Impact of the COVID-19 Pandemic on Customer Shopping

04/08/2021

COVID-19 has forced consumers to stay indoors. Shoppers are 30.6% more likely to make online purchases in 2020 than they were in 2019, with the growing reliance on digital commerce as the retail stores are likely to remain closed or understaffed until the pandemic recedes.

The COVID-19 and E-Commerce Statistics

The COVID-19 pandemic has forced brands to swivel their 2020 e-commerce strategies enormously to cater to and cope with consumers’ continually shifting behavior. Here are some of the current stats and trends:

- Online sales surpassed USD 4.2 trillion in 2020 worldwide
- 11% of the advertisers anticipate that COVID-19 may have a significant impact on their ad spending in Q4
- 68% of the advertisers anticipate that COVID-19 may impact their ad spending in 2021
- 62% of the customers in the United States of America, shop online more now than they used to before the pandemic

Potential Contributing Factors behind the Accelerated Growth of E-Commerce during the Pandemic

E-commerce could prove to be beneficial for Micro, Small, and Medium Enterprises (MSMEs) by taking their products to the wider market and maneuvering geographical boundaries. Consumers may also get benefitted through a wider choice of products, competitive pricing, and many more. A significant and noteworthy benefit for both the MSMEs and consumers is the demand and supply of pandemic-specific essentials, such as hand sanitizers, face masks, and medicines.

The ‘safe shopping’ experience has taken a leap with the growing impact of the pandemic.

Pertinent Challenges

Firstly, although the government has permitted delivery of essential goods during the COVID-19 lockdown, it is difficult for service providers to procure permits for their supply chain workers.
Secondly, key gaps have emerged in the backend supply chain between manufacturers, wholesalers, and retailers, resulting in a supply cycle logjam. Due to the break in the demand-supply chain, the timely fulfilment of consumers’ orders and services at their doorstep may have a ripple effect, thereby affecting business.
Thirdly, the post-lockdown impact on small e-commerce stakeholders is likely to be massive. There are many suppliers who provide non-essentials goods, and with the rise of the pandemic, they may be struggling to find sustainable ways of managing their business expenses.
Lastly, the generic challenges of the e-commerce sector still remain prevalent. These challenges include inadequate infrastructure for last mile internet access, lack of awareness, and capability constraints between MSMEs and consumers. In addition to this, there may be challenges like cybersecurity and foolproof data privacy that still persist as recurring issues which may hinder the consumers from entirely shifting online.

The Revival

The disruption caused by the pandemic has slowed down the fast-paced world, making the business environment highly unpredictable for most industries, and e-commerce is no exception. The aforementioned challenges are likely to persist, but with the ‘unlock’ setting in, remodeling businesses would likely bring in benefits for the e-commerce stakeholders, which may help them in gaining more consumers and earning greater revenue.

Staying connected with customers may help e-commerce players win customer acquisition and retention battles. The crisis has shifted customer priorities and behavior, and this is likely to persist in the post-pandemic world as well. Agile business growth with response to newly grown demands, penetration into new categories and territories, customer convenience, product assortment, and transparency may ensure better engagement with customers, reinforcing customer loyalty.

Seamless shopping experience is one of the key factors for the rise of the e-commerce sector as friction is detrimental for both the stakeholders and consumers. The rising digital commerce is creating new customer touchpoints, which may help to enable better interaction between shoppers and businesses through a network of categories and platforms.

Reimagining inventory management and supply chain also has a crucial role in the new post-pandemic era. People are making purchases based on the new and ever-changing circumstances, and the top-listed product categories also require revamp. The e-commerce sector may do well if the supply models are redesigned revolving around their supply chain strategy to establish resiliency and respond to the ‘new normal’.

Accelerating digital payments not only promotes safe and contactless delivery, but also makes the overall process smoother and professional. With the World Health Organization (WHO) advising consumers to use contactless cards or smartphone payments to help reduce the risk of spreading the virus, the pandemic proved to prompt faster adoption of digital payments. Even the customers, with the new normalcy setting in, are embracing digital wallets and contactless payment modes as the world now adjusts to social distancing guidelines amidst the pandemic.

For now, until the global economy is re-established, it is crucial to adhere to a simple and uncluttered thread of hope and diligent strategy to stay afloat.

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