How E-Commerce Shows Steady Post-Pandemic Growth

E-commerce is up and running as usual, even after the pandemic

It’s no secret that ecommerce has soared in light of the COVID-19 pandemic. Online shopping reached levels last year that it wasn’t projected to until 2025. In fact, the biggest winners are companies that started to grow their e-commerce businesses way before the pandemic hit. Ecommerce businesses are reliant on a robust supply chain, and the crisis has shown this to be susceptible to massive change in a short period of time. Whether retailers are waiting on supplies to be shipped from overseas to fulfill orders, or simply haven’t had access to their own warehouses to send out orders to shoppers, the pandemic has shown how fragile the supply chain can be.

Unfortunately, when looking at possible pandemic outcomes, there is very little chance that global retail will go back to normal in the short or even medium term, moreover a new normal is far more optimistic for online shops than for physical stores. Once the pandemic ends, will things get back to “normal”? Or will the lessons learned, and innovations developed during this time change the face of ecommerce for good? Here are some areas where its possible changes made during the pandemic to improve or pivot will be maintained and developed moving forward.

While this seems dire in the short term, with crisis comes opportunity and rather than suspend all marketing, retailers are being given an opportunity to iterate and reiterate on campaigns – particularly digital efforts – in order to attract and convert new and existing shoppers. Given, as already discussed, that there is an upsurge in online shopping and demographics who previously didn’t shop online are finding themselves doing so by necessity, there is a massive opportunity for retailers to retain these customers post-pandemic by providing excellent shopping experience and winning over possibly previously sceptical shoppers.

Overall ecommerce will retain 20-30% of the growth it saw at the height of the pandemic (Mastercard) 62% of consumers shop online more now than before the pandemic (Bazaarvoice) What other steps does your ecommerce brand need to take to thrive despite the COVID-19 disruption? We’re in a much different place than we were last year with the COVID-19 pandemic, but we’re definitely not out of the woods yet – and the holiday shopping season will certainly still feel some impacts.

Some are up and some are down, which is expected, but overall e-commerce is the big winner in the current situation. With some small exception and challenges related to international deliveries and disruption of the supply chain, e-commerce is doing better than ever. Since the onset of the Covid-19 pandemic, consumers across the globe have been heavily reliant on e-commerce to purchase everything from essential goods to holiday gifts. Combined with widespread stay-at-home orders and concerns over the virus, the pandemic accelerated the adoption of e-commerce by consumers and businesses seemingly overnight.

Consumers are using the internet more for shopping

Following the pandemic, more than half of the survey’s respondents now shop online more frequently and rely on the internet more for news, health-related information and digital entertainment. Consumers in emerging economies have made the greatest shift to online shopping, the survey shows. Merchants continue to follow consumer demand online, flocking to ecommerce in record numbers. Online stores are popping up daily, with an estimated 12–24 million ecommerce sites across the globe. This ecommerce growth means more brands competing for customers. As a result, digital advertising is more costly and less lucrative than ever before. Merchants continue to follow consumer demand online, flocking to ecommerce in record numbers. Online stores are popping up daily, with an estimated 12–24 million ecommerce sites across the globe. This ecommerce growth means more brands competing for customers. As a result, digital advertising is more costly and less lucrative than ever before.

The Index found that 37% of U.S. consumers will buy online and pick up in store more often in the future. But buyer beware: curbside or in-store pickup can quickly lose its luster if consumers endure long wait times in a jammed-up parking lot, or if their local store inventory can’t accommodate their online purchases. So, while the store as a fulfillment center can be an effective strategy, it requires systems and business units that communicate with each other to deliver on the promise. As services scale, so must retailers’ ability to deliver a consistent experience.

Considering the consumer’s entire journey is especially important in today’s environment, where people’s social needs, such as feeling a sense of community, will impact their buying habits as the conditions of the pandemic continue to change. While the shift toward online shopping will likely remain, the desire for post-pandemic social interaction will likely drive people back to stores. Case in point: The Index found that 38% of consumers intend to do more shopping online and visit stores that provide great experiences.

For individuals, e-commerce enables physical distancing while retaining access to the full product variety. While e-commerce in the past for many consumer groups was centred on high tech goods, toys or books, it now increasingly involves goods for which availability is critical to a large share of the population, including groceries, medicine and other necessities. E-commerce has further enabled continued access, either online or physical, to certain areas of public life, such as concerts, museums or swimming pools, including by efficiently allocating time stamped tickets to avoid overcrowding. Similarly, for many firms e-commerce is now a vital alternative or complementary sales strategy, allowing continued operation in spite of contact restrictions and other confinement measures.

Businesses are benefiting from the trend

Businesses are overcoming the competition by investing in brand building, which increases customer lifetime value, boosts conversion rates in the short term, and attracts out-of-market buyers in the long term. As advertising platforms get more competitive, brands that haven’t developed familiarity and trust with consumers will become more entrenched in a direct-marketing battle to offer customers the lowest price.

The shift towards online shopping has further entrenched the already strong market concentration of online retail and marketplace businesses. The 13 top consumer-focused e-commerce businesses increased their revenues sharply during the pandemic [Figure. The data tells us that COVID pandemic-related business restrictions have forced a global business paradigm shift towards the digital economy, which has negatively impacted traditional business models while also creating opportunity through sales diversification online.

A small ray of hope for business from ecommerce amid the darkness of the COVID pandemic fallout. There have never been as many opportunities in the ecommerce industry, nor has there been as much competition. Plummeting return on ad spend is pushing brands to prioritize customer lifetime value and promote brand loyalty. The COVID pandemic crisis has forced many small businesses to reassess the decades-old traditional business models or face closing permanently. New and existing technologies are thrust to the forefront of every business toolkit, and forward-looking businesses are addressing talent questions that arise from these new digital business skillsets.