Impact of COVID-19 on eCommerce

Impact of COVID-19  on eCommerce

Enterprises across the world are navigating through uncertain times during the ongoing COVID-19 crisis. The impact of the pandemic has been surfacing itself in multiple ways for different businesses; with some changes transient but some changes seemingly a tectonic shift in approach and consumer behavior. The eCommerce sector is no different. As people across the globe manage their health and safety priorities, they are also coming to terms with new normal work from home and also the way they do product research and shopping. eCommerce finds itself in an interesting crossroad: physical footfalls into retail outlets have dwindled to almost zero as people are still wary to venture out. While this presents an opportunity, there are challenges as well. Let us look at it from the below four lenses:

1. Shift in consumer research and purchase online:
this trend is already strongly observed in categories like grocery, medicine, and household consumables.  Daily needs of human life are very much in demand and the pandemic has triggered a huge adoption of online commerce in these segments. A case in point is the meteoric rise of Instacart in online grocery. The US e-grocery player seemingly grew by more than 5X between Feb to May 2020 and has a higher online market share than even Amazon and Walmart. And this was driven without any additional effort on ATL marketing. A scalable online business model is poised very well to engage customers, provide them relevant online information, and drive sales. Continually evaluate which items or categories can “talk more “to customers in these times and be part of their cart. Product categories like health and safety for example. Similarly, startups like Capsule have grown significantly in online medicine delivery. While there may be panic buying, in the beginning, it’s more influenced by “related and interconnected” buying in the social/digital world. Fundamentals remain the same: eCommerce need to have the right selection, and a smooth customer journey to research, purchase, and delivery. More on the delivery part later!

 2. Continuous engagement with customers, people, and partners – Customer experience is critical and eCommerce has to play a bigger role in enabling choice and selection. For example, people are still big on “online fashion therapy “but are looking for easier ways to know the fit of an apparel 360 deg and have more colors in casuals (the trend post-pandemic). Subscription services can have a huge potential to retain customers, give them confidence, and attain high LTV. While we all ensure the safety and wellbeing of our people and partners, we also have to communicate with customers with reassurance. New categories, wider design choices, revised communication strategies with personalized inputs are important to stay close to the pulse of the customer. For marketplaces like Amazon and Instacart, partner networks and selling merchants are equally crucial. Safety standards, PPE, and testing kits would need to be administered to drivers, warehouse executives, and their pay models have given adequate thought to drive retention and credit lines/platform fees appropriately revised for merchants. BOPIS (Buy Online and Pick in Store) could also be explored more in the coming quarters.

3. Razor-sharp supply chains and analytics rigor – It’s super important for the eCommerce sector to now be “surgically sharp” about their delivery and supply chain process.  Analytics and technology need to be used to keep inventory levels optimal based on consumer behavior. Due to uncertainties in delivery, COD orders for customers and Pincode wise delivery capability needs to be pre-checked based on customer attributes and logistics partner attributes. This will help reduce return rates. Similarly, intelligent use of design patterns and interchangeable fabrics schematics in fashion can drive reduced inventory levels and material costs.  The eCommerce sector would need careful evaluation and build redundancies of suppliers and logistics hubs to reduce material holding costs and delivery timelines.

4.  Restructured business plan to target GEN Z and Millennial: The pandemic times also stress test business models and operational planning while attracting new age group youthful customers to the fold.  Ecommerce has been constantly innovating online touchpoints with customers, looking at creating required agile capacities and iteratively using technology to understand how to appeal to the Gen Z psyche. They care as much for value for money as much for sustainability and as much for casual style. Similarly, the older Gen X and Baby Boomers can get introduced to eCommerce in these times, and while there can be socially influenced and health-oriented buying, the basket size can grow as confidence builds. Contactless delivery and safe, sustainable packaging will also be important.

Times are challenging but not without opportunity for the eCommerce sector. However, razor-sharp execution and staying close to the pulse of the customer will be two single biggest factors in 2020-2021.


Inputs by Durga Dash, COO – Styched, a Bangalore based startup & India’s first only eCommerce Fast Fashion brand. 

HelloPost Team

HelloPost Team takes an opportunity to help your business adapt and succeed in the changing marketplace. We are committed to sharing perspectives, insights, analysis, and trends that challenge and inform others within the industry.

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