Can eCommerce Overcome The Strain Of COVID-19?

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While it is the only option for many retailers, eCommerce is running into its own limitations under the pressure of the COVID-19 crisis. And as those limits become evident, some strategies to navigate them are also coming to the fore.

The most concerning news about those limitations comes as retailers get a handle on how and why eCommerce orders have spiked since stores started closing at the end of February. Those estimates have varied, and have not delineated between essential and nonessential retail. Listrak has reported a 40 percent jump for eCommerce since the state of emergency was declared on March 12. The increase started in February, with online orders up 108 percent year over year, according to Quantum Metric. However, average order value (AOV) decreased 31 percent, suggesting that shoppers are buying on impulse.

“We attribute the growth to lack of availability of local brick-and-mortar supplies, due to out-of-stock consumables shipped from China inventory, and an overall desire to limit in-store exposure,” said Tamara Gaffney, vice president of decision strategy for Quantum Metric, in a blog post. “It is worth noting that the growth rate spiked the week beginning Feb. 17 and has declined by the week of March 2.”

While consumers are spending on essentials like groceries and toilet paper, supply chain issues are haunting essential retail, for both brick-and-mortar stores and eCommerce businesses. “Why are we having such great shortages, and why can’t the system respond? Because you have a perfect storm,” noted Steven A. Melnyk, professor of operations and supply chain management at Michigan State University. “Most companies, when they deal with demand, are predicting it, [but the volume recently sought by consumers] was just off the scale. It was an event they had never foreseen.”

But what about nonessential goods? Sellers of nonessential goods have seen their sales drop by 40 percent to 60 percent on Amazon. And 42 percent of retailers cite concerns about consumer confidence, but they disagree about how great of an impact there will be. Nearly 60 percent believe there will be some impact, 22 percent believe the impact will be significant and 20 percent project a limited impact.

Regardless of the discrepancies in reporting, retailers need to boost their eCommerce capacities in terms of messaging as well as ordering. eCommerce sites doubled ad spend in less than a month, from $4.8 million for the week of Feb. 17 to $9.6 million for the week of March 9, according to data from MediaRadar. Advertising and/or promotions will be essential, if it’s possible within limited budgets.

GoodFirms surveyed more than 100 of the top eCommerce experts to determine the most effective tactics for small-scale online shops. The respondents placed their votes for the best strategies among four choices: content marketing, PPC ads, email marketing and social media marketing.

Around 82 percent said pay-per-click (PPC) ads attract consistent traffic for eCommerce. About 76 percent voted for content marketing, and digital marketing came in as the third most favored strategy. Another 46.62% cited email marketing as highly effective.

“As the coronavirus quarantine continues, there are a number of factors that could change how much consumers continue to shop online and the degree to which brands want to shell out for eCommerce advertising,” stated a report in Digital Marketing Industry News. “Consumers concerned about job security and the market downturn may rein in their spending and begin to define their needs versus wants, focusing on purchasing primarily their needs as self-isolation persists. And, brands concerned about possible supply chain issues may limit advertising if they can’t guarantee delivery of their products.”

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