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How has Covid Impacted Ecommerce?

Summer Nguyen | 06-02-2020

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It is safe to say that COVID 19 has proved to be a huge turning event for businesses, small and large alike. Regardless of whether the impact has been big or small, the fact that changes are happening across all business domains is mostly certain.

With grave concerns rising in terms of health and wellness of the population, lockdowns and social distancing being the new normal, economies have been experiencing the brunt of it all. Maintaining business stability in unprecedented times like these is a task that needs to be taken care of now and strategized well for any similar future instances.

How has the COVID outbreak disrupted businesses and eventually economies?

As the first obvious step to deal with the coronavirus outbreak for many countries was effecting a nationwide lockdown, businesses suffered majorly leaving a dent in economies. With social distancing and confinement to homes becoming imperative citizens across the world were allowed minimum to no movement. Restrictions to stay indoors not just shut down workplaces but ended up impacting the economy as a whole so much so that the International Monetary Fund (IMF) predicts a shrinkage of over 3% this year.

Where the extent of impact varies from one sector to the other there are some that have been hit the most. Oil and natural gas, aviation, food and beverages, automobiles, industrial metals are amongst the worst hit industries. Economies such as the US, Japan, the UK, Germany, France, Italy and Spain are expected to contract this year by 5.9, 5.2, 6.5, 7, 7.2, 9.1 and 8 percent respectively.

It’s time for businesses to analyze the impact and move ahead with a robust strategy to minimize the adverse effects of the impact. Customers’ preferences, priorities and as a result, their purchase patterns all are expected to change. The businesses that will be successful in understanding and predicting the upcoming changes and create plans to overcome them will be the ones that will move positively on the success graph.

Shift towards online means of carrying out businesses

With restricted movement allowed people are preferring to shop online, giving health and hygiene its due priority. Retail stores and outlets have shut down due to nationwide lockdown being observed in many countries, thus opening doors for online shopping ventures. Requiring brands to create a stronger digital presence.

covid impacted ecommerce
US store visit conversion drop 90% as Covis shuts down business

With the situation changing rapidly it has become imperative for customers and businesses to adapt at a fast pace.

In the coming times, people will tend to opt for online mode of shopping more and more making it almost mandatory for every business to have a digital presence. The foundation for which has been already laid with the shopping patterns observed in the past few months. Online shopping has been preferred largely by customers owing to a rise in the traffic on eCommerce giants’ websites.

If we simply consider the sale of consumer packaged goods (CPG), in the US for the two weeks ended March 21, 2020 increased by $8,5 billion (both online and offline). The below graph depicts the striking difference between the sales generated through offline and online media.

covid impacted ecommerce
Image source:Source:

The positive side - Businesses growing amidst crisis

COVID19 has without an iota of doubt proved to be a really unfortunate phrase for people around the world. The havoc was detrimental both in terms of health concerns and economic crisis. But certain businesses grew steadily and even exponentially during this time. Let’s figure the industries that continued to flourish in such times and will proceed to rise positively on the graph of growth.

Health and Fitness

  • Amidst the COVID outbreak, fitness brands that already had a digital presence found themselves on the positive side of the sphere since they were able to provide remote fitness to their customers. A good eg. of which is Peloton, the app of which saw a fivefold increase in download during March as compared to the data in February.
  • There has been a rise in download of other at-home fitness apps like Nike Training Club and Aaptiv.
  • Health and Fitness apps have set a new record for the maximum number of weekly downloads (59 million) as well as consumer spends ($36 million) in a week in March 2020.
covid impacted ecommerce

Online Grocery Delivery Business

  • Online grocery delivery marketplaces are experiencing huge growth.
  • Almost 31% of households in the US have made use of online grocery delivery websites amidst the COVID crisis during the past month. A good majority of 26% were also first-time users of any grocery delivery app or website.
  • In a survey conducted during March 2020, 43% of customers expressed their likeliness to continue with online grocery shopping in the future as well. Additionally, the total number of online orders placed for delivery or pickup increased by a whopping 193% as compared to the data in August the previous year(2019)
  • In the year 2020, Statista recorded 22.5 million users of the online grocery delivery business model in the UK which is an increase of almost 9.8% from the previous year in the same time period.
how has covid affected ecommerce
Image Source:

Online Alcohol Delivery Business

  • The American information, data and measurement firm Nielsen recorded an increase of 441% in online alcohol sales and 387% in the first fortnight of April.
  • Neilsen states that sales of wine, beer and spirits increased by 28%, 14% and 26% respectively, in a week in March when compared to the same time period in the previous year.
  • On demand alcohol delivery marketplaces such as Drizly are observing a rise in sales like never before. The sales rise has been specifically noted from the beginning of March, with Drizly recording a 550% increase in sales by the end of the first week of April.

Digital Streaming

  • With more and more people staying indoors a notable shift is being observed in the rise of digital content on various platforms ( a minimum of 20% across all platforms ).
how has covid affected ecommerce
  • Statista states the revenue in the Video Streaming Segment to have accounted for $27,628m in 2020.
  • User penetration which is 16.2% in 2002 is expected to rise to 18.1 5 by 2024.
  • Streaming boxes and sticks combined made up for 56% of OTT streaming time in the month of March 2020.

Cashless Payments

  • COVID outbreak has impacted the growth of several businesses, cashless payment is one among them.
  • With cashless payment platforms providing an alternative to dealing with cash, which may pose a threat during the pandemic, such platforms are gaining popularity.
  • Statista estimated that digital payment transactions will amount to US$4,769,370m in 2020 demonstrating a year on year growth of 15%.

Consumer Behaviour Change due to the pandemic

COVID 19 is most certainly going to be the reason behind changing consumer behavior if not permanently then definitely for a very long time, to say the least.

  • These changes and how brands prepare to deal with them will impact the industry in the times to come.
  • People now are not much likely to indulge themselves in impulse buying. Rather the focus would be more on acquiring products to meet basic daily needs, health and hygiene products, cleaning essentials and products with a longer shelf life.
  • Nonessential item categories will take the brunt for changing shopping patterns for some time. Mindful shopping will be on the rise with impulse buying taking a backseat.
  • Customers will be more thoughtful when it comes to purchases and the behavior would be inclined towards spending more consciously and avoiding wastage of any kind.
  • Additionally, local products would be the new favorite. Customers would be more inclined towards supporting the local community in substantial ways.
how has covid affected ecommerce
How has Covid changed the consumer behavior?

Ecommerce beyond COVID crisis

Lots will change for numerous industries post the pandemic. As the customers will learn to adapt to the changing times, so will the brands evolve to deliver. You as an eCommerce business owner might need to evolve your business strategy considering the prevailing scenario.

Understanding the customer behavior change basis of the industry you’re dealing in might require an in-depth study. Only this understanding can lead you to create solutions that best fit your customers’ needs and align with the larger goal of your business. The focus should be to achieve maximum organizational agility in order to be as efficient as possible in the times to come.

Ask yourself,

  • How quickly can you deliver a said product?
  • To what extent can you ensure contactless delivery and cashless transactions?
  • How equipped is your customer support to deal with grievances?
  • You might need to focus on just having a stable business right now but the future will require you to evolve. Analyzing and understanding in detail the changing customer demands, the changes in supply chain and above all ensuring quality would be the priority.

If you are an entrepreneur aiming to create an online marketplace platform, the choices are going to many. With almost every industry leaving no stone unturned to make their presence felt online there is not going to be a dearth of ideas to work on. A good, path breaking idea and you will be good to go. With a plethora of marketplace options available and the best solutions to create them also at your disposal sky will be the limit.

The time to get ready for which is NOW.


Marketing Manager of Mageplaza. Summer is attracted by new things. She loves writing, travelling and photography. Perceives herself as a part-time gymmer and a full-time dream chaser.

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