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Understanding The Pandemic Influence On eCommerce Industry
The global pandemic is nothing new for us now; and it is impacting the lives of people across 150+ countries. It’s nothing wrong to say that it is a defining event of 2020 and 2021; which will have an impact on how businesses work and people`s lifestyle for years to come.
I think, we all can agree that the coronavirus has hit us hard. Yes! Some have suffered more than others but we all got our unique stories. Due to safety precautions or measures like curfew, lockdown and quarantine taken by various governments, small to medium-sized businesses have severely impacted. The restrictions deemed to be safe to gather in a public gathering has reduced from thousands to hundreds and now to tens. In addition, several companies across industries are shutting down. Its devastating and a nightmare for companies headquartered in India, Brazil and the United States to cope with the uncertainty in the ecosystem. In April 2020, the International Trade Center (ITC) conducted a study to measure the impact of COVID-19 on small and medium businesses across the globe.
We can see from the above graph that vast majority of businesses are affected, and interviewed managers have reported significant drop in their revenue. While majority is impacted, the intensity and nature differ by firm size. The effect on micro and small businesses is much more than medium and large scale companies. Indeed small businesses are vulnerable due to shortage of assets and poor liquidity cushion.
Lets pick one industry i.e. ecommerce and analyze the impact of this pandemic.
eCommerce Industry Performance During Covid-19
While it’s a challenging time for many industries, it’s a boom for the ecommerce industry. It has grown like never before. According to a study conducted by SearchNode, 90% of the companies experienced an increase in their sales atleast by a bit, with 50% claiming it grew by 100%. While this was during the lockdown, 86% of the companies saw an increased in their revenue after lockdown. So, below is a graph that illustrates the impact prior and after Covid-19 lockdown in 2020.
“The novel coronavirus has provided customers with access to a significant variety of products from the convenience and safety of their homes, and has enabled firms to continue operation in spite of contact restrictions and other confinement measures”- Oecd.org
Having said this, ecommerce companies cant take things at breeze as there has been few shifts that’s essential to understand.
Understanding Your Audience
Perceiving and reacting to this crisis situation hasn’t been universal across generations. You will be surprised to know that 96% of Gen Z and Millennials have become much more conservative in their spending, drastic negative change in their buying pattern and long term thinking has increased. On the other hand, Gen X and Baby Boomers are far more less concerned about the situation and not letting their shopping habits influence due to the pandemic. Apart from this, gender has also played a key role in shopping pattern. 33% male compared to 25% women reported the pandemic has affected their essential shopping behavior and men have taken advantage of “buy online, pick up in store” approach to cover their needs.
While people are spending an average of 10-30% more on online shopping, ecommerce company will need to tailor their marketing strategies to exploit the full market potential and reduce negative consequences on their revenue. One must be very careful on how the brand is positioned during the pandemic.
Understanding Your Product Market
Its very obvious that essential products like medical and grocery ecommerce shopping getting soared compared to others. Assorted grocery shopping saw its peak (250% increase) last march compared to 45% for all other products in the same period.
If your ecommerce business is into selling jewelry, fashion, apparel, bags, travel and sports fitness products, then these have been heavily impacted as per a study by Common Thread. So, promoting those the right way at the right time is a key factor to achieve a partial success. In recent times, customers are getting more inclined towards offers, discounts and incentives. 90% of customers say “free shipping” is a top incentive and 73% of top online retailers are constantly running sales during the pandemic situation to keep up their market presence. So, a combination of your strengths, market behavior and buying patterns of customers the business strategy has to be restructured to thrive in the current situation.
Understanding Your Competition
Online ecommerce competition has got intensified as several niche players have emerged and offering compelling programs to attract potential customers. Mid to large ecommerce players are now struggling to retain their newly acquired customers through loyalty programs, promotions, subscription models and by increasing their product ranges. If you are a small or medium ecommerce company, strengthening your customer base is critical. You will have to provide your customers with simple and human centric UX design to create delightful shopping experience across various devices. Multiple initiatives mentioned above, should be tied to maximize the product adoption and beat your competition. Leverage technological innovations like AI, Augmented Reality and voice search to deliver more personalized results.
1 Stop Solution
If you are stressed out about these shifts and market changes due to the pandemic, BAM!! you have a solution. TurtlesEgg.com is a new socially responsible multivendor marketplace comprised of small, medium and large business owners. They provide a low cost, easy to use sustainable platform that cares equally about their customers and sellers. Their specialized experienced team understands all the challenges and enable you as a small to medium business reach your goals effectively and efficiently. You can connect with various other members in the platform and build your network. Hop on to the platform and check it yourself. Are you going to ask the benefits??
- Customizable microsite of your own
- All in one vendor managed dashboard
- Low commissions and quick payouts
Wishing a safe and quick recover to all business owners, especially small and local businesses that are the heart and soul of communities across the United States.
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