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COVID-19's IMPACT ON E-COMMERCE / ASHTONNE PACKAGING

COVID-19's IMPACT ON E-COMMERCE / ASHTONNE PACKAGING
Bill Madl November 19, 2020

THE PRESENT:

The COVID-19 crisis accelerated an expansion of ecommerce towards new firms, customers and types of products. It has provided customers with access to a significant variety of products from the convenience and safety of their homes, and has enabled firms to
continue operation in spite of contact restrictions and  confinement measures. 

Despite persistent cross-country differences, the COVID-19 crisis has enhanced dynamism in the ecommerce landscape across countries and has expanded the scope of e-commerce, adding new firms, consumer segments (e.g. elderly), brands, and products (e.g. groceries). Meanwhile, e-commerce transactions in many countries have partly shifted from luxury goods and services towards everyday necessities, relevant to a large number of individuals. Some of these changes will likely be of long-term nature, this due in part to possible new waves of the virus, convenience of new purchasing habits, learning costs and the incentive for firms to capitalize on investments made in their new sales channels.

The effect of the COVID-19 crisis on e-commerce is not uniform across product categories or sellers. In the Unites States, for example, a surge in demand was observed for items related to personal protection (e.g. disposable gloves), home activities, groceries or ICT (information and communication tech) equipment, while demand dropped for items related to travel, sports or formal clothing (e.g. suitcases, bridal clothing, gym bags, etc.) (OECD, 2020)

Despite the efforts of some governments to foster ecommerce during the COVID-19 crisis, persistent digital divides imply that not everyone has been able to participate. For firms, policy makers should reduce regulatory uncertainty to support the creation of innovative business models, e.g. in the context of an increasingly complementary relationship between offline and online sales strategies. Governments also need to address the particular need of small to medium enterprises, including by ensuring a fair playing field in the context of intermediated services (e.g. online platforms). Ensuring sufficient competition in the retail sector and a well-functioning enabling environment for e-commerce, including communication services, logistics or trade, is also crucial.

FACTS AS OF 10-15-2020:

                Online shoppers during covid 19           Online shopping with laptop

Online holiday sales are expected to reach as high as $196 billion between November, December,& January. What about after coronavirus subsides, though?

  • Stay at home orders impacted over 308 million Americans; many unemployed and business closed.
  • 72% of consumers use mobile devices for online shopping.
  • 28% say they will continue to shop mostly online after the pandemic, with 39% saying they will shop both online and in-store, 24% saying they “can’t wait” to shop in-store, and 10% not sure.
  • 64% of shoppers surveyed want mobile and contactless pickup options, with 79% saying contactless store pickup is very important.
  • 60% want curbside pickup options. 85% of shoppers have significantly increased their use of the curbside pickup option over the course of the pandemic.
  • 90% of consumers prefer home delivery over a store visit, 80% are likely to use digital communications with store associates, and only 28% plan to increase in-store shopping between August 2020 and February 2021.
  • 36% of consumers shop online weekly today since the rise of the covid-19 pandemic, up from 28% pre-pandemic, this according to new data from DIGITAL COMMERCE 360.
  • Retail and food services sales between February and April 2020 were down 7.7% compared to the same period in 2019. However, sales increased for grocery stores and non-store retailers (mostly e-commerce providers), by 16% and 14.8% respectively.
  • The share of e-commerce in total retail had only slowly increased between the first quarter of 2018 and the first quarter of 2020 (from 9.6% to 11.8%), however it spiked to 16.1% between the first and second quarter of 2020.
  • Amazon sales were 26% higher in the 1st quarter 2020 than in the prior year, but it's total share of e-Commerce sales dropped from 42.1% to 38.5% during this same period. Market share lost to both Walmart and Target led to this drop, with the inference that brick and mortar benefited from the ability of consumers to pick their product up very quickly and conveniently.
  • 88% of customers expect companies of all kinds to accelerate digital initiatives due to the pandemic.
  • 83% expect retailers to provide flexible shipping and fulfillment options such as buy-online-pick-up-in-store.
  • 60% said COVID-19 is changing their relationships with technology.
  • 61% to spend more time online after the pandemic than before it hit.
  • 68% said COVID-19 elevated their expectations of companies’ digital capabilities
  • E-commerce share of total retail spiked 16% from 1st to 2nd quarter this year!
  • U.S. retailers online year-over-year revenue growth is up 68% as of mid-April, surpassing peak of 49% in early January!

THE FUTURE:

For individuals, e-commerce enables physical distancing while retaining access to the full product variety. While e-commerce in the past for many consumer groups was centered on high tech goods, toys or books, it now increasingly involves goods for which availability is critical to a large share of the population, including groceries, medicine and other necessities. E-commerce has further enabled continued access, either online or physical, to certain areas of public life, such as concerts, museums or swimming pools, including by efficiently allocating time-stamped tickets to avoid overcrowding. Similarly, for many firms, e-commerce is now a vital alternative or complementary sales strategy, allowing continued operation in spite of contact restrictions and other confinement measures. 

Some of these changes in the e-commerce landscape will likely be of a long-term nature, in light of the possibility of new waves of the epidemic, the convenience of the new purchasing habits, learning costs and the incentive for firms to capitalize on investments in new sales channels. Also, 58% of consumers said they expect to do more online shopping after the pandemic than they did before it and 80% of business buyers surveyed expect to do more business purchasing online in the post-pandemic era, compared with the pre-pandemic period. All the data, as noted above, and in many other periodicals and documented consumer surveys, support the fact the e-Commerce is growing, with or without the impact of  Covid-19. We need to identify the best way to utilize this market segment and ensure our unique products and services benefit from repeat sales. 

E-Commerce and retailer's supply chain, order management and fulfillment systems are all being tested by the triple-digit order and revenue growth going on today. Consumer's changing behaviors to opt for more time saving and convenience, is putting a considerable strain on e-Commerce and retailers today. Businesses need to meet customers where they are comfortable shopping - including online and social media channels - and accept the payment types they want to use, including countless smartphone-based options like QR Codes, Apple Pay and Google Pay. Retailers don't have as much physical proximity like they used to have with consumers in their brick and mortar stores, so social media is essential to both connecting with them and moving merchandise.

WHY ASHTONNE:

At Ashtonne Packaging, we are life-long experts in custom-designed e-Commerce and Retail packaging and helping customers get their unique products to market with sustainable and creative packaging. Ashtonne Packaging focuses on helping our customers execute their packaging through a variety of services. Included, but not limited to:

To better understand the changes taking place with e-Commerce shopping due to covid, and what to expect after covid, give us a call and let's discuss your challenges or the opportunities to outpace your competition! We have a complete solution to help support all your packaging needs!

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