Growth, growth, growth!
Ecommerce was revolutionizing the world long before coronavirus. Conditions arising because of the pandemic, however, had served to reinforce existing trends and have accelerated the growth of the industry. In just the first half of 2020, ecommerce revenue in the US grew 30.1% when compared to the first half of 2019. This is despite the economic woes and slowdown in growth caused by coronavirus. This growth makes sense: Lockdowns, physical store closures and fears of contracting coronavirus have meant that consumers have been severely reluctant to go shopping in stores.
The ecommerce market stepped in, offering services such as curbside pickup for added precaution. This change is reflected not just in revenue growth but also in site-traffic increase: Amazon saw a 28% growth in total visits in July compared to a 9% growth in the same month in 2019.
Consumers and COVID-19
The coronavirus has forced firms to adapt their business practices and has changed consumer patterns across the board. Some of these changes may carry on as consumers realize the ease and comfort of shopping online, and as companies adopt mechanisms for online delivery that will continue once the pandemic ends. The market research company Nielsen has identified many short-term changes in consumer behavior as a result of the pandemic. These range from an increase in health-focused buying – including commodities such as masks, sanitizers and vitamin pills – to the effects of restricted living on making fewer shopping trips and limiting online fulfillment. This means that, while some sectors in ecommerce are seeing gains, others are sufferance from losses.
The fashion and apparel market, for example, has shrunk as people are diverting more of their budgets into household items and needs in the face of a shrinking economy. Shipbob’s data from their over 3000 merchants showed an overall 20% decrease in sales month-over-month, reflecting this trend.
As the pandemic is poised to create permanent changes in supply chains and consumer behaviors, companies would do well to adapt and focus on long-term changes beyond the end of health restrictions. Many physical businesses are being forced into permanent closures.
Coupled with the changes mentioned earlier and the extended nature of the pandemic, ecommerce is looking to offer consumers a convenient and safe way of shopping that will soon become entrenched in their habits. Developing a robust, well-maintained and attractive online commerce platform should be a top priority for firms looking to attract consumers and retain sales. Given the overall depression in spending, this is even more important as businesses are now fighting for a segment of a smaller pie.
Beyond the Pandemic
The convenience brought by Ecommerce is immense, and as such it is no surprise that the industry has been expanding exponentially over the past few years. Global Ecommerce sales grew to $3.46 trillion in 2019, an increase of more than 500% from $572 billion in 2010. This growth is only expected to continue as digital technologies become more widespread and prevalent throughout the world. This is why as much as 95% of shopping is expected to be facilitated by Ecommerce by 2040, marking its indispensability in the long term even beyond the coronavirus.