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How Online Consumer Behavior Is Adapting to COVID-19

eCommerce
Nathalie Nilsson eCommerce business analyst and author
| 7 min read
Change in online consumer behavior caused by pandemic
Change in online consumer behavior caused by pandemic

A lot has changed in a very short period of time since COVID-19 made its appearance. A number of businesses are struggling as consumer buying behavior changes in response to the pandemic. Others cannot seem to produce enough of their product to satisfy the sudden spike in demand. More and more customers choose to shop online, and online consumer behavior has changed accordingly.

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How has eCommerce customers’ behavior changed?

Everyone who can is encouraged to stay at home to reduce the spread of the virus. However, people still shop – they just take their business online. In fact, Amazon has seen a 30% increase in sales compared to what is typical this time of the year.

Yet online consumer behavior has also changed. People are buying products that they would not typically purchase online. It is not just hand sanitizer and toilet paper either. Purchase decisions are made with adaptation to quarantine in mind. This has resulted in a noticeable increase in the sale of kitchen utensils and home exercise equipment. Additionally, the interest in luxury goods have dropped, while a lot of low-cost goods are seeing increased sales. These low-cost goods are also bought in bulk at a far greater rate than before.

As people spend more time at home, entertainment providers are in high demand. Judging by January and February, Netflix subscribers in North America are expected to increase at twice the previously estimated rate in 2020.

People who previously have been reluctant to even consider shopping online suddenly find themselves in a situation where it is the sensible option. This means that it is vital that your eCommerce website provides a smooth and easy shopping experience. It will no doubt influence the future purchase decisions of these new customers, encouraging them to return even after the pandemic has passed.

How does this affect eCommerce merchants?

These changes in consumer buying behavior are going to affect you differently depending on what you are selling. If your online business provides hygiene articles, grocery deliveries, or home exercise equipment you can expect to do well. The one thing that may hold you back is your supply chain.

However, these sudden changes in online consumer behavior may cause some eCommerce merchants to struggle. In China, platforms such as Alibaba have chosen to waive commission rates for this reason. This will no doubt help many throughout the crisis. Hopefully, we will see more eCommerce platforms follow suit.

Another aspect of eCommerce that the coronavirus is changing is marketing. As people stay quarantined, billboard ads and the like are going to be less effective. Your ads need to be where your customers are. Today, that means online.

Despite this, China has seen a decrease in ad spending, including digital ads. The likely cause for this is uncertainty in regard to the supply chain. The pandemic has resulted in both a sudden rise in demand and unexpected supply chain complications for many businesses. As such, merchants are hesitant to pay for ads that attract customers they might not be able to deliver goods to.

Adapting to COVID-19

As online consumer behavior changes so too must your business. The drop in foot traffic is likely going to accelerate the digital transformation of brick-and-mortar stores. Some may even downsize their physical locations and explore showrooming.

For some companies, such as grocery delivery services, the primary change required might be expanding where you are willing to deliver. The countryside is often neglected and frequently inhabited by the elderly, who are in the greatest need of home deliveries now.  

We are also seeing businesses changing gears altogether. Absolut Vodka are making hand sanitizer, IKEA are providing hospital beds, and car manufacturers are rushing to produce ventilators. These initiatives will hopefully provide much needed resources to fight the coronavirus while also preventing layoffs.

Take a moment and consider if your company can do anything to help. For example, apparel sales are falling, but there is a huge demand for protective clothing for hospital staff. How you handle the crisis will be remembered in the post-corona world. If you can, take this opportunity to help and reduce the damage COVID-19 does.

Forbytes are happy to offer our services at zero business profit to anyone who is working to combat the coronavirus.

Lasting changes in online consumer behavior

The pandemic will pass and life will return to normal, but some of the behavior that we adopt during this period will remain.

Older generations that previously have been hesitant to shop online are being introduced to the concept. The effect of this increase in customers will no doubt already be seen during the holiday shopping period at the end of the year.

The coronavirus has led to a lot of jobs being done remotely, which might be advantageous in the long run. More than 25% are expected to continue doing their job from home multiple days a week, even after the crisis is over. This normalisation of working from home will open up doors for the disabled and chronically ill and improve their opportunities to earn a living. Not only will this lead to an improved quality of life for those affected, but also more money in circulation – especially online.

Entertainment and culture were quick to go digital once events were cancelled. This period of social distancing and quarantines is an excellent opportunity to test new ways to deliver entertainment to the public. There may very well be a market for a Netflix for Broadway shows. Similarly, museums and organizations like the National Trust could have a lot to gain from providing a high-quality digital experience of their historic collections and locations.

And the grocery delivery market? It is booming – JD.com sales were up 215% in China by mid-February. This growth rate is going to fall as people return to grocery stores. However, there are going to be lasting changes in consumer buying behavior when it comes to food. A lot of people are going to get a taste for getting fresh food delivered to their doorstep. Between the convenience and a renewed interest in cooking, the grocery delivery business can expect to come out of this stronger than ever.

Working, shopping, and enjoying entertainment online will not replace our old way of life. People will still want to go to the store, to the office, to a concert. But this time of social distancing is going to make the digital alternative a more appealing option in the post-corona world.

At the end of the day, we are all in this together. As a purely digital business Forbytes can continue to reliably provide our services to our client-partners. If you have questions on how we can help your business endure or even thrive, please get in touch. Your success is our success.

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