The impact of Coronavirus on ecommerce

As the coronavirus spreads across the globe, industries feel its effects. Let’s see how it impacts eCommerce.

Negative effects of coronavirus on eCommerce

Losing categories

Among the products categories that take the hit of decreased consumption are:

• Rented fashion (people pause their accounts for when they will be able to safely go out of their homes)
• Fast fashion
• Event wear like bridal and fitted blue prom dresses
• Non-essential cosmetic products like makeup
• Professional cosmetic products for makeup artists, hairdressers, etc. (lots of canceled appointments)
• Travel and sports gear
• Luxury goods like jewelry and watches
• Shoes
• Cleaning services
• Appliances that need installation
• Big furniture items

Safe delivery

Brands cannot offer options like “contactless delivery” via Postmates, Instacart, etc. will be avoided by customers. Here is how to do ecommerce fulfillment in times of COVID-19.

Events are canceled or moved to the second half of the year

• Shoptalk is postponed to September
• Cosmoprof Worldwide Bologna moved to June (source)
• SWSX, Magento Imagine, and Adobe Summit were canceled

This means huge losses in marketing investment as well as opportunities missed for the business.

Supply chains are disrupted:

Due to the shutdown of Chinese factories, many product categories are experiencing shortages like footwear with a 15,7% year-over-year decrease in imports. Fashion brands, most of which are also produced in China, are stuck in for at least a month’s delay in shipping and fulfillment.

Some brands are moving production in the US, closer to home, but it is uncertain how sustainable such a decision will be after the lockdown is over.

Read more about the US restrictions on business by state.

Dropshippers on Amazon and eBay are hit hard, with many pausing operations entirely.

Ad bans

To stop spreading false claims, Amazon, Facebook, and other platforms have banned any keywords related to coronavirus and banning any advertisers making health claims about it. Also, any imagery of protective masks is not being approved.

The positive effects of coronavirus on eCommerce

The winners in the eCommerce space:

• Online grocery stores
• Meal deliveries
• Pet food brands
• Personal hygiene products and home cleaning products
• Baby products
• Telehealth and supplements brands
• Electronics (for setting up a home office, gaming and keeping kids entertained)
• Home good and small appliances (smart soap dispensers, more towels, bidets)
• Books
• Board games
• all forms of online teaching like subscription yoga and cooking classes
• Historically, lingerie and toy companies have done very well during hard times.
• Gardening supplies (people are stuck at home and all data shows fresh air helps in fighting viruses)
• Gift baskets and flower deliveries
• Concierge services
• In the long term, a shift in preference is occurring – shoes not made in China are hot.

More people will discover subscription services and this will probably be a long-term gain for these companies. JD.com was created by the physical company in response to the SARS outbreak in 2003 when more people wanted a safe way to shop.

Personal hygiene products see a huge increase in demand:

• Who Gives A Crap (toilet paper) sold out last week.
• No.2’s (toilet paper) sales are up by 225%.
• Peach (toilet paper) got 279% more new customers in the last two weeks. Now its big packs of 24 rolls make up half of their sales mix.
• Touchland (hand sanitizer) has a 10, 000 waitlist after selling out.
• Soap sellers on Amazon are also selling out.
• Hilma’s immune support products have been on the market for just a month, but now people are stocking up.

Leadership at Peach is concerned with the sudden surge in sales, though. They expect a very high churn rate once things are back to normal and people go back to their old ways of shopping.

Who Gives A Crap co-founder Danny Alexander also warns that being sold out is not all positive. He believes that many customers will associate the brand with panic buying from now on, a negative brand sentiment in the long run. In an attempt to foster a more positive experience, the brand has been urging customers to share their supplies with neighbors. (source)

And to end on a good note, Patagonia is pausing its entire operations, including online sales, but keeping pay for all employees.