The COVID-19 global pandemic turned retail on its head, and the prolonged closure of “nonessential” stores drove retailers online to save their businesses. In turn, the ecommerce space saw explosive growth as sellers and shoppers alike embraced the role of the internet in this new wave of retail. Shopify alone reported a 47% year-over-year increase in revenue as new stores were launched, and eBay has seen gross merchandise value increase by 20% week-over-week in some categories due to buyers shifting their purchases online.
Many retailers who transitioned to ecommerce quickly weathered the storm, and they are now looking forward to welcoming shoppers back through their doors. As states slowly lift their shelter-in-place restrictions and consumers return (safely) to shopping in stores, the industry is interested in seeing how ecommerce now integrates into daily life. Social distancing has strengthened online communities, but its long term impact on retail has yet to be certain. This is what experts predict for the retail industry moving forward.
There are consumers who are price conscious even during normal times, but the percentage of frugal shoppers grows when there is any disruption of economic stability. A staggering 23.1 million Americans were unemployed in April, and everyone saw how quickly the job losses happened. This intensified the overall feeling of uncertainty and is likely to influence consumer behavior for months to come. In turn, price consciousness will drive retailers to be even more competitive in order to attract customers, affecting product values as a result.
More Pickups, Fewer Deliveries
In the early days of the pandemic, delivery was all the rage as consumers stayed home and waited for further direction from government and health officials. However, once guidelines were established that gave shoppers a sense of safety and security while completing errands, businesses saw a rise in BOPIS: buy online, pick up in store. Adobe Analytics found BOPIS orders increased 62% between February and March compared to the same period last year, and some stores are seeing up to 50% of their orders being placed for in-store pickup.
The Rise of Mobile Payments
New safety precautions for brick-and-mortar stores include frequent sanitizing of high-touch areas, including credit card machines that are commonly used by shoppers while checking out—especially now when some businesses aren’t accepting cash. Going forward, experts predict that consumers (and retailers) will switch to Apple Pay, Samsung Pay, or other touchless payment methods to minimize germs.
Ecommerce Volume Spikes
Analysts at UBS predict that 100,000 brick-and-mortar stores will close in the next five years as a result of the global pandemic, and much of that volume will transition to ecommerce. Online retail has already seen a 74% jump in transaction volumes with some sectors doubling. Amazon continues to dominate, and its Sunday announcement that it would resume pre-coronavirus stocking and fulfillment activity will solidify its position as the market leader. Consumers have been turning to the internet to facilitate their day-to-day activities, and shopping is no different. In fact, they’re now opening retail emails 40% more often than they were in early March. Ecommerce volume spiked, speeding up an already-present trend regarding how money is spent.
Younger consumers who grew up with online shopping were accustomed to placing orders and getting them delivered in a matter of days. Then, coronavirus-related supply chain disruptions delayed deliveries everywhere. Even Amazon implemented a new policy stating warehouses could only stock cleaning products and household necessities (which has since been changed back). Suddenly, consumers had to learn to plan ahead, and warehouse stores saw surges as shoppers bought in bulk, preparing to stay home for weeks at a time. Costco sales were up 13.8% year-over-year in February, according to their Q2 earnings release.
Reimagined “In-Store” Experiences
Even though there will be plenty of shoppers who are excited to return to brick-and-mortar stores, there will be others who choose to limit their time out and about. This requires creativity from retailers who still want to deliver those in-store experiences that previously drew consumers to their stores. Going forward, it’s likely that there will be more hybrid options, such as streamable content and virtual employees who can assist shoppers. The fusion of online and offline continues, and it will give concerned shoppers peace of mind knowing they’re safe.
In response to COVID-19, Webgility has launched Beat It!, a website & resource hub devoted to helping traditional retailers who use QuickBooks get their businesses online and succeed in ecommerce. The site aims to inspire retailers by sharing stories from their peers, connect them to developers who can help them launch their online business, and educate them through interactive content—and now, to help them merge their online and offline efforts. You can find more content just like this at webgility.com/beat-it.