How Online Retailers Can Cope or Maintain Sales as Coronavirus Impacts eCommerce
Preventive measures over the spread of the coronavirus (COVID-19) are escalating. As a result, many industries, including eCommerce, are constantly adjusting priorities to stay on top of the latest developments.
New consumer behavior and scenarios due to the virus are going to continuously affect retailers around the world. Thus, eCommerce websites must focus on efforts that not only boost sales in the short term but also deliver exceptional experiences that make a lasting impact—beyond the crisis.
A look at the current situation
To halt the spread of coronavirus, governments around the world are limiting the movement of people. As quarantines and social distancing are imposed, consumers are staying home which in the short term is boosting online sales.
In the US, preliminary data from Quantum Metric showed eCommerce retailers with brick and mortar stores experienced a 52% online revenue growth during the rapid spread of the coronavirus outside of Asia (January 27th to February 23rd). Examining 5.5 billion web and mobile consumers, the analysis also revealed conversions higher than the same time last year at 8.8%.
Kohl’s, for instance, noted weaker sales in areas most affected by coronavirus but saw no impact to date on its eCommerce channel.
Italy is one of the hardest-hit countries outside of China. Online sales in February 2020 grew significantly compared to the same period in 2019. According to Statista, eCommerce sales increased by 101.5% on the weekend of February 22nd.
In India, eCommerce companies experienced at least a 25% increase in orders, according to industry insiders. MoEngage also observed that more and more of its 400 million active users are shifting to online shopping.
What to do now and expect in the immediate future
Even with the boost in eCommerce sales, the outlook is mixed and uncertain for retailers. Digital Commerce 360 found that while 38% expect online revenue to grow, the rest anticipate flat or declining sales. Disrupted supply chains causing production delays (44%) and inventory shortages (40%) are the top concerns of retailers.
While there are consumer confidence challenges (42%), Wedbush analysts revealed that footwear and apparel are among the least hurt by consumer pullback. About 80% of consumers indicated none to a small impact on shopping patterns when it comes to these retail segments.
In fact, Zara registered a 23% jump in online sales for the year until January 31st, as it closed down stores globally due to the coronavirus. H&M also experienced a 5% growth in local currency terms in its first quarter to February 29th.
As unusual and new scenarios due to the virus continue to affect retailers around the world, here are measures that eCommerce websites must do.
1. Monitor for new consumer behavior
Consumers are staying home which results in the need for remote interactions. Spike in online browsing is likely to happen. According to eMarketer, digital media consumption is going to increase across social media (visual-based ones like TikTok is already showing evidence), streaming video services, and online gaming.
More virtual events are also expected to happen, increasing the need for image and video content to constantly engage consumers. These new, online-focused consumer habits are likely to persist beyond the crisis, Harvard Business Review shared.
2. Prepare for “pent up demand”
The same Wedbush survey said that the pressure brought by the coronavirus is transitory and not tipping the economy into recession. By the second half of this year, “pent up demand could partially offset” the impact being felt now.
Although uncertain of the new norm months ahead, consumer demand is always there. For instance, Dick Sporting Goods expects a buildup of demand to offset “material negative impact on apparel retailers” in the first half of the year.
In fact, the Chinese Textile and Apparel Chamber of Commerce reported the resumption of operations in textile and apparel sectors towards 80% of the normal situation.
3. Adapt and reprioritize strategies to new opportunities
Retailers have to find new and creative ways to ride out the storm. As demand increases in B2C and B2B eCommerce (as what happened in China), investing in technologies that enable omnichannel retail and empower omnichannel shoppers has never been more vital.
IHL Group expects investments to increase in digital solutions that optimize click and collect and delivery. The same can be said of tools that decentralize the supply chain, AI/machine learning, forecasting technologies, and analytics.
The focus is on building online experiences with a lasting impact
In summary, consumers are online now more than ever. Shoppers are interacting on visual social networks and buying on eCommerce websites while waiting for the crisis to subside before full-on spending again.
Online retailers with already robust and excellent digital platforms are sure to feel the effects of this new shopping behavior. As consumers shop online, retailers must deliver exceptional experiences that make a lasting impact—beyond the crisis.
With Syte’s Visual AI solutions, retailers can deliver exciting and better experiences to shoppers that increases conversions on eCommerce websites. As consumers today crave personalized yet remote interactions, it is critical to connect them with products they are looking for quickly and easily.
From Camera Search to Recommendation Engines, Syte’s solutions ensure consumers receive accurate, visually similar search results that enhance product discovery and making any image instantly shoppable. As a result, retailers not only engage consumers but also build brand loyalty that is beneficial in the long run.
For us at Syte, we find it encouraging to see that eCommerce is a stable and growing revenue channel for retailers even during these uncertain times, where we are all adjusting to the new reality of social distancing. To discover what Syte can do for you, retailers, brands, and marketplaces, email us at [email protected] today.
Credit: Modified image from Shopify’s BKLYN theme