As the coronavirus pandemic continues to spread, many economists predict that the eCommerce sector is one of the most critical sectors and will play a pivotal role in supplying the population with their needs. Because the masses are avoiding crowded places and observing social distancing, more people choose to stay home to ensure their health and safety. However, amid the coronavirus outbreak, people still need and want to shop. They need essentials, like food and medicine. But they also want items that will help them get through their time in isolation or quarantine. The problem, however, is accessing those products.
Many business owners are suffering because quarantine restrictions are keeping customers away from their physical stores, and/or they have been ordered to close them altogether. The coronavirus is impacting eCommerce as manufacturing closures are leaving them without the ability to replenish stocks. Logistical problems are also diminishing eCommerce sales. And while some companies are struggling to generate cash flow, others are experiencing business growth.
What Can eCommerce Brands Expect During the COVID-19 Pandemic?
During these times of crisis, many unknown variables are affecting eCommerce businesses. How far will the COVID-19 spread? How will the market respond? What will be the overall impact of the pandemic on a global scale? How long until we return to business-as-usual. Will business-as-usual ever look the same again?
Here are some of the most important predictions that can give you an idea of what to expect.
- Decline in consumer confidence. Retailers are concerned about consumers’ confidence, which is an important indicator that measures how optimistic customers have been about the overall state of the economy and their personal financial situation. However, nobody knows how great the impact will be.
- Changes in consumer demand and business revenue. In March, Digital Commerce 360 conducted a survey, and almost half of the surveyed retailers (total of 304) said that they expect a decrease in revenue due to the pandemic. One-third of them think that it’s still too early to tell, while the rest believe the impact of COVID19 will be a significant one. On the other hand, recent data published by Quantum Metrics shows that eCommerce has actually experienced an increase in average revenue weekly growth of 52% (compared to a year ago). This means that more consumers are turning to online shopping, which leads to an increase in demand. Also, people are increasingly buying essentials (like groceries and personal care items). Sellers on nonessentials on Amazon have seen a drop in sales by 40-60% because consumers limit their discretionary spending.
- Supply chain issues. Online sellers are facing supply chain issues. Due to a massive strain on their supply chain, there are labor shortages, technical glitches, and shipment delays. Online retailers are focused on contingency planning and improving supply chain communication.
- Inventory shortages. Since most people are buying more to stock up, you have probably seen empty shelves in your local grocery stores. Industries are experiencing inventory shortages because they weren’t prepared for increased product demand, and 44% of the sellers surveyed believe that they will experience production delays.
- Longer delivery. By getting accustomed to conveniences, such as two-day shipping, modern consumers often choose to buy a product that will arrive fastest. However, shipping delays, demands on inventory, and supply-chain issues are making it challenging for eCommerce businesses to deliver on time (even giants like Amazon are facing these problems). That means that online buyers will have to plan to purchase the products they earlier to account for the longer delivery windows.
How to Protect and Improve Your eCommerce Business
Being flexible, agile, and nimble is the deciding factor when it comes to mitigating the impact of the coronavirus crisis on businesses. In other words, eCommerce brands will have to rethink their marketing strategies to become more relevant. This is what you can do to manage this crisis.
Don’t over-communicate and hard sell
During these harsh times, it is essential to communicate with customers. However, you should focus on what is important and avoid over-communicating. Over-communication about irrelevant things can be as damaging as not communicating at all. Find ways to share positive stories and thoughts. Also, you shouldn’t try to find ways to sell more but show support to your customers. Your message to your customers should be encouraging.
Customers during the coronavirus outbreak need reassurance that the brands they trust aren’t taking advantage of their fears and desperation. Focusing on profits amid a pandemic, like raising the prices on toilet paper and other trending essentials will work against your brand. In China, media, tech, and eCommerce companies have shown their support. Encourage customers to support your brand by offering your products or services to people in need, or making a donation to help healthcare workers during the crisis is a good thing to do.
Since billions of people are staying indoors, focusing your efforts on digital marketing and ranking high on search engines are logical. We understand that you are trying to cut costs, but because a number of advertisers have dropped off or curtailed their digital ad spends, digital advertising costs are hovering at a three-year low! This presents incredible opportunities for brands to drive high quality traffic at an extremely low cost.
Keep relying on digital advertising to maintain communication with your customers and create deeper connections. Customer acquisition is coming cheaper than it has in a long time. Acquire as many as you can now at the lower cost and then get them into your follow-up email marketing programs to keep them loyal to your brand.
Also, app downloads have increased as a result of COVID-19, so you should consider display advertising. As people are spending more of their time at home working and learning, they are viewing more content on Instagram, Twitch, TikTok, and YouTube, which creates many advertising opportunities.
To avoid damaging your brand reputation and create a negative brand impression, you can use AI-based tools and techniques, such as deep learning and natural language processing, to collect and analyze data that will provide a better understanding of the type of content you should push forward. That will help your eCommerce store drive more quality traffic at a low cost.
Keeping your customers is crucial if your business is struggling to deliver products due to manufacturing closures or if you are facing logistical delays or high demand for certain products. Maintain communication with your customers, so they are aware of why these delays are happening. This way, you can reduce their frustration and prevent them from looking for alternative suppliers.
Using multichannel communication will help you ensure that you can respond to their complaints or questions on time, whether it’s through social media, email, website, in-app messaging, or push notifications. Also, look to embrace other communication channels that you haven’t had the chance before to create more conversations. This communication strategy will bring your customers closer to your brand.
Diversify your supply chain
Since many eCommerce businesses are experiencing severe supply chain issues, you should use everything in your power to mitigate those problems before they worsen. Try to diversify your manufacturing and fulfillment locations. It may take you longer to diversify your manufacturing locations, while things go faster regarding the fulfillment aspect.
Supply chain managers know how risky it is to source from a single location, and with the current crisis, businesses must find ways to reduce their reliance on Chinese manufacturers (which play a dominant role in the global manufacturing network). Move toward localizing your supply chain so you could be closely tied to final markets. In today’s business landscape, sourcing from multiple suppliers is the most practical approach.
Incorporate visuals and keywords relevant to the crisis
By incorporating these elements into your ads and marketing campaigns, you will manage to draw more attention to your online store. But again, you must be very careful to make sure they are appropriate. For example, don’t use visuals and keywords for products and services that aren’t related in any way. On the other hand, if you sell hand sanitizers or any other products that can help people in this situation, you get the message to your customers that you provide what they need.
For example, when creating campaigns, use helpful messages that remind people of the importance of social distancing and maintaining their health and safety. We have no idea when things will start to return to a semblance of normal, but with the market as it is now, you should adjust your marketing to show support to your customers. That will keep your brand safe and strengthen your brand for the future.
Work on long-term investments
The coronavirus outbreak might be an opportunity to focus on making long-term investments in your business, especially if you are in B2B sales. If your business is seeing a short-term slowdown, take this time to re-evaluate your business models, processes, platforms, operations lead generation efforts and do some long-term strategic planning. If there are several big prospects in your pipeline, put more effort into lead management, and focus on nurturing your long-term opportunities. Maintain contact, check-in with them frequently, reassure them and let them know that you are prepared for contingencies. Even if the situation feels uncertain, keep nurturing your leads with the long view in mind.
Chinese businesses are already in the post-coronavirus recovery mode, and a lesson we can take from them is that our recovery might be faster than people expect. Cutting back too far today prevents you from capitalizing on the post-crisis economic recovery. Of course, reducing the spread of the virus and staying healthy is our top priority right now, but businesses need to survive as well. Taking the right precautions today will position you to bounce back stronger tomorrow when everything is over.