The Impact Of Covid-19 On Online Shopping - Our Analysis

The Covid-19 pandemic has accelerated the people's shift towards a more digital world. So we are discussing the impact of Covid-19 on online shopping that are likely to have lasting effects

Published On: 2020-11-11

Blog Category: Shopping

Written By: Muhammad Umair Malik

The global Covid-19 pandemic outbreak has had a significant effect on all aspects of life; it includes the way people shop. The Covid-19 pandemic has fast-tracked people's shift towards a digital world and triggered alterations in consumers' online shopping behaviors. It seems likely to have more lasting effects, especially after the recent new corona wave.

It will not be an understatement to say that the Covid-19 pandemic has changed online shopping behaviors forever. According to a survey by UNCTAD of about 3,700 consumers of nine emerging and developed economies, entitled 'COVID-19 and E-commerce', there have been some interesting changes in how consumers use online shopping and digital solutions. The survey covered China, Brazil, Germany, the Republic of Korea, Italy, Russia, Switzerland, South Africa, and Turkey.

According to Secretary-General Mukhisa Kituyi UNCTAD, i.e., United Nations Conference of Trade and Development

'The corona pandemic has accelerated a rapid shift towards a more digital world. The changes or alterations we make now will have long-lasting effects as the world economy begins to recover,'

How Covid-19 changed people?

Covid-19 changed the world

The Covid-19 pandemic created new, unfamiliar realities that people needed to accept quickly. People suffer a lot from frequent hand-washing to embracing face masks and travel limitations to business shutdowns. This has changed their behavior the way they move, live, and the way they spend.  Remote work and quarantines led to income cut off for many. It is needless to say that a health and economic crisis of this magnitude results in creating new consumer preferences, shopping patterns, and consumption trends.

E-commerce and pandemic

ecommerce revenue increased during pandemic. source: Market realist

Various e-commerce sectors get benefited from the new circumstances amid the Covid-19 pandemic. But also some have been shaken by an unusual situation. The new Covid-19 pandemic wave now has forced brands to swivel their e-commerce strategies for 2021 and cope with consumers' continually shifting behavior immediately. We have some stats from different resources that we are listing below to insight into how the Covid-19 correlates with E-commerce. Here are some of the latest stats: 

According to Merkle:

People spend 12% more time with digital this year and mostly 10% more time spent on mobile phones. It will likely grow. 

It is estimated that 79% of consumers will continue to spend more conservatively in the coming months. That is the reason you see various mega shopping sales events like early Black Friday. 

According to Influencer Marketing Hub:

11% of brand advertisers expect that COVID-19 will significantly impact their ad spending in the last two months of 2020. Also, 68% of advertisers see COVID-19 to impact their ad campaign spending into 2021.

According to Bazaarvoice:

The survey result shows that 62% of consumers prefer to shop online more now than ever before. 

According to Reuters:

People are less likely to visit stores, and in U.K. stores, the week of October sees 3.5% less foot traffic.

So it is evident that people are really scared of leaving their houses and shop in-stores. And since its lockdown, they are online on nearly all digital mediums. So, retailers are making their e-commerce game more strong to target through digital means.

Also, the factor of restriction and S.O.P.'s by stores are letting people use online methods to shop.

Shopping behavior in Covid-19

shopping behavior in covid-19

Covid-19 becomes the best example to understand the shopping behavior of consumers. As soon as W.H.O. officially declared a pandemic and news of COVID-19 spread, people’s stock up necessities. They panic buy medical supplies such as hand sanitizers, masks, and household essentials like bread and toilet papers. 

It resulted in both brick-and-mortar and online stores to struggle in keeping a balance between demand and supply. That is why price gouging for essential supplies became rampant. Brick-and-mortar 

There are the following reasons for that:

Every human being’s response to crises is different. When someone faces an uncertainty or risky situation out of their control, they tend to try hard whatever they can to feel like having some control.

The panic buying was a result of two things.

There was a lot of exaggeration and rumors regarding Covid-19 that bring a lot of uncertainty through contradictory information. It leads people to get over-prepared.

Secondly, the crowd mentality strikes here. Seeing people door-busting of stores and emptying the shelves, one would think of a scarcity of basic essentials. It validates the people’s decision to stock up. It’s much better to be left behind without any resources.

So the Covid-19 impact on retail consumer behavior is so strong whether they shop online or in-store. 

Retailers encouraging people to do Online shopping in Covid-19

Since it’s a 2nd wave of Covid-19 all over the world, retailers are taking every possible action to reduce their in-store crowds. It involves the steps that trigger the habit of shopping online as Covid-19 impact on retail consumer behavior is high. Obviously, people need to shop, and keeping that in mind, retailers come up with the following solutions to increase customer loyalty. 

Buy online and pick in-store option

Buy online and pick in-store

BOPIS or BOPUS (Buy online, pick up in-store) surged 259% in August 2020. The offer was made from various retailers online due to the Covid-19 pandemic. But managing it is challenging indeed as there may be a rush of people waiting outside the store to pick their shopping.

However, BOPIS is the immediate satisfaction for consumers to receive their item almost immediately without roaming in the store or wait for its delivery at home. This is an especially attractive option considering delayed delivery and shipment have been significant issues for consumers during the pandemic.

According to an Adobe consumer survey, 33% of consumers have received online orders later than expected, and 30% prefer BOPIS or curbside pickup over delivery.  

Major retailers shutting down on Thanksgiving

Retailers shutting down on thanksgiving

Major retailers like Walmart, Target announced to shut their brick-and-mortar stores to avoid crowds. This means that this year there will be no rush and crowd in malls and outside stores as well. This will give the store time to refill their inventory and focus on online sales going on for holidays. 

Early holiday shopping sales like early Black Friday

This year, retailers started their Holiday Shopping sales early. As soon as Amazon announced its Prime day that had happened last month on Oct 13th and 14th, various retailers have started their holidays in competition.

E.g., Walmart announced to start its Black Friday deals from 4th November in three events online.

Similarly, Target announced to offer Black Friday deals throughout November online. 

Lowes also announcing early Black Friday deals quoted as Cyber Steal on a daily basis.

Amazon is also offering Holiday Dash deals until Black Friday.

This lure consumers to buy more and more online. Retailers are compensating for their less sales on brick-and-mortar stores through online means.

Some stats regarding online Holiday shopping

People plan to shop early for holidays

Since the Covid-19 outbreak earlier this year, retailers are throwing back to back sales and deals. And the recent addition is early Black Friday sales (Thanks to the Amazon prime day, various stores like Walmart and Target get the idea to lure customers online).

Logistics vendor Pitney Bowes Inc. and a data intelligence firm, Morning Consult, come together for a survey, and the main facts and figures are below:

26% of surveyed consumers had started their holiday shopping but not finished.

6% of consumers had already completed their holiday shopping early. 

Also, 57% of consumers expected to shop online more this year.

Pitney Bowes and Morning Consult survey 2020

 As we break down the data of Pitney Bowes and Morning Consult a bit more, we found:

52% of people have not started holiday shopping in October.

86% of online shoppers will complete holiday shopping through Black Friday and Cyber Monday sales online by the week of Christmas.

Only 14% of shoppers plan to finish their online holiday shopping during Christmas week.

Summary of our analysis

Following the pandemic, many people now prefer to shop more online frequently. Also, people are relying on the internet more for news, digital entertainment, and health-related information.

Covid-19 impact on consumer shopping behavior

Increase in the purchase of basic necessities (medical and household supplies)

Bulk buying and stockpiling to ensure fewer trips to grocery stores.

Men are likely to shop online than women.

The pandemic has affected to ⅓ of men to less consumer spending compared to 25% of women.

Proactive health-minded products such as vitamins and natural supplements are high in demand.

Purchasing of protective gear like masks and hand sanitizers are still people’s priority.

Business face challenges of:

Keeping up the balance of demand and supply for products at fair prices.

Enabling curbside pickup, buy online, pick up in-store, and monthly subscription services.

Online shopping industry trends

surge in sales during Cyber Monday and black Friday is expected

A rapid increase in online shopping and e-commerce especially during Black Friday and Cyber Monday 

People are spending on average 10-30% more online, According to Engine, 

According to Rakuten Intelligence, 2020, the increase in grocery related commerce has surged to approximately 250%.

Digital streaming services subscriptions increased.

Covid-19 will continue to impact the shopping behaviors of consumers. And they will prefer online shopping rather than walking around the aisles in-store.



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