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Tracking the COVID-19 Impact On E-commerce Companiesby@rshar
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2,266 reads

Tracking the COVID-19 Impact On E-commerce Companies

by Rashmi SharmaApril 22nd, 2020
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The COVID-19 pandemic is rapidly accelerating the transition to digital e-commerce. E-commerce brands across the industries are adapting to new changes to meet consumer’s needs. As more people are staying in their homes to slow the spread of the pandemic, there has been a drop-off in brick-and-mortar shopping. People are now changing their buying habits and are now more careful about what they’re buying, when, and how. People tend to buy risky and risky items because they have no control and try whatever they do to gain some control.

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As all of us are trying to fight against the fear of the COVID-19 pandemic, there has been a lot of talk in the e-commerce industry about the imbalance of meeting the demands of consumers for groceries and other essentials. Many families in America, India, and Europe are trying digital e-commerce services for the first time.

A report by Apptopia the mobile application tracking company states that the average daily downloads for popular digital e-commerce web apps such as Walmart, Instacart, and Shipt have surged since February.

COVID-19 Impact on Digital E-commerce

The COVID-19 pandemic is rapidly accelerating the transition to digital e-commerce. As people around the world are being asked to practice social distancing, households started to rely upon online stores for home delivery during the pandemic and they are likely to continue to use those services once it's over.

According to data from Rakuten Intelligence, the online orders volume from e-commerce merchants increases 210.1% between the period of March 12 to March 15. Even the e-commerce giant such as Amazon plans to hire more employees in their U.S based operations to deal with the demands of online consumers during the coronavirus pandemic. 

Changes in Revenue Across Industries Due to Covid-19

  • Source: Neilpatel.com

As more cities are going under lockdowns, customers are limiting their shopping experience for all the necessary essentials. E-commerce brands across the industries are adapting to new changes to meet consumer’s needs. As more people are staying in their homes to slow the spread of the pandemic, there has been a drop-off in brick-and-mortar shopping.

But, there would be an increase in online shopping as people are looking for online e-commerce stores to purchase the items they might have otherwise purchased in person. 

In reality, e-commerce sales in some industries are seeing a significant upsurge. This is especially true for online e-commerce stores selling household goods and groceries. I’ve gathered some facts and numbers around how consumer behaviors are changing during this lockdown period.

Effect On Consumers Online Shopping Behavior

The COVID-19 is a global pandemic and the situation is rapidly changing for consumers across the world. Shops, restaurants, bars, malls, and gyms in many major cities are shutting down. Meanwhile, many office workers are working remotely full time. People are isolating and this uncertainty is so huge that there are overnight changes to their shopping behaviors. From bulk-buying through online stores, people are now changing their buying habits and they’re now more careful about what they’re buying, when, and how.

Just like consumer behaviors are being impacted, in the same way, the effect of the COVID-19 outbreak on eCommerce is impacting different geographies. According to Morning Consult, the UK, Japan, and Germany consumers were experiencing reduced confidence when shopping for groceries and food items, while in the USA, consumer confidence was near an all-time high.

  • Image Source: Apptopia

These are some useful apps that have played a major role in facilitating consumers’ needs. To avoid the spread of the virus, people are spending more time indoors and on their mobile devices for shopping for goods and all essential items. In China, the number of phone usage during the outbreak went up from 6.1 hours a day to 7.3 hours. But it is a good way of tackling social distancing. 

Panic Buying is Also Impacting E-commerce Companies

  • Image Source: KJRH.com

People started stocking up things like hand sanitizer, masks, toilet papers, and other household essentials. This is what we call panic buying. Due to the surge in consumer demands the online stores are also struggling to keep up with demand. As a result, the price of essential items increased and became rampant. People are responding in different ways. In this uncertain and risky situation of which they have no control, people tend to buy and try whatever they can do to gain some control.

The global spread of COVID-19 has raised a lot of uncertainty and contradictory information that people are hearing from different sources and advice from multiple people. Panic buying is the result of the crowd mentality. Seeing what other people buying up validates the decision to stock up goods. It is like no one wants to be left behind in the race of buying up unnecessary items.

Product Categories Are Changing 

As people are buying products through online e-commerce stores based on COVID-19 new and local circumstances, the product categories are also changing. In a survey conducted by Nielsen they have identified major changes to consumer behavior tied to the COVID-19 pandemic. Here are they:

  • Proactive buying of health and wellness products.
  • Reactive health management products such as masks and hand sanitizers.
  • Groceries and household essentials for pantry preparation.
  • Products for the quarantine preparation.

As we progress through lock down stages, these items and the product categories will continue to change. While data also shows that shopping behaviors are also changing based on gender.

For example, survey data shows that women are more concerned about the effects of COVID-19 than men’s. In the same report, men were found to be shopping online and avoiding in-store experiences more than women. While e-commerce sales do not appear to be increasing, there are some exceptions in the future. 

Conclusion

E-commerce industry experts around the world have been trying to meet changing consumer behavior, but they are still not able to predict the exact consequences. I hope these effects will be temporary. With some of the most recent findings and insights, I hope that we can help e-commerce marketers to navigate through these tough times and best prepare to manage the challenges. For any questions, please reach out at Syncrasy Tech, a Global IT Solutions Company and PIM solution provider.