Like all other facets, the global COVID-19 pandemic has also altered online buyer behaviour. Market experts are facing a hard time predicting which products will sell, which will not and which will almost certainly occupy empty shelf space for some time to come. In many ways, this pandemic may have changed e-commerce forever.
Most of the world was under quarantine and self-isolation in the months of March through May. Vast swathes are still under lockdown. From a market analyst’s perspective, they should have continued to behave in the same manner as they had before.
But that was not how it was. Some consumers were panicking and started bulk-buying. Some only ordered bare essentials. Some stayed away entirely from the online world and flocked to their neighbourhood brick-and-mortar stores. This last section usually included people who lived in urban areas.
Overall, there were, and still are, various factors at play, most of which are completely novel. These factors have continued to flummox market and E-commerce experts, who are at a loss on how to predict the future.
Key Insights Gleaned
Some statistics should shed light on what happened in the e-commerce realm during the stay-at-home months.
- Online retailers in the US had a field day as YoY revenue grew by over 60%. This surpassed the previously reached peak of 49% growth seen in January 2020.
- A report by Forbes emphasised that in April alone, there had been 146% growth in orders placed online across sectors.
- A study by Adobe  highlighted how BOPIS (Buy Online, Pickup-in-Store) orders had leapfrogged by over 200% in April 2020 when compared against April 2019. This was a direct result of people trying to avoid spending too much time inside a store fearing that they would contract the corona virus.
These reports prove one thing: in the developed world, e-commerce companies are making hay while the sun shines. Still, there are some last-mile delivery problems which are being ironed out as you read this.
Generation and Gender Gaps in E-Commerce Purchasing Habits
Surprisingly, there has been a noticeable shift in generational purchasing habits. Several surveys indicate that millennials and Gen Z-ers are rapidly changing their buying behaviour. One such survey, held in the United States and across Europe, suggested that more than 90% of this demographic was spending lower amounts than they were in February.
Ironically, this was the same demographic which has been the mainstay of the e-commerce industry over the last decade. If this trend continues and concretises, many online retailers will have to alter their business and PR strategies.
Of the Baby Boomers and Gen X-ers, there was a significantly lesser change in purchasing habits. That does not mean that they were not worried about this virus, though. A simple explanation could be that they were more pragmatic.
Additionally, there have been interesting changes in how men and women use e-commerce. A slightly controversial study suggests that women worry more about this pathogen. But men are more likely to change their purchasing patterns.
In all fairness, there is no one-size-fits-all survey which will answer every query we have about how corona virus will affect e-commerce. There are too few respondents, and thus there is a paucity of data.
Which Products and Sectors Have Been Affected?
Some sectors have performed better than others. For the first time in a decade, consumer electronics faced a steep rise in prices. This inflation was totally unexpected. Sales of computers, television sets, smart speakers and devices and other white goods have increased by more than 50%.
It is but natural, in hindsight, that sales of these goods took off. Most people were working from home, which necessitated purchasing computers. Post-work entertainment meant that more TVs were required.
Grocery e-commerce touched hitherto unthinkable peaks. After March’s second week, groceries in brick-and-mortar stores started vanishing. People turned to online stores. One survey showed how groceries easily outsold almost every other perishable product.
Huge spikes in the sales of medical products, baby food, sanitising and cleaning chemicals, besides toys and games and health and fitness sectors were observed. These are also the sectors which will likely remain in the limelight for at least one more year.
These were sectors which were affected positively. Other niches faced gloomy situations. Gems and jewellery, luxury items, make-up products and auto and tools sectors took a beating. Record sales lows were set in travel and tourism-related products.
These sectors are unlikely to face sunny times very soon. Since major economies in Europe are contracting, contracting- Germany’s economy Germany’s economy contracted by 2.2% in May-demand for high-end and non-essential goods are expected to plunge even lower.
What Will the Future of E-Commerce Be?
That is the multi-million-dollar question. First, there is a huge chance that demand forces will outstrip supply lines once most countries lift their respective lockdowns. There is likely to be major chaos across most e-commerce platforms since people will clamour to purchase those items which they have been deprived of. However, e-commerce will have supply chain issues too.
The United States and China are currently locked in a war of words on how the virus originated. President Trump has been blaming China’s wet markets squarely. The White House has not issued any formal statement on this issue. China has retaliated, claiming that these rumours are malicious and unsubstantiated.
With this background, and given that China is by far the largest supplier to the global e-commerce ecosystem, it is not too difficult to acknowledge that supply chain management drills will have to be updated almost daily.
President John F. Kennedy had once commented on how ‘crisis’, which when inscribed in the Chinese language has two characters, could mean both ‘opportunity’ and ‘danger’.
Perhaps e-commerce giants could take a lesson or two from this aphorism. E-commerce models were fraying at the edges by end-2019. It was time to adopt more agile practices. It was also time to rethink global strategies, including the ‘buy-local-sell-local’ concept.
Perhaps this pandemic has unintentionally pushed these reforms on to the fast track.