How COVID-19 Is Impacting EcommerceApril 8, 2020
As Americans grasp with the scale of the COVID-19 outbreak, many have already made changes in their day-to-day lives. Everyone—people and businesses—understands the severity of the pandemic and the importance of decreasing the spread of the virus.
Shelter at home orders and social distancing guidelines have quickly altered behaviors—especially when it comes to shopping. With officials urging people to avoid large public gatherings, brick-and-mortar retail centers have been hit especially hard. But as anxiety over COVID-19 increases, some retailers have seen surges in online shopping.
“Online shopping for COVID-19 related items is up. Americans are taking Coronavirus very seriously, and taking measures to protect themselves and their loved ones,” said Nate Smith, Group Manager of Product Marketing for Adobe Analytics, which monitors the ecommerce transactions of 80 of the top 100 US retailers.
According to Adobe’s analysis, items that offer COVID-19 virus protection like hand sanitizers, gloves, masks and antibacterial sprays have surged by 817%. Other goods experiencing a boom include over-the-counter medications and shelf-stable pantry items like rice, oatmeal and pasta. And that behavior isn’t likely to change anytime soon.
A February 2020 Coresight Research survey showed that while 27 percent of US internet users were avoiding public places, 58 percent said they would do so if the Coronavirus outbreak worsened, which it has.
So what does this mean for ecommerce? Will people’s online shopping behaviors change further, or shift from panic-buying toilet paper back to non-essentials?
Here are some statistics on how ecommerce is being impacted by COVID-19.
The market research company Nielsen has identified six stages of COVID-19 related consumer behavior:
- Proactive health-minded buying (preventative health and wellness products)
- Reactive health management (masks, gloves and hand sanitizers)
- Pantry preparation (stockpiling groceries and household essentials)
- Quarantine prep (experiencing shortages in stores, making fewer store visits)
- Restricted living (making fewer shopping trips, limited online fulfillment)
- A new normal (return to daily routines, permanently altered supply chain)
What does that mean? Sales of health and safety products like medical masks are currently skyrocketing. And because people are spending less on restaurants and travel, digital streaming services are seeing atypical gains in subscribers. This consumer behavior, however, will continue to shift as the global health crisis continues to unfold.
The goods being purchased now, as well as product categories, will inevitably change as consumers progress through the stages, from proactive health-minded buying to, eventually, the “new normal.”
Omnichannel vs. Pure-play Ecommerce vs. Subscription Services
How are different ecommerce businesses faring? The performance branding company WITHIN has been tracking the effects of COVID-19 on ecommerce across a number of specific sectors.
Omnichannel merchants, which have both brick-and-mortar and an online presences, haven’t seen a year-over-year increase in revenue or conversion rates. Pure-play ecommerce, which covers direct-to-consumer (DTC) brands that only sell online, experienced a downturn but are now showing potential for recovery. Meanwhile, subscription services have seen significant upward trends in both revenue and conversion.
Consumer Behavior by Demographics
New findings from the consumer firm First Insight breaks down current consumer concerns by demographics.
According to a survey of U.S. and U.K. consumers, 96 percent of Millennials and Gen Z-ers are concerned about the pandemic and the toll it will take on the economy. This is causing them to change their purchasing behaviors, including cutting back on spending for goods and experiences, while stocking up on essential items.
Gen X and Boomers, on the other hand, are slightly less concerned than younger generations and, up until recently, haven’t changed shopping habits as much.
Sucharita Kodali, Vice President and Principal Analyst at Forrester, told Forbes that while consumer confidence in the US economy is causing consumers to buy less overall—both in-store and online—she remains hopeful the landscape will “be in a better place by summer.”
Kodali predicts that retailers and DTC brands that stay true to their core values while continuing to listen to their consumers will come out of this challenging time even stronger.