A Rising Trend in New E-Shops Since the Beginning of the Pandemic

by Mladen Maksic | Jun 08, 2022

The pandemic has forever changed shopping behaviors. Many people shifted to shopping online more frequently and relying on the internet for health-related information, news, and digital entertainment.

COVID-19 has encouraged the shift towards a more digital world and will have lasting effects as the world economy recovers. That said, the acceleration of online shopping highlights the importance of ensuring all regions can benefit from digitalization as the world heals from the pandemic.

COVID-19 Online Shopping Trends

The digital economy boomed during the pandemic. People turned to online shopping more than ever before as they welcomed social distancing. Now, 67% of consumers say they buy differently because of COVID-19.

Merchants started adopting online sales and welcoming technologies that have formed connections with consumers or improved their customer experience.

An Accelerated Shift Toward Digital Adoption

The pandemic has considerably accelerated digital adoption. Digital buyers increased in most counties. Data show significant growth rates in most regions, from the United States to Europe, Africa, and the Middle East, transforming consumer behavior and business operations.

Online sales are a necessity rather than an option for brick-and-mortar companies. The pandemic has caused a shift of demand toward digital trade that is likely to continue in the future.

Several new platforms gained importance in emerging markets of Asia, Latin America, and Africa, embracing new business standards and helping those regions become more competitive.

For instance, in Brazil, an enterprise called Compre Local enables consumers to find and purchase items from small businesses in their communities using a simplified payment method. We are still to see how many of these initiatives emerging during the crisis will become feasible in the long run.

The Significance of Omnichannel Strategies

Now, consumers enjoy having options in the way they choose to do business with you. Although many see in-person and online shopping as separate and even competitive models, in reality, they are merging increasingly. That means that even consumers loyal to in-store shopping will find it tempting to buy online.

For example, Amazon has tested brick-and-mortar retail by opening retail locations in several cities, including New York, Los Angeles, and Seattle. Meanwhile, Alibaba has opened up retail spaces in China.

At the same time, Walmart is boosting its online presence. Customers can order online and pick up the items at the store to bypass waiting in line. This trend is becoming more employed by other chains too. Shoppers can now choose between in-person and online shopping or combine the two.

Some brick-and-mortar stores, such as Kohl’s and Macy’s, are finding creative methods to combine offline and online shopping. Kohl’s has an in-store kiosk that allows customers to check inventory, reviews, prices, and other information. Also, it enables ordering items that are unavailable at a particular shop. On the other hand, Macy’s now has an app that lets customers browse online, access shopping history, pick up orders, and more.

Smaller and new businesses can also provide convenient services such as online shopping merged with in-store pickup. Keep in mind that if you have a brick-and-mortar business, the digital experience can enhance both online and in-store commerce.

Online Purchases Grow, but Consumer Spending Drops

A survey shows that online purchases have increased by 6 to 10 percentage points in most product types. The most significant gainers are pharmaceuticals, cosmetics, education, ICT/electronics, and furniture/household products types.

Nevertheless, average monthly spending per customer has declined considerably. People in both developed and emerging economies have delayed larger expenditures. Those in emerging economies have focused more on vital products. Travel sectors and tourism have experienced the steepest fall, with average spending per customer dropping by 75%.

Online shopping expansion during the pandemic differs between countries. The most significant increase is noted in Turkey and China and the weakest in Germany and Switzerland, where people were already shopping online at large.

The survey shows that women and individuals with tertiary education increased their online buying more than others. Also, people aged 25 to 44 reported a more significant increase than the younger population. Moreover, small retailers in China were more prepared to sell their products online, while merchants in South Africa were least ready.

Enterprises that place e-commerce at the center of their business strategy are ready for the post-pandemic era. There’s a tremendous opportunity for industries still more used to in-store shopping.

In the post-pandemic era, the remarkable growth of e-commerce will disrupt both national and international retail organizations. For that reason, policymakers should embrace tangible measures to promote e-commerce adoption among small and medium-sized companies, form specialized talent pools, and draw international e-commerce investors.

Pharmaceuticals and Groceries on the Highest Demand

Another survey of U.S. consumers shows a detailed breakdown of the shift to online shopping and the types of products and services they are buying. There has been a 15 to 30% increase in consumers who purchased online a wide range of product categories, led by groceries, medicines, personal care, and household products. Consumer intent to buy online continues to grow post-COVID-19 crisis, especially in essentials and home-entertainment categories.

A Reduction in Brand Loyalty

With consumers shopping online, there has been a significant decline in brand loyalty. 75% of U.S. consumers have tried a new shopping behavior. Over a third of them have tested a new brand.

Partially, that is due to popular products being out of stock as supply chains became strained at the pandemic’s peak. Nonetheless, 73% of customers reported they would continue to search for new brands.

Social Media Sales

Several social media platforms used higher online retail demand by including more commerce features, allowing customers to browse and buy products without leaving the platform. Typically, these platforms are integrated with e-commerce platforms so companies can easily advertise their products in several places.

Although social platforms can contribute to total retail sales, it’s not only through shopping. Most Millennials and Gen Z’s believe social media platforms are better spots to learn about products than online search.

Fluctuations Affect Consumer Behavior and Supply Chains

The instability of the pandemic and the ways it impacts our shopping habits will likely continue. Spikes in virus cases in particular regions may temporarily increase online orders and the need for home delivery. In other areas, COVID cases may reduce, growing in-store sales.

Online and omnichannel shopping will continue to spread through the retail world, particularly oriented to customers with a reduced-contact mindset. Pandemic disruptions are affecting supply as well. Fluctuating demand in the U.S. is pushing shipping demand, obstructing ports. However, the pandemic has led to port lockdowns, resulting in a decrease in shipping capacity.

Post-Pandemic Commerce Is Omnichannel

Retail e-commerce will continue to expand through 2023. In-person shopping is coming back too. Moving forward, choosing between brick-and-mortar stores and online sales won’t be a solution. Instead, retailers will have to offer a captivating omnichannel experience.

Retailers should expect frequent disruptions and be ready for the increasing swings in inventory because of the shifts in customer demand.

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