What The Coronavirus Means For eCommerce & What Your Business Can Do About It
Over the past couple of weeks, we’ve witnessed a lot of changes. In an attempt to slow the spread of the novel coronavirus (COVID-19), state governments have taken some dramatic measures, closing schools, banning public gatherings, and temporarily closing the dining areas of bars and restaurants.
During such an uncertain time, many business owners are wondering what impact this virus will have on their businesses. In eCommerce, in particular, there are mixed worries. While some sellers are concerned about selling out of high-demand products, others are worried about supply chain, or that they won’t be able to ship their products to an anxious nation.
In this article, we’ll be explaining a few of the eCommerce trends and concerns related to COVID-19. We’ll also be giving some tips and resources to help you stay profitable and safe during this time.
How Coronavirus Is Affecting The eCommerce Industry
Let’s first take a look at a few of the ways the coronavirus is affecting online sellers.
Increase In Sales
Already, we’ve seen consumer buying habits shift during this crisis. First, hand sanitizer vanished from shelves. Then it was toilet paper. Now, following guidelines to practice social distancing, many people are staying at home. Instead of tackling the crowds at grocery stores, many consumers have taken their shopping online, purchasing household goods like cleaning products, medical supplies, paper products, and shelf-stable foods.
There is some evidence that online sales will increase during this crisis. Sales on grocery delivery services such as Amazon Fresh and Instacart almost quadrupled between March 12th and 14th compared with the same period last year (Rakuten Intelligence). And according to research from Marketing Land, this year online spending is supposed to reach 12% of total retail spending (up from 11.4% in Q4 2019), depending on the virus’s impact on the economy. As more people turn to online shopping, you can expect to see an increase in sales among some industries.
Possible Delivery Changes
With an influx of online orders, it is possible that there will be changes and delays in shipping times. A surge of packages could overwhelm shipping carriers’ abilities. In response, Amazon is currently offering customers the option of choosing No-Rush shipping to allow Amazon to serve customers with the most urgent needs first.
Worries about shipment times are further complicated by Amazon’s recent announcement regarding Fulfillment By Amazon. On March 17th, Amazon announced its plan to serve customers by placing a hold on warehouse deliveries. They are currently only accepting deliveries of household staples, medical supplies, and other high-demand products. This rule will be in place until April 5th at the earliest. This rule could be a major obstacle for some sellers who usually rely on Fulfillment By Amazon. Amazon states that if your inventory runs out in their warehouses, you can continue to sell on their platform, but you must organize delivery of products on your own.
Concerns About Supply Chain
We have already seen the coronavirus disrupt the supply chain. Ever since the virus began to ravage China, it has closed down many manufacturers, leading to significant delays in shipments, even as Chinese factories begin to reopen. Now, concerns are turning to other global factories. According to research by Statista, 44% of the American retailers who participated in one survey expect to face production delays, and 40% expect to have inventory shortages throughout the year.
Changes In Industry Demand
While some industries may see an increase in sales, others, like salons and services, may see a decrease because of social distancing. Below, we’ll mention trends we expect to see among some eCommerce industries:
- Fashion: Fashion purchases related to travel (i.e. swimsuits and luggage) will likely decline.
- Health & Wellness: Spending on health and wellness products have already increased, especially on products directly related to reducing the spread of the virus (face masks) or handling its symptoms (cough medications).
- Household Goods: Online purchases of household supplies such as detergents, foodstuffs, paper products, and cleaning supplies are expected to increase as consumers limit their time spent in public.
- Books & Movies: Purchases on books and movies, especially on digital streaming, are expected to increase.
Take a look at the graph below (courtesy of Statista), which illustrates what retailers expect to happen as a result of the coronavirus:
8 Tips For eCommerce Business During COVID-19
Despite all of the difficulties that the coronavirus has brought, merchants are still pressing on. Here are a few of the strategies that other merchants are using right now to deal with the uncertainty of the current times.
Take A Deep Breath & Create A Plan
I encourage you to take a minute to step away from the constant stream of media. Go on a walk, and take a few deep breaths. Good decisions are not made in the fog of panic. Make sure you have steadied yourself and eased away some of the anxiety before you start making big decisions for your business.
Now that you’ve had a minute to refocus, it’s time to create a game plan. Take a serious look at your business and identify areas of strength, areas of risk, and areas of need. Do you need to limit purchases or reduce advertising in order to keep up with an increase in sales? Or, do you need to find another sales niche in order to target a new market? Are there any risks or needs in your supply chain?
Once you’ve identified these three areas in your business, you can start formulating plans to address them.
Find Your Sales Niche
Do your best to find a new sales niche within the changing landscape. As schools close and parents begin working from home, customers are looking for ways to meet their new needs. Consider what your customers’ needs might be and work to develop a solution for them. For example, if you sell art supplies, you might create an art kit for parents to buy from their children who are suddenly stuck at home. Or, if you sell personal care items, try creating an at-home spa kit for people who looking for comfort in a stressful time.
You might even try reaching out to your customers via email or social media to find out what they need. Then, work to develop a marketable solution for that new need.
Adjust Your Marketing
You’ll likely need to change your marketing strategy in order to better fit with the changing economic environment. Americans will be spending an increasing amount of time at home. Consider investing in marketing that you can direct to consumers in their homes. Now might be a good time to invest in video advertising that can be broadcast on local TV or even featured in some YouTube videos. Continue investing in advertising on social media and search engines. People are looking to the internet for both news of the current crisis as well as diversion and distractions, so investment in online advertising has the opportunity to reach many eyes.
You should also carefully consider the content of your marketing. For example, as more people stay home and cancel trips, you should rethink any of the travel-based summer marketing you may have had planned. Focus instead on summer marketing that prioritizes living locally.
You should also come up with a few marketing themes that are line with new policies surrounding social distancing. As big brands like KFC and Hershey’s pull ads that feature actors licking food from their fingers and hugging, you should also consider the way your advertisements will be received in a health-conscious culture. Keep in mind that some actions featured in your former advertising could be considered inconsiderate in the current crisis. Consider featuring families at home or people engaging in solo outdoor activities. Do your best to stay relatable in changing the cultural norms.
Maintain Good Relationships With Customers
One thing that hasn’t changed in the past few weeks is your relationship with your customers. Keep this relationship strong by communicating frequently with the people you serve. Let them know about any measures you have taken to ensure their safety and to prevent the spread of the virus. Be honest and upfront with any potential delays in shipments and production. Customers want to be able to anticipate the arrival date of their products, and advising them of any delays beforehand can help customers shift their expectations early on.
If your supply chain has been significantly affected by the coronavirus, you might also consider putting a note about your inventory issues on relevant product pages. Mark products that are out of stock, and enable pre-ordering for those products if you’d like. Letting your customers know about potential fulfillment delays before they place an order will go a long way in keeping customers happy.
Analyze Your Cash Flow & Expenses
If you haven’t already, take a serious look at your cash flow. Are you able to make payroll for the foreseeable month? Will you be able to purchase inventory?
If things are tight, you may be able to get a working capital loan. A loan will give you the flexibility to make the moves you need to make, even while revenue is low. The US Small Business Administration announced on March 12th that they will be providing disaster assistance loans for small businesses impacted by the novel coronavirus. For more information, check out the SBA announcement and our article: What SBA Disaster Relief Loans Are & How To Qualify For One.
Work On Other Productive Tasks
If your orders have slowed, and you find that you have a lot of time on your hands, now might be a good opportunity to turn your attention to a project you’ve been putting off. If you have the resources and abilities, try giving your website a new look. Easy-to-use website builders like Squarespace, Shopify, Wix, and Weebly, make this a task that you can do on your own. Or, perhaps now is a good time to create an emergency plan for what you’ll do if the current condition stretches out beyond a couple of months. Alternatively, you could spend available downtime strengthening your marketing campaigns. Hopefully, that will help you to get the orders coming in soon!
Take Care Of Yourself & Your Employees
Your businesses can’t operate without people, and your people need to stay safe right now. If it’s possible, organize a way for your team to work from home. Here at Merchant Maverick, we’ve been a remote team for years. We use communication tools (like Slack and GSuite), as well as project management software, to plan, organize, and execute our projects.
If working remotely isn’t an option, make sure you follow government guidelines about social distancing and that you provide sick time for anyone who may need it. Let’s take care of each other in this stressful time.
Give Back To Your Customers & Community
Giving back is one of the best ways to feel better during a stressful time. Look for opportunities to support at-risk groups in your community. We’ve been particularly inspired by this list from Forbes of 50 ways larger companies are helping their communities.
At Merchant Maverick, we are giving back by working to supply business owners with the tools they need to overcome this crisis. We hope the resources in this article have been helpful to you, and we hope you are able to find help elsewhere on the site as well.
Getting Your eCommerce Business Through Tough Times
There’s no doubt that things are hard right now. But keep hope in knowing that your business has overcome hard times before. The businesses we’ve come to know here at Merchant Maverick are innovative, resilient, and resourceful. We can get through this together.
Take a look below for a list of resources that can help you find solutions to the current crisis:
Merchant Maverick Resources
- Our Hub for Coronavirus (COVID-19) Guides & Resources
- Small Business Outbreak & Pandemic Guide: Coronavirus Edition
- What SBA Disaster Relief Loans Are & How To Qualify For One
- Coronavirus Survival Guide For Restaurants
- How To Use (& Avoid Using) Business Credit During The Coronavirus Pandemic
- Facebook’s Business Resource Hub
- CNBC Article: Treasury and IRS to delay tax payment deadline by 90 days
- US Small Business Administration (SBA) Webpage: SBA to Provide Disaster Assistance Loans for Small Businesses Impacted by Coronavirus (COVID-19)