COVID 19 seemed to be just another flue like a virus when it first appeared. In December, it was started wreaking havoc in mainland China, and in January it grew to a full-scale outbreak that was jeopardising millions of lives and even more jobs.- Still, it was localised in China, and even in that scenario, it was a rather peculiar thing that affected the world of eCommerce a lot.
Unfortunately, this was not the end of it all. In the next 2 months, it spread across the world, causing tens of thousands of deaths and economic damage that is hard to comprehend. From an epidemic that was localised in China, it grew to the full-scale pandemic, affecting almost every corner of the world. The consequences it will have on the global economy are huge, but there are some bright spots, especially for eCommerce.
What we thought would happen…
At the very beginning of the epidemic in China, it affected only that part of the world directly. However, since a huge portion of retail goods used worldwide comes from that country, most businesses were affected. In the first few weeks, the panic was not present, as there were reserves available in the stocks across the world. Still, it was a situation that brought uneasy feelings to all those directly involved with Chinese manufacturers.
The first projections were that the production would have to be moved to some other country, or a number of them. This would have huge economic consequences, but it was still an option that was considered seriously as the means to prevent spreading the disease.
The chain of events proved this projection to be unrealistic, as the infection managed to spread faster than anyone predicted, and in a matter of months, the entire world was in jeopardy.
What actually happened…?
Chinese authorities reacted quickly and enforced a full quarantine on the infected areas. Scenes from Wuhan, the epicenter of the outbreak were apocalyptic, but the measures taken gave results. In just 3 months, China managed not only to control the spread of the disease locally but to come on top of the situation in a more than impressive manner. They managed to control the virus and to bring their production back to normal.
On the other hand, many other countries, especially the EU, UK, and the US were not prepared at all for a crisis of this magnitude. COVID 19 quickly spread, and it struck hard. Chinese scenario turned out to be a mild case of epidemic compared to some EU countries (Spain and Italy), and the US.
In a matter of days, the general lockdown took place all over the world. Production stopped in a huge number of non-essential branches, and people were forced to stay at their homes to stay safe.
The damage that this will cause an economy is huge. We are still in lockdown and there is a good chance that this situation will persist for at least a few more weeks. Almost the entire world has stopped for over a month. Production in non-essential branches is almost completely stopped, and on top of that, the lockdown made regular shopping in physical stores almost impossible in every segment except in grocery niche.
The silver lining
Strangely enough, online retailing has blossomed ever since the outbreak started. People are forced to stay at home almost all the time, yet they still require certain things, apart from the essential ones such as groceries.
This reflected more than positively on all businesses that have a classic eCommerce chain in place within their operations. If a business has the option to deliver their goods directly to the customer’s doorstep, they are seeing a huge increase in their operations.
This affected many niches. Food delivery became a really hot offer, and since the restaurants in many places are closed except for orders that are delivered directly to the customers, those who have that option in their arsenal saw a huge increase in their business. It is easy to understand, since the demand is there, and the competition is suddenly much weaker than before.
Retail in cosmetics also saw a huge increase, as the beauty salons and hairdressers are not working at the moment in many places, and people are self-isolating. Despite that, they are still investing in their beauty and body care products, so they are shopping for the related products directly, and exclusively online.
A similar thing happens in the clothing and footwear niche, and many other sectors of the market.
There are also some clear trends at this moment that indicate where everything goes at this moment. Namely, the niches that see a huge increase in their operations are almost exclusively connected to goods that are for personal use and are bought periodically.
Niches that are more industry-related do not fare that well. In most cases, if a retailer is operating in niches that are connected to manufacture, there is a current drop in demand that is quite significant.
This is not something that should last for a very long time, but it may happen again, and it will inevitably have huge consequences in the future.
How to capitalize on the new circumstances?
The path to success is somewhat different between the businesses that are operating in currently profitable niches and those that are struggling at the moment.
Those operating in profitable niches such as beauty, food, fitness, and consumer goods should seize this opportunity and make as much as they can during this tough period for everyone. They should invest heavily in advertising as this will bring benefits not only to them but to their customers as well. This period will not last for too long, but it is expected that it will create some new shopping habits and that the people, in general, will be inclined to shop online after all of this is over. This means that these retailers will need a long term strategy as well.
For the more manufacture related products, these are rough times, but it is also an opportunity to devise new strategies that will focus on online sales in the future. Simply, as the new flu season approaches in the autumn, many people will be more prepared than they are now and they will focus on online shopping.
The bottom line is that although the COVID 19 pandemic will damage the economy worldwide, it opened a new window of opportunity for online retailers. Whether you will take advantage of the opportunity is solely up to you. If you need any help in doing it, we at Studioworx would be more than happy to help you out!