05 Dec The Pandemic and The E-Commerce Boom
It’s become apparent that the pandemic is driving the explosion of the modern day gold rush aka the e–commerce boom. From everyday necessities to luxury goods, all transactions have shifted online. The time in lockdown is to blame for the increased sales online.
IBM’s US Retail Index says that the pandemic has accelerated the shift from physical stores to online shopping by 5 years. The report also indicates that physical department stores sales may decline by 60 percent in 2021 and beyond. On the other hand, e–commerce is projected to grow by 20 percent. This is huge progress!!
Large retailers such as Walmart and Target have embraced the Omnichannel approach. Because of their early investment in e-commerce, these giants generated stellar earnings. In the last quarter, Walmart was able to drive e-commerce sales up to 97 percent. Target managed to set a sales record as services grew 273 percent over the four quarters this year.
It was natural for Amazon to benefit from this digital shift. Its sales grew by 40 percent. Consumers are spending almost $11,000 per second on this retail giant. The quarter two report from the U.S. Census Bureau says that e–commerce retail in US has reached $211.5 billion. The pandemic has pushed the industry ahead by 5 years and it’s not slowing down! The shift was underway already because of the global lockdown. Soaring e-commerce sales indicates that shoppers like convenience. Even after the pandemic is over, they might not want to go back to physical shopping.
There have been two sides to the story in this surging online demand: drug stores, grocery stores, and other essentials businesses have benefited from the pandemic because consumers started stockpiling. Some companies have even adopted the BOPIS (buy online, pick up in–store) model. However, electronics, non-food retailers, and other businesses with no prior online presence are fighting for survival. Brick and mortar sales have nearly evaporated. Bankruptcies have started to pile up. Until a vaccine is developed, the economy is unlikely to rebound. This could take years. The only businesses that will survive are those that replace their dried–up revenue streams with an e-commerce revenue stream; it is the primary source going forward.
A key lesson to be taken away from this pandemic is that it’s time to invest in e–commerce. Early adopters will manage to secure their market share, while the laggers will be displaced quicker than they imagined.
Many small businesses who were late to the party have seen their business decimated. Having an e-commerce presence is now more important than ever and should be the primary focus. Many retailers rolled out websites without thinking about customer engagement and propositions. Overly complex designs have resulted in a dissatisfied customer experience and minimal sales. In other words, e–commerce without a strategic vision is bound to fail.
Retailers are still in the process of learning how to design their e–commerce channels. Consumers, on the other hand, are ready for the future. Waiting for the pandemic’s dust to settle to embark on the journey of digital transformation and creating an e-commerce strategy, could crush your business. The movers and shakers will Fast will leapfrog the competition, in this economic boom. The key to surviving and thriving in these unprecedented times, is to get your ass into the economic goldrush of e-commerce.
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