“eCommerce spending in the U.S. is up more than 30 percent from the beginning of March through mid-April compared with the same period last year… Many of the items showing the largest growth in dollars spent go beyond the essentials… There was a whopping 777 percent increase in book purchases, followed by 182 percent growth in the toys and games category and 131 percent growth among sports and outdoors items, which includes gym equipment. Home improvement (71 percent) and health and beauty (38 percent) products follow close behind.”
As the self-quarantines, stay-at-home orders and worries about public interactions carry on into the spring, eCommerce merchants are presented with substantial opportunities to thrive over the next several months and beyond.
With increasing swaths of consumers turning to online options as a means to procure goods and avoiding physical shopping environments, it is vital for business owners to adapt to the changing landscape to meet new market demands.
Here is what online retailers need to know about eCommerce and coronavirus.
A Change in Consumer Behaviors
With the substantial impact on daily patterns of living, there has also been a massive shift in online consumer behaviors. Moreover, two key areas have seen a dramatic change in recent weeks: products purchased and devices used.
Firstly, the types of products that consumers are buying online have seen a substantial change since the outbreak began. One of the more notable changes is thatonline grocery sales have surged. As is reported by Digital Commerce 360:
“A March 23-25 consumer survey [found that]…31 percent of U.S. households have used an online grocery delivery or pickup service during the past month. That percentage represents a total of about 39.5 million households. The number of households now ordering groceries online is up 145.3 percent… 43 percent of respondents said they are either extremely likely or very likely to stick with online grocery buying.”
Naturally, this trend is driven by people’s desire to avoid social hotspots such as supermarkets.
However, grocery items aren’t the only products seeing an uptick in sales. As mentioned earlier, categories like books, toys and games, beauty products and other product groups have become extremely popular in the last several weeks.
“One of the top sellers on Amazon in the last month has been board games and jigsaw puzzles… In addition to traditional entertainment such as family games, video games, TV and movies, people have also been gravitating toward crafting and baking to keep themselves busy… yeast has been surprisingly popular and selling out at stores because people have been making more bread at home. Other crafts include embroidery and knitting.”
At the same time,sales of L’Oreal beauty products are exploding with the brand reporting a 53 percent increase in worldwide sales, with a strong emphasis on hair dye.
Meanwhile, categories like jewelry and apparel are showing a decrease in sales volume.
As an unprecedented number of people are simultaneously stuck at home, the way in which shoppers access the internet is also shifting.
Whilethe importance of mobile optimization in 2020 has been stressed due to the platform’s digital dominance, it seems that consumers are beginning to step away from their mobile devices and dust off their desktop computers–at least for now.
“There has been a ‘massive spike in desktop usage’ as people around the world have started to work remotely since March 11 in the wake of the global coronavirus pandemic, NordVPN Teams said. Desktop use has grown by 91 percent in the last week.”
Similarly,a report from The New York Times on internet usage amid coronavirushas found that entertainment websites like YouTube, Netflix and Facebook have all seen spikes in usage. However, it appears that traffic to their phone apps has decreased while visits to their websites have grown, again highlighting the move to desktops and laptops.
With the changes to consumer behaviors covered, let’s go ahead and explore the challenges and changes COVID-19 presents to eCommerce retailers.
Challenges Ahead for eCommerce Retailers
While brick-and-mortar stores across the world are dealing with the seismic ramifications of the pandemic, eCommerce retailers have their own hardships with which to grapple.
As it stands, many of the hurdles facing merchants are supply chain and shipping related. The impacts of the shift of predominantly online shopping are already being seen as Amazon has experienced a considerable strain on its supply chain over the last several weeks.
However, while this has indeed impacted FBA merchants, Amazon is still prioritizing shipping on essential goods, claiming that: “We’re working with our selling partners to temporarily prioritize household staples, medical supplies and other high demand products coming into our fulfillment centers so we can more quickly receive, restock and ship these products to customers.”
The reason for these shortages, in addition to supply chain issues, is that when merchants place orders for products, they are anticipating the specific levels of demand. However, as has been widely reported, the number of online orders has skyrocketed. Moreover, the volume that consumers are seeking for many items has also increased substantially.
As a result of these factors, inventory shortages are likely to be a common occurrence over the course of the coronavirus crisis.
Longer Delivery Windows
With the increased demand that consumers have placed on digital retail outlets, ideas such as two-day shipping have–for the most part–gone out the window. Due to the unprecedented volume of online orders being placed, not even the likes of Amazon can keep pace with demand.
What this means is two things:
Consumers are still likely to convert on essential items, even if they have longer delivery windows
Shoppers are will often opt for the product which has the shortest delivery time frame
Given this dynamic, many are also likely to leave sites like Amazon in search of an independent retailer that can potentially get items to them quicker, as they could be less inundated than retail behemoths.
This has both pros and cons as standalone online stores can receive an influx of traffic and sales. However, at the same time, these operations can become bogged down quite quickly.
Therefore, it is incumbent upon sellers to establish a framework and logistics chain that will enable them to handle increased demand while also delivering products as promptly as possible.
On that note, let’s explore some of the ways that retailers can protect their business during the pandemic and prosper through the predicament.
How Retailers Should Proceed During COVID-19
While many retailers may not be sure how to approach a black swan event of this magnitude, there are a variety of steps that sellers can take to help fortify their business proceedings and continue to build trust and revenue throughout this time.
Some of those tactics include:
Be Thoughtful and Transparent
Unfortunately, there are a variety of brands that are currently capitalizing on fear, running tacky promotions, jacking their prices way up and engaging in other tasteless activities.
Do not take this approach.
Do not take this approach.
The bottom line is that interacting with consumers in this way not only alienates them and breeds mistrust, but it could also tank sales in the middle of the pandemic and continue on after things get back to normal.
Even if running a promotion where users can get a discount by using the code “Corona2020” might score some short-term sales, in the long run, the brand could be irreparably harmed.
Instead, sellers should aim to communicate empathy to their audience. This can be done by runningeCommerce email marketing campaigns that address consumer concerns about out-of-stock products, delivery delays and internal sanitation procedures that let customers know that their safety is valued and similar topics.
Diversify the Supply Chain
As noted earlier, supply chain issues are likely to be one of the biggest challenges facing eCommerce retailers during COVID-19. Therefore, it is critical for sellers to take steps to alleviate these issues before they become insurmountable.
It is vital that retailers, if or when possible, diversify their manufacturing and fulfillment locations as each can quickly become overwhelmed. On the manufacturing side of things, this can require some time as the length of the pandemic and sustained levels of demand are both ambiguous.
However, on the fulfillment side of things, retailers can achieve their goals much quicker.
The importance of proper supply chain management cannot be overstressed for retailers during this crucial period. Those who establish the most reliable and efficient system are those who are likely to gain the most.
Keep Running Ads
If sales are beginning to slump, many merchants will look for ways to cut costs. Often, advertising and marketing budgets will be one of the first items on the chopping block.
However, while it may seem counterintuitive, it is vital that sellers continue their advertising efforts. The fact is that when an economic downturn occurs, those who continue with their marketing efforts come out ahead in the long run.
That said, it may be wise to switch up advertising strategies and focus more on creating deeper connections with existing customers througheCommerce retargeting marketing. After all, most companies generate the bulk of their revenue from a small group of dedicated customers.
Given the massive uptick in internet traffic and eCommerce engagement, sellers cannot afford not to reach shoppers when they need them most. Moreover, if a merchant fails to continue getting in front of consumers with eCommerce adverts, the competition will gladly capitalize on their absence.
By engaging in content marketing, retailers are leveraging one of the most effective methodologies to enhance SEO performance. Moreover, since consumers are seeking out information that will allow them to spend their dollars most discerningly, retailers have a prime opportunity todrive revenue with content by comparing similar products to their own, showing the superiority of their goods.
As a result of the COVID-19 pandemic, the eCommerce landscape is rapidly changing. While some of the developments are undoubtedly good, others present retailers with real challenges.
For most brands, the line between success and failure will be determined by how merchants opt to respond to the events as they unfold.
Will sellers slash budgets, discontinue marketing efforts, hunker down and hope for the best? Or will they develop a proactive plan of attack that will allow them to shepherd their business through the storm and on to greener pastures?
In the end, those who take the latter approach are more likely to adapt to the situation, learn to succeed despite the challenges and grow their business as a result.
Ronald Dod is the Chief Marketing Officer and Co-founder of Visiture, an end-to-end eCommerce marketing agency focused on helping online merchants acquire more customers through the use of search engines, social media platforms, marketplaces, and their online storefronts. His passion is helping leading brands use data to make more effective decisions in order to drive new traffic and conversions.
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