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16th March 2020

What effect does COVID-19 have on e-commerce?

While online shopping may benefit in the short term, supply chain issues and uncertain consumer demand could dampen the e-commerce outlook.

Events like Adobe Summit & Magento Imagine, South by Southwest, Shoptalk and many regional and local e-commerce/business-related events are either postponed or cancelled due to the spreading of the COVID-19 in Europe and North America. While Adobe Summit will be organised as an online conference (on which you can register here) many online retailers are wondering, “How will the coronavirus affect my online business?”

There is a significant spike in flue related products – such as health products and cleaning supplies. 47% of retailers expect some downside in revenue due to the coronavirus, according to a survey conducted in March 2020 of 304 retailers by Digital Commerce 360. 33% of retailers say it’s too early to tell. However, a majority of retailers, 58%, say the virus will impact consumer confidence, and 22% say there will be a significant impact. Consumer confidence is often used as a measure of how consumers feel about the economy.

Long Term - Short Term Animation

In Denmark, Subway reported an 80% decline in turnover and urged the public to “make that extra order” in their favourite takeaway. On the other hand, Daily Mail is reporting that cannabis smokers queued up to stockpile weed in Holland yesterday after the country’s famous ‘coffee shops’ were ordered to shut over coronavirus fears. Leaving the widespread quest for pasta and toilet paper to one side, customers in Amsterdam, Eindhoven and the Hague lined up in their dozens on Sunday to stock up on marijuana.

Nemlig.dk screenshot
nemlig.dk waiting line

While some want to stock up on their favourite necessities Denmark’s largest and most successful online supermarket nemlig.dk is having a huge influx of traffic in the past few days. To manage the upcoming traffic it’s using a solution created by a Copenhagen based company Queue-it. Pictured on the left, over 6000 people are waiting patiently to make their online order.

An influx of sales for health products

Online sales have increased 52% compared with the same time frame a year ago, and the number of online shoppers has increased 8.8% since the coronavirus began, according to SaaS platform provider Quantum Metric. The firm analyzed 5.5 billion anonymous and aggregated online and mobile visits to retailer websites from U.S. consumers. Jan. 1 and Feb. 29.

Site search provider Bloomreach found similar increases for its 250-plus retailer clients, such as grocery chain Albertsons Cos. Online sales increases for the week of Feb. 22-29 compared with the prior week include:

  • Masks sales increased 590% from the week prior
  • Hand sanitizer sales increased 420% from the week prior
  • Clorox/Lysol wipes sales increased 184% from the week prior
  • Disinfectants sales increased 178% from the week prior
  • Gloves sales increased 151% from the week prior
  • Bottled/packaged water sales increased 78% from the week prior
  • Vitamins sales increased 78% from the week prior
  • Tissues sales increased 43% from the week prior
  • Hand soap sales increased 33% from the week prior
  • Toilet paper and paper towels sales increased 26% from the week prior

Mask retailer Debrief Me can testify to the influx in sales since the coronavirus news spread. The retailer sells masks in different colours and styles that consumers wear for anti-pollution measures and to prevent the spread of viruses and germs. The retailer says its masks are engineered to block 99% of all contaminants found in the air.

DebreifMe Screenshot
Waiting list on debriefme.com

The retailer has fielded 200 to 300 customer service messages per day with its 11-person staff, sold a “huge amount” of masks in China and sold out of masks in Japan in one day, Silver says. As of publication, its masks are completely sold out, and it launched a first-come, first-serve waiting list on March 10 to be notified when items are back in stock. As of March 16, more than 1500 people have signed up for the waitlist.

The coronavirus’ impact on retail

Not all retailers, however, have had sales gains because of the wealth of problems associated with COVID-19, such as supply chain issues and potentially fewer shoppers in stores who do not want to risk exposure. For example, there is a large impact on imports at major U.S. retail container ports due to factory shutdowns and travel restrictions in China that affect production and fulfilment, according to the Global Port Tracker report released this week by the National Retail Federation and Hackett Associates.

There are still a lot of unknowns to fully determine the impact of the coronavirus on the supply chain.

Jonathan Gold, NRF vice president for supply chain and customs policy

As factories in China continue to come back online, products are now flowing again. But there are still issues affecting cargo movement, including the availability of truck drivers to move cargo to Chinese ports. Retailers are working with both their suppliers and transportation providers to find paths forward to minimize disruption.

Online marketplace Etsy Inc., for example, said that only a small percentage of supply and demand is in China, so it hasn’t had much of an impact on Etsy sellers yet.

Urban Outfitters Inc., is keeping a close eye on the coronavirus and how it will impact its supply chain and demand for its products.

The bottom line is COVID-19 creates supply chain uncertainty and could create demand uncertainty as well.

Urban Outfitters Inc. CEO Dick Hayne

Erik Nordstrom of Nordstrom Inc. also mentioned the coronavirus and its potential impact on Nordstrom’s supply chain on the retailer’s Q4 earnings call.

For the foreseeable future and next few months, foot traffic dropoff to stores is a big concern for brands. But the big question of how they can mitigate consumer fear remains

Tom Buiocchi, CEO of SaaS facilities management platform ServiceChannel

One way is by ensuring consumers that they are taking health and safety seriously by taking the proactive steps of deep cleaning their stores or increased cleaning schedules. It’s not just an aesthetic issue anymore; it’s a step in rebuilding consumer trust.

Sources: Digital Commerce 360, Nemlig.dk, DebriefMe.com, Bloomreach.com

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