How Covid-19 Accelerated eCommerce Growth
The Covid-19 pandemic changed many things about the world, some of which won’t become clear for years to come. One thing that is crystal clear though is that the pandemic has expedited the adoption and growth of eCommerce in Australia and around the world. What was expected to be a slow transition is almost a reality, and with this comes new challenges, yes, but also many opportunities. That’s why BLANK THEORY is bringing you a rundown of where we are, how we got here and what it means for your business.
Where Are We Now?
According to Forbes Magazine, eCommerce sales accelerated 4 to 6 years ahead of projections. Australia Post found eCommerce purchases were 24% higher in August 2021 than in August 2020, and the year-on-year growth of eCommerce is higher even in states unaffected by stay-at-home orders. 58% of consumers feel safer shopping online than in-store, meaning 10 years of eCommerce adoption was compressed into 3 months. Many industries, such as out-of-home entertainment, that were already facing radical shifts in consumer behaviour as a result of technological advancements, have not yet returned to their pre-pandemic levels. Some of them probably never will.
The rise of working-from-home has also accelerated the growth of eCommerce as, in Australia, online shopping was largely driven by people having more time to browse (75%) and being at home to collect deliveries (75%). These trends are likely to stay the same as people continue to work from home. Further, 80% of people noted they can find better deals online and save money, incentivising them to continue shopping online. What we have witnessed is a massive shift in consumer behaviour that will lead to the permanent adoption of eCommerce by many people. This is also not just affecting Australia but is a global trend seen in both developing and developed nations. The world is transforming into a digital marketplace.
How Did it Happen?
Technology & eCommerce
eCommerce, like every technological innovation, is always limited by the willingness of people to use it. People have to be comfortable using a computer for their purchases when they start doing it, and if you’ve spent your whole life going to your local grocery store, why would you change? Factors such as age, household income, and gender were, and still are, great indicators of how likely someone is going to buy something through eCommerce. But then Covid-19 came along and all those factors went out the window.
How Covid-19 Changed Everything
Covid-19 changed everything for the simple reason that people were stuck in their homes. Either through stay-at-home orders or fear of a virus that was little understood, people stayed indoors. Consumers became reliant on eCommerce to purchase everything including, perhaps for the first time, essential goods.
People who weren’t used to buying online, quickly became comfortable with it. While those who were adept at it began expanding their online purchases to the things they once bought in person, like groceries.
The pandemic increased dynamism in the eCommerce landscape as businesses adapted by adding new products to their line-up, invested in their eCommerce infrastructure, expanded their sales overseas to new markets and targeted new consumer segments in their domestic markets, such as the elderly. Many businesses were created during the pandemic to take advantage of the captive audience. The type of products that people bought also changed. Clothing became less important to consumers while things like groceries, alcohol, and home improvement materials became more in demand.
The pandemic itself is not yet over for many places around Australia and the world, and even when it is, its impact will long be felt. The outbreak of SARS in 2002 and 2003 was a core catalyst for the digital transformation of Chinese retail. The question then is, what does it mean for your business?
How Will It Impact Your Business?
The Covid-19 pandemic has unleashed four trends that you need to know about if your business is going to succeed in this new eCommerce heavy world.
Consumer Behaviour Has Changed
While it was not the original cause of changing consumer behaviour, Covid-19 has seriously fast-tracked new consumer preferences. These are, namely, prioritised convenience and personalisation, which have been increasingly prevalent for years. Consumers are now used to being able to buy anything, from any channel, device and seller they desire. This means your business is going to have to increasingly tailor its services to be as convenient and as personalised as possible. Things like quizzes that consumers can play to work out the item that most matches their needs or targeted advertising are going to become much more commonplace.
Consumers Will Be Easier to Reach
While increased personalisation and focus on optimising websites and supply chains will be difficult for some companies, increased eCommerce growth will make it easier to reach and sell to your target audience. Online shoppers are already making more unplanned purchases as businesses find it easier to reach them with more relevant ads. 16% of shoppers indicate they’ve been getting more offers from retailers they’ve previously shopped with, and 12% are saying the offers are more directed to their interests. With a top-notch digital marketing team, your business could become more successful in taking advantage of this brave new world.
Increased Competition
The most serious impact, though, will be increased competition for your business
A Shift in Business Operations
The long-term possibility of new waves of the epidemic and the convenience of new purchasing habits means more and more businesses will shift online as their consumers do. According to Tim MacKinnon, Managing Director of eBay Australia and New Zealand, ‘Consumer expectations are on the rise, and we will see more people launching online businesses.’
Further, increased learning costs and the incentive for firms to capitalise on investments in new sales channels will mean existing businesses will continue to maintain their new digital sales networks. Thus, many more businesses will be operating online than before the pandemic started.
New Competitors
The Covid-19 pandemic has increased the amount of new businesses operating online. Smaller merchants, who have relied on the infrastructure and services provided by online platforms, may turn their established online identity and experience into a long-term asset. They may be able to utilise this asset and become a powerful online business. This may require help from experts or mean building a larger team, but as eCommerce becomes increasingly dominant there will become more specialised experts that can advise them of how to grow their business.
Further, a number of businesses who have eschewed investing in an online presence have begun laying the foundations of an online sales infrastructure. Cafes, museums and gyms, for example, are now required to have online booking systems to control the number of people on their premises, and may optimise these new systems and become online businesses.
An Increasingly Globalised World
There has been an acknowledgement of a global disparity between nations and within nations when it comes to providing and accessing digital services. This has meant governments around the world are providing increased services and incentives for businesses to launch an online presence. This will increase the international competition between businesses, especially as the developing world catches up with the developed world.
Omnichannel Strategies Will Become More Important
Having an omnichannel strategy means having multiple ways that consumers can reach out and purchase things from you. Omnichannel capabilities are becoming increasingly important to remain competitive in the new post-Covid environment. Brick-and-mortar stores are unlikely to vanish completely but offering more ways for consumers to purchase and pick up products (for example, deliveries or in-store pick up) is going to become a necessity moving forward.
How to Thrive in the Post-Covid World
What it all boils down to is that if you want to do well in today’s world, you’re going to need a great website, great content and great social media. BLANK THEORY always aims for greatness with our clients, so that no matter what challenges they face, they know their digital marketing is in the right hands.