E-commerce and the Pandemic: A Quick Analysis
The e-commerce model has been around for quite some time now. Many people are aware of it, but they still choose to go through the traditional brick-and-mortar stores. Nobody knew that the COVID-19 pandemic could change the public’s buying decisions.
With lockdowns and restrictions imposed by world governments, traditional physical stores have experienced monthlong operating losses due to the pandemic. In some countries, lockdowns took more than a month, which caused margins to plummet below breakeven.
However, despite shaking world economies, the pandemic has opened the public’s eyes to alternative ways of acquiring goods like food and other necessities. This shift grants e-commerce businesses the opportunity to build long-lasting relationships with customers.
According to the August 2020 Adobe Digital Economy Index, online spending started to rise in March and peaked in May. The total online spending for May surpassed the average holiday spending. Furthermore, Adobe Analytics found out that there’s a $107 billion difference between actual online spending and expected online spending.
The increase in online spending, however, fell below the average holiday during August, but this decline is still far from the expected online spending for 2020. Aside from that, the report also found out that the US digital purchasing power—the people’s ability to buy online—grew 42 percent year over year ever since Adobe conducted these surveys.
Shift of Preferences
Though governments enforce the practice of wearing masks and protective equipment, the threat of COVID-19 is not yet eliminated. Even with masks and frequent sanitation, no one is free from the risk of contracting the virus.
According to McKinsey & Company’s discussion document, entitled A Global View of How Consumer Behavior Is Changing amid COVID-19, the proponents reported that consumers preferred digital and low-contact services in entertainment, delivery, food and shopping, communications, and wellness.
Thus, households shifted to e-commerce platforms to acquire food and necessities. With a door-to-door delivery or curbside pickup service, consumers can lessen their likelihood of interacting with asymptomatic patients.
Besides selling goods online, consumers now prefer online fitness classes, video chats, videoconferencing, and telemedicine instead of in-person meetups.
The Need for Digital Transformation
As the pandemic caused the closure of physical stores, companies with little to no online presence and e-commerce integration are forced to close permanently. However, companies that have established e-commerce platforms long before the pandemic reaped their rewards as the public shifted to these platforms.
Thus, the pandemic became an eye-opener to the importance of digital transformation. Online selling is gaining more attention, and people are most likely to continue purchasing online even after the pandemic.
McKinsey & Company’s discussion document added that US and most European countries would continue to use online channels even after the pandemic. The claim study found out that there is a 14 to 50 percent growth in online purchases in the US, Europe, and some parts of Asia.
Increasing Partnerships across Industries
As businesses venture into the internet, many companies have sought web designers, social media marketers, content creators, photographers, and digital marketing specialists. Partnerships with the creative industry created a culture of interdependence and necessity.
Many companies now realize the need for high-quality online content more than ever. Thus, this shift in perspective paves the way for artists—both amateurs and professionals—to sell their services to a broader market composed of different customers across industries.
Analysis: How E-commerce Helped during the Pandemic
The shift in priorities and purchasing behaviors led to the rise of e-commerce, but how did e-commerce help during the pandemic? Here are some key takeaways:
- Even after the reopening of malls and establishments, many people continue to buy online. This practice reduces the risk of contracting and spreading the virus.
- Established e-commerce platforms have experienced a boost in sales amid geographic lockdowns. In effect, e-commerce helped the economy in providing goods, services, and income to the people.
- Online accessibility is becoming a trend. Many businesses are now venturing online, and the public can buy almost anything with only a few clicks. With the help of e-commerce platforms, companies with no online presence can build their online store for their loyal customers.
- As businesses shift to e-commerce, prices of products sold online compete if compared with different online stores. In effect, consumers will benefit from price competitions since online stores will reduce prices to induce higher sales.
Conclusion
The rise of e-commerce is unprecedented. Nobody knew a pandemic was coming. Statistical projections never considered a pandemic in estimating economic growth, profit margins, consumer behavior, and consumer preferences.
But as the world continues to face this pandemic, businesses are now venturing into e-commerce to attend to their customers virtually. This scenario only leads to a safer and more comfortable shopping experience for the public.
Thus, e-commerce played a significant role during this pandemic. It became the source of essential goods and services to the household. And finally, it only made online selling a viable and lucrative business opportunity for everyone.
