Towards the end of the year 2019, a virus had infiltrated the world, affecting the health and even lives of people globally. By the beginning of 2020, COVID-19 was considered an Epidemic, that led to great impacts on the market, especially the E-commerce industry.
Countries were going into lockdown, social distancing needed to be maintained and even 10 was a crowd. These factors led consumers to make distressed purchases, undertaking bulk buying, shop online, etc. That being said, it goes without saying like all the other industries, there has been a huge impact of the COVID-19 on the E-commerce industry. What are these effects? Let’s try to understand –
- The Psychological effects: The recuperations of any pandemic or epidemic are not only physical but psychological too. With the declaration of the pandemic and most countries over the world declaring lockdowns, resulted in people becoming panicked and they started buying in bulks to stock them up for the future. With so many people doing panic purchases and bulk buying led to a risky situation where businesses struggled to meet the demands. Be it the physical businesses or online businesses, the purchases for essentials increased a lot.
- Effect on the Gen Z & Gen X: More than half the Gen Z population is seen to be affected by the Pandemic and its restrictions. They thus showed many changes in their shopping habits. It included reducing their spending and making purchases to stock up items. On the other hand, Gen X was comparatively less affected and there were not many changes in their behavior.
- Increasing online ventures: With the lockdown restrictions, many physical retail businesses were shut down, affecting their sales and revenues. This led to physical businesses venturing into the e-commerce platform. Especially those selling perishable products like groceries, Also, businesses started to adopt services like curbside pickup and home delivery, BOPIS (Buy Online and Pickup In-Store)
- Increase in e-commerce Revenue: With the onset of COVID-19, there has been an increase in online shopping of groceries and household goods. These are the products required for everyday consumption. With safety in mind consumers preferred purchasing these products online rather than going to stores physically. Similarly, purchasing of processed food products with a good shelf-life has increased. Thus, more consumers are buying products like milk substitutes, dried beans, fruit snacks, etc. in preparation for long-term planning of lock-down. Also, health and safety product consumption too increased and has been on a hike. Thus, the demand for face masks, gloves, hand sanitizers, alcohol, etc. has increased and the revenues of businesses.
- Hike in online entertainment: Due to the effects and aftereffects of COVID-19, people are confined to their homes. There are no external entertainment options that they can enjoy. This has lead to an increase in demand for online services such as digital streaming. The number of subscriptions for Amazon Netflix, Disney+, etc. streaming services has increased a lot. These non-traditional streaming services are also releasing movies on demand, and even before the projected release so that consumers pay extra to view them online from their homes.
- Negatively impacted e-commerce product categories: With the advent of COVID-19, some e-commerce product categories have been negatively impacted. This can be seen especially in categories like restaurants that have been full-time or partially under lockdown. Also, with restrictions on transportation, flights, etc; the travel industry has badly taken the brunt. Online purchase of Luxury good too has decreased, impacting this product category negatively
These are the various effects that COVID-19 has had on the E-commerce industry. Respective businesses should understand them and accordingly take measures to survive and emerge well from this pandemic.