How Coronavirus Affects the E-Commerce Industry

Social distancing and quarantines have become the main tools to slow down the spread of COVID-19. This has had an undeniable effect on brick-and-mortar stores, but the coronavirus affects e-commerce too.

Quarantines boost the eCommerce industry

Getting your purchases delivered to your door, or to a nearby location where you can quickly pick them up and leave, is not only convenient. Today, it is also safer. It means less time wandering around a store, trying to find the goods you are looking for. It also results in fewer people out and about. This makes it a go-to option for many during this pandemic, especially in countries that close non-essential businesses and restrict the population’s movements.

In Italy, which is one of the hardest-hit countries in the world, it is evident that the coronavirus affects e-commerce. When the first region was quarantined on February 21^st, e-commerce activity was already higher than usual. The following day, online sales were 101.5% higher than they had been at the same time the previous year. During the next two weeks, the e-commerce industry saw a consistent improvement in sales. Just before the nationwide quarantine on March 9th, sales were up by 113.7%.

The data shows that Italians have been quick to turn to the e-commerce industry in their time of need. In fact, e-commerce is expected to see the biggest increase in revenue of all industries in Italy due to the coronavirus. What’s more, the longer the crisis lasts, the better e-commerce is expected to perform.

The difference between the eCommerce sectors

The coronavirus affects the e-commerce industry as a whole, but it does not affect the different sectors in the same way. While some experience significant increases in conversions, others have seen a disheartening drop in sales.

The French e-commerce industry has seen drastic changes in traffic rates due to the pandemic. Travel and tourism, luxury items, and fashion have been hit hard, while general retailers and media are seeing their traffic skyrocket.

Unfortunately, many industries see both a drop in traffic and conversions. However, it is important to note that lower traffic does not necessarily mean that sales are down. For example, the French cosmetics industry saw a significant drop in online traffic but a huge increase in conversion rate during the 16^th and 22^nd of March. The result? A 4.77% increase in conversions.

Travel and tourism are likely to continue to see significant losses as people try to limit the spread of the coronavirus. However, it is too early to say if the same will be true for other e-commerce sectors. It is possible that many of the drastic drops in traffic and sales are merely due to the initial uncertainty among customers.

Regional differences

While e-commerce is already widely embraced, there still is plenty of room for even the largest markets to grow. And they are likely to grow in the coming months as the coronavirus affects e-commerce both directly and indirectly.

People are changing how they live their lives to help stop COVID-19 from spreading. Many of these changes also help build a solid foundation for e-commerce to become the preferred shopping alternative.

 

Interest in e-commerce has already increased, though there are noticeable differences between countries. As people stay at home and continue to avoid going to restaurants and shops, they are going to turn to e-commerce more frequently.

But why are the Chinese and Americans more inclined to turn to e-commerce than the Europeans?

The answer is likely not just the sheer number of people who are already keen online shoppers. It may lie in how the coronavirus affects e-commerce companies via the supply chain. Materials, factories, and transportation are all likely to be affected to some degree.

Of course, if your customer ends up worrying when, or even if, the product they have ordered will arrive, they will be less inclined to buy from you again. No surprise then that 77% of German e-commerce businesses worry about delivery delays or restocking cancellations. This fear is not unfounded, as more than half have already experienced such issues. Compare this to the US, where only 44% expect production delays.

A growing market

According to one study, 37% of US customers expect that they will shop more online due to COVID-19. Younger generations, in particular, express an interest in increasing their online shopping. Moreover, 31% of people aged 55-64 and 65+ are favorable to turning to e-commerce for their purchases. This is excellent news as these groups are typically less inclined to shop online and also more vulnerable to the coronavirus.

In a different study, made two weeks earlier, only 23% of US customers saw themselves taking their shopping online. This discrepancy may be due to the studies’ small sample size. However, it is also possible that it indicates a change in attitude as the severity of the pandemic has had time to sink in.

 

In the same study, half of the respondents in Vietnam, India, and China expressed an interest in increasing their online shopping. In Italy and Japan, 75% are already regular e-commerce customers or intend to make purchases online more frequently. Germany appears to be an anomaly, where 12% expect to increase their online shopping, but 15% expect to do less of it. This may be related to the previously mentioned, already noticeable issues with delivery delays in Germany.

The importance of good service

With the sudden increase in traffic, some e-commerce websites struggle. In the UK, online takeaway and grocery stores have been particularly ill-equipped to handle the influx of customers.

If a customer cannot complete their purchase on your e-commerce website, they are likely to abandon your store in favor of a competitor. However, the frequency with which online stores are overwhelmed can lead to shoppers giving up on buying their food online altogether. This will lead to more foot traffic in physical stores and an increased risk of exposure to Covid-19. Consequently, it is in everyone’s best interest that your ecommerce store can provide a smooth shopping experience even under high traffic.

As the status of the e-commerce industry changes from a convenient alternative to a way to prevent the spread of a pandemic, one thing is clear. If you don’t already have an e-commerce website, this is certainly the time to invest in one. Should you already have an online store, you must ensure that it is both easy to use and reliable under pressure. If you need help with this, get in touch with us — we are more than happy to assist.