvise, adapt and overcome.

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References:

Australia Post 2020, ‘Inside Australian Online Shopping: 2020 ecommerce Industry Report’. https://auspost.com.au/content/dam/auspost_corp/media/documents/2020-ecommerce-industry-report.pdf

Aztori, A 2020, ‘Could COVID-19 create opportunity for a new eCommerce model to flourish in Australia?’, 7News. < https://7news.com.au/business/finance/could-covid-19-create-opportunity-for-a-new-ecommerce-model-to-flourish-in-australia-c-1115575>

Birmingham, A 2020, ‘Huge spike in Ecommerce Once Covid-19 hit’, Which-50. https://which-50.com/huge-spike-in-ecommerce-once-covid-19-hit/

Meyer, S 2020, ‘Understanding the COVID-19 effect on Online Shopping Behaviour’, Big Commerce. https://www.bigcommerce.com.au/blog/covid-19-ecommerce/

Vijay, N 2020, ‘Coronavirus Outbreak: The Pandemic Spells big Opportunities in E-Commerce and Logistics’, Firstpost. < https://www.firstpost.com/tech/news-analysis/coronavirus-outbreak-the-pandemic-spells-big-opportunities-in-e-commerce-and-logistics-8460781.html>

World Trade Organisation (WTO) 2020, ‘E-Commerce, Trade and the COVID-19 Pandemic’. https://www.wto.org/english/tratop_e/covid19_e/ecommerce_report_e.pdf

#ecommerce #COVID #onlineshopping