The coronavirus pandemic will accelerate the digitalization of the global economy, and this March showed the importance of online sales. With the growing awareness of the risk of infection, the closing of schools, and the increase in the number of countries imposing movement restriction measures, many customers have started to turn towards online purchases. Here are some e-commerce reflections on the COVID-19 economy.
New normal for e-commerce
Before the arrival of COVID-19 in Spain, the penetration of cross-border e-commerce ranged between 5% and 40%. As the weeks of confinement passed, the market grew at a sustained rate, and is now at levels similar to those of the United Kingdom and Germany.
As with any crisis, businesses must adapt to these rapidly changing market conditions and make adjustments to their marketing and operating models to best serve their customers.
Omnichannel will become crucial for businesses
The current health crisis will result in a rapid inflow of sales and marketing investment to online channels (online stores, mobile applications, marketplace). Establishing a synergy between the online and physical retail channels – the so-called omnichannel – will become crucial. This is because customers want to be able to move seamlessly across all channels, without limits.
Companies will have to re-optimize a large number of internal processes. Specialized employees will suddenly become “omni-workers” engaging with clients in a variety of roles. The implementation of omnichannel technology will be a necessity.
Also, an enhanced and simplified customer experience offered by omnichannels has a number of important payoffs. In particular, they lead to a closer relationship between customers and brands, lower price sensitivities, increase in returning business and customer loyalty, thus creating overall long-term value for customers. A business that is able to diversify its channels also reduces their risks by not having to rely on a single channel. The omnichannel approach can increase productivity and efficiency by funnelling resources into growing channels. Additionally, this approach also creates flexibility, allowing for new or trendy sales channels to be easily incorporated into a company’s omnichannel strategy.
The logistical challenge
What seems like good news for online stores, may pose a headache in logistics. A strong increase in sales leads to a greater number of orders to manage and deliver, which can overwhelm the unprepared.
To avoid drowing in perceived success, it is important for businesses to have an impeccable inventory management system and supply chain that is capable of managing deliveries with the greatest efficiency.
To face up to this unique challenge, it can be the best time for businesses to implement software that helps them to automate these management processes.
Ecommerce in the COVID-19 economy: Final observations
While the current situation is rapidly evolving, the suggestions may become outdated at the same pace as the development of the pandemic. The question is what lessons can be drawn in the context of e-commerce.
The COVID-19 pandemic has made it clear that e-commerce serves as an important and accessible channel for consumers in times of crisis. It is also a vital economic driver and saviour for small businesses. The pandemic has highlighted not only the importance of digital technologies in general, but also several vulnerabilities across the world. The recent commentary from the World Trade Organization raises some salient points, for example:
- What type of e-commerce solutions can we implement, and how can we implement them, to enable fast and secure cross-border movement of goods and services, and consequently to help economic recovery and job creation after the COVID-19 pandemic?
- Network capacity and higher bandwidth services are crucial, not only during the pandemic itself, but also for e-commerce and economic inclusion in general. More importantly, they have demonstrated an important role in the delivery of essential services and resources to the less-connected communities during the global crisis.
What you do today will decide how well you fare in the future.
At Orienteed, we’re ready to help you take on the challenges ahead.