You don’t have to be an e-commerce expert to see that this state of lockdown, both in the UK and globally, offers the biggest opportunity for online brands operating in a COVID-19 world and far, far beyond as consumers are set to radically change their purchasing behavior.
With online retail sales estimated to reach an eye-watering $6.5 trillion by 2023, the e-commerce sector was already due to boom. But since the pandemic outbreak, online shopping has gone into early overdrive.
Even the largest retailers on the planet are struggling to keep up with the unprecedented demand. In the US, Amazon has stopped delivering all but essential supplies; in the UK, food and drink retailers, despite adding more delivery slots, simply can’t cope with the demand – never mind the additional squeeze on the supply chain.
We are also seeing a number of traditional food and drink brands, like Heinz, setting up a direct to consumer e-commerce offer. Found at Heinztohome, the brand has already started to sell its traditional canned goods and plans to expand into its sauces and baby ranges. The first offering, a ‘Heinz to Home’ bundle, is made up of 16 products – eight cans of Heinz beans, four of Heinz Hoops and four Heinz Cream of Tomato Soup. It also offers free delivery for key workers.
Even more interestingly, last week we saw the launch of Mighty Small, an e-commerce platform launched by Young Foodies, the network that helps empower the brands of tomorrow. The site, according to launch materials, is a new online supermarket with community at its core, dedicated to small independent challenger brands. This platform allows those who don’t have an existing e-commerce operation, or who don’t want to create new channels, the chance to unlock new opportunities online and access new consumers.
But what exactly are people buying and is this trend here to stay?
If we look at China, where the pandemic first struck, sales of alcohol and fresh foods on e-commerce sites surged during the pandemic according to Euromonitor, with market analysts predicting that the changes in consumer purchasing habits are here to stay.
The report revealed that during this period, consumer behavior changed to focus on health and hygiene – turning to e-commerce for alcohol, fresh food and even dairy during the lockdown period.
It is predicted that this online shopping growth is likely to grow significantly this year and beyond. Similarly, industries with a mature online presence will see a strong boost in demand in the short term, while developing online segments will continue to grow.
Retail intelligence firm Stackline found similar results in the US when it looked at data on the fastest growing and declining e-commerce categories from March 2019 to March 2020.
It found that as people come to terms with their new living situations, their buying behavior has adapted to suit their needs. While panic buying may have slowed, consumers continue to stock up on supplies, or “pandemic pantry products.”
Like China, the US alcohol E-commerce platform Drizly, operating in over 100 markets across the US and Canada, reported sales were up by some 300 per cent and continue to increase.
It also reported that many consumers are also using their newfound time to focus on their health, with 85 percent taking up some kind of exercise while in social isolation, and 40 percent of them saying they intend to keep it up when restrictions are lifted.
We are seeing similar patterns emerging in the UK, with the major food and drink supermarkets adding 20 to 30 per cent to their delivery capacity as well as employing more pickers and packers. Wine merchants like Majestic are struggling to cope with the volume of orders and recipe box delivery services like Gousto have actually closed their subscription services to potential new customers.
There is also the emergence of a new wave grocery shopping services like Shift who will collect your groceries from any supermarket outlet for a picking and handling fee. Existing e-commerce platforms like Task Rabbit are diversifying and offering new services like contact-free grocery shopping.
There is a whole host of local producers, farmers and independent restaurant groups all getting in on the act and opening their own e-commerce shop fronts across different channels like Facebook and Instagram covering everything from fine dining ingredients to basic fruit and veg boxes.
This whole retail reset means many consumers are re-connecting, or perhaps even connecting for the very first time, with local farmers, producers and sellers. These links are likely to live on well beyond the COVID-19 lockdown world we currently find ourselves in.
The changes in behavior across the generations
The behavioral response to COVID-19 hasn’t been universal across generations, with consumers of different age groups responding differently to the crisis according to the Big Commerce blog. While people in general are concerned about the growing pandemic, the youngest generations are altering their purchasing behaviors the most.
One survey of U.S. and U.K. consumers by First Insight found that 96 per cent of Millennials and Gen Zs are concerned about the pandemic and its effects on the economy. They are cutting back on spending, stocking up and spending less on experiences. The latter may well be a direct impact of a number of ‘experiences’ now appearing online for free like Wok from Home cookery classes from Wagamama.
Conversely, although still concerned about the effects on the economy, older generations were slightly less concerned than younger generations and letting it impact their shopping habits less. For example, 24 per cent of Boomers and 34 per cent of Gen X said they weren’t letting current events influence what items they purchase, compared to nearly half of Millennials.
New norms set to be an on-going reality
Not wanting to use the well-used cliché too much that we are in unprecedented times, but we really are – and they will continue to develop in the coming weeks and months until a vaccine is found and administered globally.
Our way of life has changed, and it is set to change for good as we may be forced to accept new norms like social distancing and wearing face masks that will become an on-going reality.
This will have a direct result on our purchasing behavior and the way we live, and shop and brands will need to embrace e-commerce to ensure their brand communications strategy is on point if they are to survive in the new world norm.
For those wanting to embrace this opportunity, here are six simple tips to get started:
- Define your unique offer and know the competitive set
- Keep the site clear and simple
- Make checkout easy
- Provide easily accessible information (eg no contact delivery) and customer service (‘phone, email, Facebook, Twitter)
- Prioritise SEO
- Partner with influencers to drive credibility