Since the outbreak of the Covid-19 pandemic, people all over the world have relied heavily on e-commerce to buy everything from necessities to holiday presents. The pandemic boosted the adoption of online sales and purchase by customers and companies almost overnight, thanks to widespread stay-at-home orders and concerns about the coronavirus pandemic.
As lockdowns became the new way of life, customers and companies gradually “went digital,” delivering and buying more products and services via the internet, sparking off increased demand for more goods, innovative marketing strategies, resulting in a boom in online sales and accelerated digital transformation.
A study by Australia’s Consumers Association found that “new customers” accounted for nearly 50 percent of online sales since March 2020.
What began as a crisis response has evolved into the new standard, with huge consequences for how buyers and sellers transact business online.
Perhaps the best examples of how COVID accelerated online sales can be found in A new report: COVID-19 and E-Commerce: A Global Review, published by UNCTAD and eTrade for all partners. The report reflects on the powerful global and regional industry transformations recorded throughout 2020.
- E-commerce is gaining traction around the globe, with customers in developing economies leading the way.
- In the second quarter of 2020, Latin America’s online marketplace Mercado Libre, for example, sold twice as many goods per day as it did the previous year. While Jumia, an African e-commerce website, announced a 50% increase in transactions.
- Between August 2019 and August 2020, China’s online retail sales share increased from 19.4 percent to 24.6 percent.
- The online share of retail sales in Kazakhstan rose from 5% in 2019 to 9.4 percent in 2020.
- In only one week in March 2020, Thailand saw a 60 percent increase in shopping app downloads.
- The upward trend in e-commerce adoption seen in 2020 is likely to continue throughout the recovery.
The choice of goods consumers are looking for online has also changed with sales merchandise doubling over the past year.
Why COVID accelerated online sales?
Two reasons explain why COVID-19 has accelerated a tectonic change in online sales
- Product accessibility—shopping online has given customers access to a variety of companies and goods that would otherwise be difficult to find.
- Safety – consumers have been able to restrict their exposure to COVID-19 by shopping online safety concerns have been particularly noticeable in high-risk populations.
Online Merchandise sales spike
The types of merchandise that are purchased online are evolving as people make purchasing decisions based on the current pandemic and post-pandemic situations.
Nielsen, a market research firm, has established six main types of merchandise that are getting more hits online.
Products related to health and safety.
Anyone who has seen empty shelves or price gouging on the internet knows that health and safety items are being bought much quicker than they can be manufactured and restocked. According to Nielsen report, sales of hygienic and medical masks have increased by more than 300 percent.
Shelf Life stable goods
Shelf life-stable merchandise are on high demand especially by consumers preparing for a long-term quarantine. Shelf-stable milk and milk substitutes particularly oat milk have seen a 300 percent increase in dollar growth, according to Nielsen. Other foods that have seen an increase include dried beans and fruit snacks.
Food and beverages
Sales of groceries in general are up, aside from long-term quarantine products. However, there have been some cultural shifts in the way people shop for food. Many people, for example, opt for click and collect or delivery options to reduce crowds at supermarkets. Downloads of apps like Instacart and Shipt, which enable people to order groceries online, are on the rise.
Although it is less about the urgency of preserving and feeding oneself, it is unsurprising that as people become more homebound and stop seeking out external entertainment outlets, digital streaming services have grown in popularity. Streaming platforms like Netflix, Amazon, Hulu, and Disney+ experienced unusually high subscription growth in the first quarter of 2020.
Although sales of the goods and services mentioned above are growing as a result of the COVID pandemic, industries like are restaurants, and travel are not faring as well.
Fashion and apparel
The demand for fashion and apparel has been rather low as people shift focus to buying the daily essentials.
What does the accelerated increase in online sales mean for businesses and consumers?
The increase in online sales triggered by COVID-19 has three implications as outlined below.
- It implies that a larger consumer base, which results in a scarcity of certain products and surpluses of others.
- It means that manufacturers and resellers are looking for ways to fulfill the demands of a larger consumer base.
- It means a consumer base whose top priority is to receive the cheapest goods online.
COVID has triggered a significant acceptance of online sales as the new norm. However, as both wholesalers and retailers compete for a greater share of the online consumer market, competition will heat up. This implies that providing an optimized ecommerce experience for sellers as well as a buyers shopping path that is free of competitive distractions, will be critical.
While the future is uncertain in several ways, the pandemic is almost certain to have a long-term impact on retail space. Therefore, wholesalers and retailers must optimize their ecommerce journeys and ensure that they have the right solutions in place.
Wholesale2b has a team of experts who are ready to assist you put together strategies to improve your online sales strategy.
Contact Wholesale2b today to speak to our team of experts.