As the coronavirus spreads across the globe, industries feel its effects. Let’s see how it impacts eCommerce.
Among the products categories that take the hit of decreased consumption are:
Brands cannot offer options like “contactless delivery” via Postmates, Instacart, etc. will be avoided by customers.
Events are canceled or moved to the second half of the year
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 their summer collections.
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.
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 winners in the eCommerce space:
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:
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.
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