eCommerce And The Effects Of The Coronavirus (COVID-19) - March 2020
We all have serious health concerns from the recently developed Coronavirus Pandemic. But in addition to this, we wonder about what effect the virus will have on stores and eCommerce.
How does retail survive the next few months?
"As the consumer’s comfort with online shopping becomes higher and technology is more intuitive and ubiquitous, the digital side of the retail business may be stepped up at a faster rate than previous projections. " - Forbes, Shelley E. Kohan
To begin, it is important to note that eCommerce has been through similar circumstances before and remained above water. Although many brick and mortar stores suffered in 2002-2003 during the SARS crisis, eCommerce stores like Alibaba and JD.com both grew substantially, as they were able to take advantage of a surge in online shoppers and keep up with the demand at hand.
As easy as it is to point out all the negative effects of the coronavirus, there are a few signs that highlight a positive effect of the surge in the eCommerce industry:
- Based on research from last year's eCommerce sales, e-commerce should represent at least 12% of total retail sales, but with recent developments in consumer behaviour in the first quarter of this year due to the coronavirus this will impact the future quarters for 2020.
- Across North America, and all across the world it is mandatory to stay at home and to continue avoiding crowded public places. Now consumers increasingly turn to online shopping to get their essentials. Based on data from the past months in Chine, JD.com, China’s largest online retailer, has seen sales of common household items (including toilet paper, hand sanitizer, soap, tissues etc). quadruple over the same time period last year.
- The percent of digital sales varies by category of business; stores that sell electronics, entertainment, books, food, household and personal hygiene products have seen a boost of up to 40% on average over the last week. (Forbes)
How are large eCommerce retailers like Amazon handling the current situation?
"We are working around the clock with our selling partners to ensure availability on all of our products, and bring on additional capacity to deliver all of your orders." - Amazon Spokesperson
Earlier this week, Amazon announced that they will be adding 100,000 new full-time and part-time positions across the United States to keep up with the demand. In addition Amazon said it is investing more than $350 million to raise pay for hourly employees in warehouse and distribution roles through April. It will pay an additional $2 USD per hour above the base hourly rate of $15 or more.
Walmart also made a promise today, to hire 10,000 new employees for their warehouses across Canada to keep up with the demand, this on the same day over 500,000 Canadian filed for unemployment insurance.In the US, Walmart, Dollar Tree and 7-11 want to hire nearly 200,000 workers as the coronavirus pandemic continues.
Retailers like Amazon, are also trying to offer 2 hour to 2 day delivery on all orders. With the surge, it is hard to keep up, causing other brands like Costco, Walmart and Target to step up and try to offer the same availability.
What can you do, to continue having strong sales numbers and profits during this time?
"We will not raise a single price." Loblaws CEO vows amid coronavirus pandemic
Pricing and the Competitive Landscape
Amazon took down over 1 Million sellers this month for price gouging and false advertising. Other sites also had to combat the same. Start by showing your shoppers that you are honest and here for them during this time. For us at PriceMole, With automated price monitoring and price strategies, you can keep an eye on your competitors prices. When the app notices prices skyrocketing, you will be notified and can adjust your prices accordingly. A great example of this is Loblaws, making a promise to the people to keep prices reasonable during this difficult time.
Demand and Supply
This offers a huge opportunity for smaller retailers to start advertising on apps like DoorDash or Postmates or even setting up your own delivery service for a fee to meet the demand, since the large retailers are unable to keep up. You can now corner a section of the market. Keep on top of supply, by tracking your competitors. When they sell out, you can start advertising that you still have stock and can deliver!
Offer MORE information to your shoppers
Transparency is key! Let your shoppers know what you are doing to combat the coronavirus. Be upfront with them, show them what is in stock and what is out of stock. Show them you are offering fair prices and can deliver compared to your competition, through a competitor widget, new advertisements, public statements, etc.
We understand the economic impact of COVID-19 might be affecting your business and we want to help.
We are offering new users of PriceMole two months free with code PM-STRONG. Use it to track your competitors prices and stock and bring your new sales opportunities in these conditions to light! (offer valid until April 1st, 2020, one coupon per store)
Stay safe out there. In light of helping everyone stay healthy and stop the spread:
Wash your hands thoroughly
- Use soap and water
- Rub soap all over your hands and wrists for at least 20 seconds
- Rinse your hands under running water
- Dry hands with a paper towel or dryer
Cover your cough and sneeze
- Cover your mouth and nose with a tissue
- Dispose of your used tissue
- If you don’t have a tissue, cough or sneeze into your upper sleeve or elbow, NOT YOUR HANDS
- Wash your hands with soap and dry thoroughly with a disposable paper towel or hand dryer