INSIGHT: The changing face of e-commerce in response to Covid-19
Dr Shereen Nassar, Global Director of Logistics Studies and the Director of the M.Sc. Logistics and Supply Chain Management programmes at Heriot-Watt University Dubai provides an overview of how e-commerce will be re-shaped in response to Covid-19.
Covid-19 has given rise to new challenges for e-commerce. Buying patterns have changed completely, transportation routes have been disrupted and we have witnessed the stockpiling of essentials. This has naturally resulted in the smooth functioning of the supply chain being affected.
E-commerce sellers are now scrambling to make changes to the way they sell in order to address changing customer preferences. For example, a recent study shows that more than 90% of the Fortune 1000, including many technology companies, have already suffered supply chain disruption.
The Rise of Online
The most obvious e-commerce trend because of the pandemic has actually been people choosing to shop online mainly using their mobile devices, because they are either unable to leave home, or because they perceive brick-and-mortar stores as difficult to practice social distancing in. In the US, for example, online sales increased 49% in April over the prior year, according to Adobe Analytics. Additionally, product categories purchased have also changed dramatically. Data analytics company Nielsen shows that sales of hygiene items such as medical masks, sanitizers etc. are up by more than 300%.
Shift in E-commerce Fulfillment
A big reason why consumers choose to buy online is with regard to delivery. Companies offering next or same-day delivery were much sought-after, and fulfillment was often a big differentiator. COVID-19 has challenged the supply chain in several ways – warehouse staff have been unable to turn up for work, demand for select items has skyrocketed while it has plummeted for others and there is uncertainty in obtaining raw materials. As a result, e-commerce companies now communicate more frequently than before with customers, advising them of delivery times and any delays expected. They are also focusing on grouped deliveries to help manage distribution and delivery more effectively. Innovation, technology, flexibility, and resource optimization are differentiators for a responsive and resilient fulfillment process.
Health and Hygiene Issues
Never a major consideration in the past, e-commerce companies today have to be able to convince customers of the hygiene of ordering online. Given the infectious nature of COVID-19, shoppers today are concerned about the safety of receiving their online orders. Contactless and digital payment have quickly become the most popular payment method. This impact has extended to businesses which have had to respond by upgrading their websites’ digital payment infrastructure using secured FinTech to eliminate loss and fraud. E-commerce companies themselves are choosing to deliver only to areas safe to deliver to, sanitizing their facilities and closely monitoring the health and well-being of delivery staff. For example, Amazon has announced its intention to invest approximately $4 billion through June on COVID-related initiatives such as hygienic deliveries and safety measures.
Finally, according to Forbes, it is predicted that by 2024 one third of the global retail will be shared by e-commerce. Customer experience online therefore is core to success and requires an innovative approach at all times.