After COVID-19 – The Future of Ecommerce

by | Jan 13, 2021 | Blog

The pandemic has changed the face of retail, and those companies that were digital-ready have succeeded in consumer growth during one of the most challenging times businesses are likely to face

While digital transformation had been the goal of many businesses last decade, it is no longer a goal, it is now essential. For almost a year now, we have been shopping online for everything, from milk and sugar to a new mattress. The pandemic has fundamentally changed retail.

No longer are shoppers able to ‘pop to the mall’ for their essentials, now it’s all about home delivery. While this has obviously been a boon for Jeff Bezos, who was reportedly making about US$3,715 a second, or US$321 million a day. The largest single-day increase in Bezos’s net worth is US$13 billion, which he achieved on July 20, 2020, 51 years since man first walked on the moon (which cost US$156 billion at today’s inflation rates, or 12 times Bezo’s record net-worth increase.) His company, Amazon, has been a lifeline for many people worldwide, delivering consumer goods as well as entertainment online.

While Amazon was already delivering on a promise of easy online shopping and original content entertainment, other retailers were far from having the capability to quickly transform from brick-and-mortar retailers to exclusively online. According to the US Department of Commerce, many retailers’ sales were still in-store — 84 percent vs. 16 percent online. When the pandemic forced lockdowns, it meant that brands had to quickly rethink how to capture that 84 percent who were now without a way to access their products.

While some brands, notably athleisure wear, saw a major increase in sales, others, such as luxury goods, slumped. As we face the challenges of 2021, with a fatigued global population who are craving any form of ‘normal’ after almost 12 months of limitations on movement, socialization, and entertainment, it is those companies who invested in digital transformation that will continue to see success.

Strong customer engagement, in B2B as well as B2C sales, will see those who have made a successful transition to online relationships will fare better than those who have resisted (or not understood) digital transformation. The changes are here to stay, and this is why:

  1. Never before has it been so easy to access everything you need from your lounge room. With most people under stay-at-home requests from central governments, and working from home meaning that you aren’t just picking up the milk on the way home, we’ve all come to rely on home delivery, and the convenience has been addictive. For many people, the additional small delivery fee is worth not having to go to the grocery store and face the zombie horde.
  2. Second and even third waves of the pandemic in many places is forcing people to stay home, and further ingraining fear. While this is not a positive for mental health and societal wellbeing, it is great for online retail.
  3. Never before has it been so easy to access everything you need from your lounge room. With most people under stay-at-home requests from central governments, and working from home meaning that you aren’t just picking up the milk on the way home, we’ve all come to rely on home delivery, and the convenience has been addictive. For many people, the additional small delivery fee is worth not having to go to the grocery store and face the zombie horde.
  4. Second and even third waves of the pandemic in many places is forcing people to stay home, and further ingraining fear. While this is not a positive for mental health and societal wellbeing, it is great for online retail.
  5. Intensified online competition is seeing better discounts, loyalty offers, and other benefits that favor customers. Brands are working hard to hook customers and fast or free delivery or massive discounts seem to be working.
  6. Distribution companies are experiencing an overwhelming demand for last-mile and contactless package delivery. This means that the speed of innovation is likely to accelerate too. With consumers needing everything from hot meals to paperclips to live and work from home, delivery services have become an even more essential service.

While the pandemic seems to be favoring customers, there is good news for businesses that are thinking long term. From payments to travel, dining to entertainment, things have changed, and probably for many years to come. People are unlikely to fast forget the implications of the pandemic, even when vaccinations reach optimal levels. While some consumers will see the benefits of doing everything online, including work, others will want to reshape their world completely. For those eCommerce merchants who are ready, it will be a time of great opportunity.

  1. Contactless payment will continue to become increasingly popular with a push towards cashless transactions.
  2. The travel industry is likely to see huge short-term growth as people travel to see family and friends, as well as resume leisure activities.
  3. Sustainability and environmentalism will become more important brand commitments as the effects of climate change, pollution caused by the pandemic, and political factors force people to be more conscious of their choices.
  4. Delivery and logistics are expected to slump post-pandemic as people gravitate towards shopping in person. This slump will be temporary as the ‘new normal’ settle and those who enjoy the convenience of online shopping find a balance between online and offline interactions.
  5. More companies will look to invest in AI/machine learning to run their supply chain.
  6. A boom in entrepreneurs innovating the supply chain sector is expected as they create ways to make logistics faster and smoother for companies and consumers.