How Is COVID-19 Shaping the Future of E-Commerce?
E-commerce is continuing to thrive, even amid unprecedented change
This is a challenging time for all businesses, including online businesses. Fortunately, there’s a light at the end of the tunnel amid this global health and economic crisis.
We’ve seen a lot of changes in online and offline shopping behaviors over the past few months. At the onset of the crisis, “panic buying” was commonplace. This quickly evolved into a general fear about the safety of products passing from one person to another.
Through all of this, one thing has remained true: people still need to shop. They have looked to e-commerce to do this. The only difference is that shopping priorities have had to change. Here, we’ll take a closer look at how e-commerce is evolving in the face of COVID-19.
People are shopping online more than ever before
People are flocking to e-commerce in droves. In mid-April 2020, average e-commerce revenues and total e-commerce orders were up 37% and 54%, respectively. In the U.S. and Canada, during roughly the same time period, there was 129% growth in e-commerce orders and 146% growth in all online retail orders.
SOURCE: COVID-19 COMMERCE INSIGHT, AN EMARSYS INITIATIVE IN COOPERATION WITH GOODDATA
This map illustrates how pure play e-commerce and retailers (online activity) are performing in the last 7 days compared to the same period last year (pre-COVID19 outbreak). For example, the growth rate shown on the map for U.K is calculated in the following way: orders in the last 7 days divided by the orders in the same period last year.
Stay-at-home orders have had a lot to do with this. And this has allowed e-commerce to command a lot more attention. Perhaps this is because people have had no choice but to shift their shopping habits online. Or because they now have more time on their hands to browse. Either way, e-commerce is where people are shopping right now.
“Always on” connectivity plays a role in this, too. In April, over 72% of consumers shopped via a mobile device. A little over 53% of them completed their purchases via mobile as well.
While it may be easy to jump to the conclusion that e-commerce is suddenly “booming” amid the COVID-19 pandemic, it’s important to remember that e-commerce is also one of the few places still “open for business.” Aside from grocery stores, pharmacies, and a growing list of essential businesses, until recently, many consumers haven’t had many options to choose from. For many, shopping online is still very much the new normal.
How this will change as countries begin to relax their stay-at-home orders is yet to be seen. We might see e-commerce return to pre-pandemic levels for some industries and sectors. Others could still see growth as the health crisis carries on. For businesses that have always sold their goods and services online, there may be no discernable change at all. It’s still too soon to tell what the potential long-term shift in shopping behaviors may be.
E-commerce growth isn’t created equal
Even amid all this uncertainty there’s a good chance that e-commerce-first shopping habits will become a new norm for millions of consumers around the world.
Just because e-commerce seems to be “booming” doesn’t mean we’re in the clear: consumer spending is down in 2020.
That millions of people around the world have either lost their jobs or been put on temporary leave helps explain this recent trend. As people become more cautious about spending habits in the absence of a secure income, it’s easy to see why e-commerce sales have skyrocketed in certain “essential” product categories—like disposable gloves, canned goods, and weights—while others have steadily declined.
SOURCE: STACKLINE, AMAZON, BUSINESS INSIDER, EURO NEWS, CNBC.
Similarly, to understand how different industries are faring, Klaviyo has built an interactive e-commerce sales trends dashboard to compare year-over-year e-commerce sales across a variety of industries. Despite the noticeable growth across all categories, some are clearly getting a bigger boost as a result of people being stuck at home.
E-commerce will continue to thrive in a post-covid-19 world
As the COVID-19 pandemic seemingly caused the world to shut down overnight, e-commerce became how consumers could get what they needed to survive. It’s also what has kept different facets of the global economy running.
For this reason, it’s safe to assume that the longer this crisis continues, the shift towards online shopping will become more habitual—even as economies begin to reopen.
Alex Timlin, Senior Vice President of Verticals at Emarsys, encourages taking a step back:
“Consumers are still spending in many areas, but the news on TV and online right now is so alarming that most business owners would be forgiven for thinking that consumer confidence has collapsed altogether and that they need to make drastic decisions to protect their business. Before making those decisions, I would implore those business owners to arm themselves with the right contextual information about consumer spending and behavior. Then you can make the right decisions to mitigate the damage of COVID-19, and navigate the uncertain times ahead a little more easily.”
This may sound like a lot of cautious optimism. However, there’s a good chance that e-commerce businesses will have an easier time bouncing back than other business sectors.
Even more, by working with a partner like Nexway, you can take important steps now to ensure your online business is prepared to thrive in the future. With Nexway by your side, your business can adapt, thrive, and grow. Contact us today for a demo.
The Nexway Team