The Covid 19 pandemic had devastating impacts on millions of people around the world. Aside from its massive health toll, the pandemic completely transformed the structure of the conventional global economy. Imposed social distancing requirements and lockdowns limited the way physical commerce could be conducted. The resulting impact forced businesses to reevaluate the decades-old conventional business models for the sake of survival.
However, amidst this challenging landscape, innovative technologies emerged as the answer to solve the challenges posed by the pandemic. The pandemic led to a major surge in eCommerce operations, with businesses rapidly considering a comprehensive digital transformation to cater to consumer requirements during the pandemic.
According to a recent report by UNCTAD, eCommerce managed to expand its share of global retail trade from 14% to 17% in 2020.
These findings point towards eCommerce rapidly becoming the new normal for consumers around the world. Since the intensity of the pandemic has subsided due to unified global efforts and vaccinations, the trends emerging from the pandemic have stayed consistent.
To have a clear understanding of the reasons behind these changes, it is important to have an insight into the biggest trends that emerged from the Covid 19 pandemic.
Trends from the Pandemic
- New Product Categories – As a result of the pandemic, new product classes have become popular in eCommerce. According to a study by McKinsey, the pandemic accelerated digital adoption in the grocery segment by up to 5 years. Other estimates suggest that over 30% of global businesses have adopted eCommerce during the peak of the pandemic.
- Covid–Friendly Deliveries – eCommerce companies around the world have adopted their fulfillment policies to offer contactless deliveries with comprehensive sanitation management to alleviate customer concerns during the pandemic. Examples of companies include DoorDash, Amazon, and Uber Eats.
- Social Media Purchases – As a result of the pandemic, customers are purchasing more products on social media platforms than ever before. According to a Statistica study, social commerce constituted over 3.4% of all eCommerce sales in 2020. Similar trends are expected to persist after the pandemic as well.
Key Factors Behind Ecommerce Growth During the Pandemic
Even though eCommerce growth has emerged as a solution to bridge the limitations posed by the pandemic, there are a number of factors that have led to eCommerce growth in the past few years.
Social Distancing Requirements
Conventional retail experiences are centered around physical shopping spaces and consumer activity. The Covid 19 pandemic completely limited conventional movement with the imposition of social distancing requirements and lockdowns on conventional stores. These lockdowns limited consumer ability to browse retail items in stores and shopping spaces.
These requirements were a central part of pushing forward eCommerce growth. Social distancing requirements severely limited physical experiences and directed customers towards digital sales. The eCommerce industry also responded by enhancing the quality of the purchasing experiences.
Companies like StockX added features including 360 ° product images to allow customers to have an engaging visual experience with products. These innovative steps were an integral part of driving the eCommerce revolution and inducing long-standing changes in consumer behavior.
With the spread of the Covid 19 pandemic being a result of close physical proximity, customers were recommended by regulators and governments to shift to contactless forms of payment. From QR scanning to barcode-based payments, contactless shopping has become a major phenomenon as a result of the pandemic. Even after the end of the pandemic, the usage of these payments is expected to grow at a monumental rate due to the secure nature of these payments.
Mobile Wallets also gained popularity during the pandemic, with leading stakeholders like Apple, Google, and Samsung making strides into the space. The increase in NFC-featuring smartphones was another factor in enhancing contactless payments and offering more freedom to consumers.
Considerations Having a Positive Impact on eCommerce Growth
Despite the pandemic nearing its end, it is clear that Covid 19 variations are still a reality. With countries struggling to contain the spread of variants such as Omicron and Delta, here’s why customers are much more likely to increase their digital spending.
Continued Covid Fears – Despite the fact that the vast majority of Covid spread has been curbed due to proactive vaccinations and monitoring, people are still cautious about socializing in close proximity. These fears will continue to drive digital sales as people will stay in the safety of their homes to make purchases.
Increase in Digital Usage – According to reports by Forbes, smartphones, and hardware sales are at an all-time high. Millions of conventional users are embracing digital technology as an integral facet of their lives. Similar adoption trends are being observed across the purchase of tablets and laptop computers. These devices are allowing customers to make purchases with the touch of a button, and the resulting convenience is positively impacting eCommerce adoption.
More Options – Conventional sales are often impacted by scarcity and capacity. There are only so many options a local convenience store can offer to customers. eCommerce provides more freedom by allowing customers to explore different alternative brands and options. This freedom is a key factor that is leading to the growth of eCommerce platforms.
New Purchasing Habits – Even though physical stores are reopening after the pandemic, the habitual experience of purchasing items from eCommerce stores is still a factor in impacting user decisions. It is difficult for users to shift away from the convenience offered by online shopping when the alternative takes more time and effort.
Savings and Discounts – Due to the inherently lower costs associated with eCommerce sales, brands have the ability to offer better prices on eCommerce sales. This allows consumers to get better bargains and get their favorite brands at affordable prices. These savings and discounts are an integral part of driving eCommerce sales.
Creating New Industries – The Role of Pandemic in Creating New Industry Segments
Aside from being a gamechanger for existing digital retailers, the pandemic has been a significant force in driving consumer behavior and creating new industry segments. The digital entertainment and streaming industry have been one example of areas that have positively grown as a result of the pandemic.
Gaming has been a major example of this phenomenon. Even though the industry segment witnessed rapid growth before the pandemic, Covid 19 amplified the growth of the industry by directing millions of new customers into the industry. Companies like Sony and Microsoft witnessed record-breaking revenues in 2020 with reported sales of over $45 Billion. Similar growth trends have been witnessed across the entire industry, with leading stakeholders and indie developers struggling to keep up with the demands of modern consumers.
Exploring the Gaming Landscape
A key factor in the growth of gaming has been the shift in entertainment during the pandemic. The lack of access to physical sports, music avenues, and venues has led to a major transition towards gaming. Millions of people have embraced gaming as a way to entertain themselves during the pandemic.
Moving onwards, gaming is expected to continue its accelerated growth and become one of the most significant avenues of entertainment even after the pandemic. This exemplary growth is another example of the way the pandemic has completely transformed the eCommerce industry.
Seeing Ahead – Future Trajectory
The behavioral changes resulting from the pandemic have transformed eCommerce as a whole with lasting innovations and structural changes. The wide majority of conventional businesses today are considering digital adoption to sustain their business and attract newer audiences.
Insight by DIF experts suggests that eCommerce will continue to grow at an exemplary pace due to the massive rate of digital adoption and the convenience offered by online shopping. The impacts of the pandemic will continue to significantly impact future trends and how consumers respond to conditions.