Ecommerce and the Covid-19 effect

Never has consumer behaviour shifted so quickly. Our daily routines, needs and priorities are changing at lightning speed as a result of the COVID-19 outbreak and our daily lives look very different to what they were a few weeks ago. And nowhere is this shift more apparent than in our shopping habits which, out of both necessity and convenience, are moving in the direction of ecommerce.

Shopping is an inherent part of our day-to-day lives and has long been an indicator of where we are economically. Take the lipstick effect which highlights how shoppers up their spend on small treats such as beauty products instead of buying big ticket items when disposable income is squeezed. When you delve into it, our purchasing decisions reflect the way we feel about the economy and how confident we are. This time around? Toilet paper was the clear indicator of our concerns.

But how does changing buying behaviour present itself when the shops aren’t open to be visited? With governments across the globe halting travel, limiting time outside the home and deciding what is and isn’t an essential purchase, the opportunity to ‘go shopping’ is largely non-existent outside of the supermarkets.

Enter ecommerce, which is itself tackling huge change. Whether coping with swift increases in orders – with online commerce up 88% in March – managing the supply chain, or protecting warehouse staff and delivery drivers, there’s plenty to consider between an online purchase and dropping off a product. Let’s take a deeper look at the challenges and opportunities currently facing retail and ecommerce.

What’s changed for retailers?

Starting with the obvious – the shops and department stores are closed. Some brands such as Apple, Nike and Urban Outfitters chose to lock up before they were obliged to, but for the majority closure is now mandatory. Unless you’re selling items governments agree we can’t live without such as food, toiletries and cleaning products, opening the doors to your physical stores and letting customers peruse is not an option. And even if you do, the majority of your clientele won’t visit due to government rules and concerns for their own health.

But it is not entirely doom and gloom. If there was ever a good time to be confined to the home, this is it. With ecommerce already an established part of many shopping journeys, access to non-essentials such as fashion, games and homewares is still open. Both shopping apps and online stores have seen increased engagement since isolation got real. Retailers with established digital offerings are thriving; those able to quickly adapt even more so. From John Lewis and Ikea to H&M and Boots, many big-name retailers are still selling online though an ecommerce website.

It’s not only where we shop that is changing, but also how. With home-based consumers gaming, streaming, social networking, using shopping apps and engaging with online content that reveals their likes and interests, ecommerce content in these environments is becoming part of the purchase process. It is influencing consumer choices, helping shoppers decide what to buy and driving them to retailer websites to covert.

Is the ecommerce situation new?

While Covid-19 related changes seem to happen overnight, the shift to ecommerce has been taking place for some time, driven by economic, social and technological change. The ‘death of the High Street’ has been predicted by the industry press for years and both ecommerce-only and ecommerce-first players saw significant success long before the current situation began.

Last year high-street names such as Debenhams, Mothercare and Bathstore entered administration while online giants increased their profits. Amazon alone absorbs £4 out of every £100 shoppers spend. And there was clear evidence of a shift to ecommerce in February this year when storms bombarding the UK forced shoppers to stay in and buy online. This shift in shopping experience from offline to online is not a surprise, it is the pace of change that is causing a shock.

What’s next for retail?

While we all hope this is a standalone and short lived event, the behavioural changes caused by COVID-19 will have a lasting impact, and the pressure of the current climate is already driving innovation. Food retailers in particular have adapted quickly and effectively, offering improved delivery options, hiring personnel at unprecedented rates, and forming partnerships, such as the arrangement between M&S and Deliveroo, at record speeds.

Not only has this innovation highlighted retailers’ ability to adapt, it is setting new expectations for when life returns to normal. The shift to ecommerce solutions is now set and even those that have prioritised brick and mortar to date will reopen with a fresh perspective on what consumers want and need. New omnichannel shopping models that combine the best of offline and online are being established and these will be expected to carry on in the future, providing consumers with the most convenient shopping experience for their unique needs.

Opportunities for retailers

So, now we’ve established the impact of COVID-19 will be long lasting, what can retailers do to make the most of this period of change?

For nimble and innovative retailers there are many opportunities to adapt and protect the future of their businesses. With browsing time increasing and the battleground solely online, winning on customer experience will be vital, so retailers must ensure their ecommerce platform is up to the challenge of delivering a seamless and personalised customer journey.

Retailers may want to adapt their services to the current situation, perhaps by offering longer returns periods or free shipping. They will also need to be clear in communication, explaining which products are available and outlining any changes to delivery arrangements. In addition, those able to adapt to media consumption habits of consumers who are stuck inside using shopping apps, reading publisher content and spending time on social media, will build lasting relationships to support long term success.

Shared values are already a key driver of retail sales, with sustainability a core example, and this will be an even bigger part of purchasing decisions from now on. Those that took action quickly and put human needs above profit have already been praised and it will be these businesses that win the loyalty of consumers for long after Coronavirus is gone. Some may feel Next is damaging business by limiting the number of online orders it will accept each day, but most shoppers will appreciate this is to protect warehouse staff who need to work with social distancing measures in place, ultimately boosting Next’s reputation as a responsible retailer. Similarly, those brands that bring positivity to an inherently uncertain situation will thrive.

With change comes uncertainty but also opportunity. As the lockdown brings a bigger audience online, ecommerce is here to stay, even when the shops can open again. Retailers that focus on customer needs will adapt to the immediate situation and will continue to deliver an omnichannel experience when the High Street opens for business again. Values and authenticity will be key drivers of success so understanding your target audience and what they want is more important than ever.

To find out more about the services we provide to technology companies in the ecommerce space, feel free to contact us at hello@teamgingermay.wpstagecoach.com