Impact Of COVID-19 on eCommerce

impact of COVID-19 on ecommerce

The Covid-19 pandemic as we know it changed our world in 2020. We had to rely on social distancing and reduced or complete halting of social activities, etc. eCommerce has changed a lot since the pandemic as consumers have developed a new shopping habit that is more digitally inclined.

However, the new shopping behaviors we developed to cope with the Covid outbreak have stuck with us since then. These new and digital shopping habits will remain present in the post-Covid era we are in currently.

How have things changed from then on, several months after Covid-19 reshaped our lives?

The Covid-19 pandemic has influenced the digital economy globally. People had to embrace social distancing during the pandemic, so they turned to online shopping more than ever. Up to 67% of consumers reported having to shop differently from their usual and traditional shopping styles because of the pandemic.

Retailers have had to upgrade and provide the best platforms to ensure consumers can shop seamlessly online.

Product Category Expansion

The grocery eCommerce sector boomed very early into the pandemic in 2020. Analysts at Mckinsey reported that grocery eCommerce in North America grew by three to five times in just a few months.

Mckinsey’s report showed that:

  • About 20% to 30% of businesses operated online during the pandemic.
  • Grocery eCommerce penetration had reached 9-12% by the end of 2020.

Several other product categories expanded significantly. The sales of home and fitness products boomed resulting in a 5.7% growth in the home gym and household goods sector. The spending on recreational goods also grew by over 18% due to Covid-19.

Lower Brand Loyalty

Brand loyalty has changed from what it used to be before the pandemic. Consumer loyalty to their favorite brands has dropped. In mid-2021, more than 80% of consumers said they had to buy a brand that is different from their usual brands. This trend started early in the pandemic and has continued into the post-Covid era. Now, about 65% of consumers change brands because they want lower prices while 51% change brands because the product they want is out of stock.

Contactless Payment Options

During the pandemic, we adopted contactless payment options for our everyday transactions. Online purchases have replaced many in-person purchases. This is why many retail outlets and eCommerce stores made big strides to improve their online payment options during the pandemic.

In 2020, over 1.18 billion people used proximity mobile payments globally making up a 22.2% increase from the 2019 figures. This number is expected to go up in the coming years.

Covid Friendly Environments

During the pandemic, sellers offered some of the best Covid-friendly shopping options for shoppers. Some shoppers switched completely to eCommerce, while others used more covid adapted delivery and pick-up options from their traditional brick-and-mortar stores. Most stores started accepting online payments, while delivery service providers like Instacart partnered with retail stores to deliver goods to consumers. Food delivery companies like Uber Eats and DoorDash expanded their delivery options to include grocery product delivery.

Curbside pick-up became more popular in restaurants and brick-and-mortar stores which served as a covid friendly option for consumers to pick up their purchases promptly.

Social Media shopping

Social media shopping became more rampant during the pandemic as social media platforms added more eCommerce features to enable shoppers to shop easily on social media platforms. Many eCommerce companies have since integrated their online stores with their social media accounts allowing eCommerce brands to promote their products easily across various platforms. As of 2020, social commerce held up to 3.4% of total eCommerce sales globally. This percentage is expected and has continued to increase since then.

Millennials and Gen Z consumers believe that social media platforms are the best places to learn about new products compared to online searches.

How Has The Covid-19 Pandemic Changed Consumer Behaviour And Supply Chains?

Our shopping habits changed remarkably during the pandemic. The consumers in areas that had a high Covid-19 case had to switch to online shopping and the need for home delivery. This habit has not changed so much back to what it was before Covid. Some consumers still intend to continue their daily lives while having reduced contact even when they shop. Omnichannel and online shopping will continue to thrive in the retail sector.

These covid influenced changes are not only seen on the consumer side but transcend to suppliers. There have also been remarkable changes in supply chain activities, and suppliers have adopted digital technology.

Omnichannel Commerce Will Dominate Post-Covid Commerce

The world switched from traditional commerce to eCommerce in 2020, but will it continue?

eCommerce will keep growing to reach double digits in 2023. eCommerce sales will reach $6.169 trillion globally by 2023 which will make up to 22.3% of total global retail sales, coming from $3.351 trillion and 13.8% of the global retail sales for 2019. This upward movement will continue reaching $7.385 trillion and 24.5% of global retail sales by 2025.

As eCommerce is growing and becoming more popular, we expect omnichannel commerce to be more dominant in the coming years.

Moving forward, we won’t have to choose between online sales or brick-and-mortar. Countries have lifted the Covid lockdowns that were active during the pandemic globally, foot traffic is back to normal, and most other activities have also resumed. eCommerce retailers and supply brands will now combine various commerce channels to provide a compelling shopping experience for their customers.

In 2022, all of the lockdowns that were so rampant in 2020 have long been lifted globally. Gyms, restaurants, movie theatres, and other sectors have reopened, and business has been active in these different sectors. Most in-person stores are up and running as well, but facing staff shortages, and so on. Some employees have left their jobs either because of the virus or for a more remote job. Most companies now rely on combining eCommerce with their business operations.

People can now visit their traditional in-person stores to go about their retail purchases. The takeaway is that retail companies will continue to allow curbside as well as other shopping options that were popular during the pandemic.

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