4 Ways COVID-19 is Impacting eCommerce

The world today is a much different place than it was just a few short months ago. In the wake of the global COVID-19 pandemic, stay-at-home orders and social distancing measures intended to “flatten the curve” have become our new normal.

The pandemic has disrupted nearly every aspect of life — and will continue to do so for the foreseeable future. Medical resources are stretched thin. Non-essential businesses have closed their doors — at least for the time being. Employees are learning how to work remotely with kids home from school. And that’s just the tip of the iceberg.

Of course, the pandemic has also impacted the way consumers browse for and purchase products. And these new shopping habits may stick around, even after this world crisis is a memory.

Read on to explore four of the key ways COVID-19 has affected eCommerce.

eCommerce Growth is Surging

Many retail establishments are closed until further notice. At the same time, consumers are practicing social distancing, which means they’re leaving their homes a lot less and limiting their trips to the stores that remain open.

It’s probably no surprise, then, that more consumers are opting to shop online. A survey from Valassis found that 42% of consumers are shopping online more now than they did prior to the COVID-19 pandemic. And Listrak analyzed data from more than 850 eCommerce stores in the US and found there’s been a 28% increase in revenue since President Trump declared a state of emergency on March 13. Plus, just this week, Amazon announced it would be adding 75,000 more warehouse and delivery positions to keep up with the surge in online orders. This is on top of the 100,000 new jobs the eCommerce giant announced last month.

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Interestingly, a PowerReviews analysis found that while conversions have grown significantly in the last month, traffic to product pages has remained steady. It seems shoppers aren’t browsing. Instead, they’re visiting product pages specifically to make a purchase. The company hypothesizes that this is because consumers are purchasing lower consideration products, such as toilet paper and toothpaste, rather than high consideration items, such as a new bedroom set.

Shoppers are Focusing on the Essentials
There’s no doubt that eCommerce is exploding. But not all product categories are experiencing this rapid growth.

Rather than purchasing nice-to-haves, it seems consumers are primarily focused on securing the essentials. This isn’t surprising, as 6.6. Million Americans applied for unemployment benefits last week. There’s no doubt this surge in unemployment has left many Americans strapped for cash.

So what products are consumers opting to purchase online? A survey from Red Points found that the top four categories consumers indicate they’re most likely to purchase online rather than in-store in the midst of the COVID-19 pandemic are:

• Cosmetics and personal care
• Food, beverage and consumer packaged goods
• Household products
• Baby care products

Grocery, in particular, has experienced a healthy boost. This is noteworthy, as grocery has traditionally lagged behind other categories in terms of eCommerce sales. Plus, while other types of retailers have shut their doors for the time being, grocery stores remain open.

According to Rakuten Intelligence, from March 12-15, online orders to grocery retailers increased more than 210%, compared to the same period last year. What’s more, downloads of grocery shopping apps like Instacart, Walmart Grocery, Shipt and Drizzly have surged.

Product Reviews are More Important than Ever

In the best of times, reviews are an important tool in the shopping journey. PowerReviews research found that 89% of consumers consider reviews to be an essential resource when making a purchase.

Today, in a time of social distancing, consumers rely on reviews more than ever. The same PowerReviews analysis mentioned earlier in this post found that towards the end of March, consumers were engaging with reviews prior to making a purchase at nearly double the rate they were a month earlier.

There are a few likely explanations for this surge in review engagement. For starters, many shoppers are purchasing items online that they’d typically purchase in a store, for example, groceries and other packaged goods. They can’t see and touch the product prior to purchase, so they’re turning to reviews to give them the confidence they need to convert.

What’s more, we all know there’s growing demand for certain product categories, such as toilet paper, hand sanitizer and cleaning products. As a result, shoppers find their go-to brands and products are currently unavailable. Valassis found that in the midst of the COVID-19 pandemic, 21% of consumers are purchasing a mix of their go-to brands as well as ones they haven’t tried in the past and 13% are using this as an opportunity to discover new brands. The feedback provided in ratings and reviews helps these shoppers find alternative brands and products that fit their needs and have worked for others like them.

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Brands are Building (or Tarnishing) Their Reputations

We’re in the midst of a worldwide crisis that’s left many people feeling anxious and uncertain. It’s not a viable option for a brand to attempt to carry on as if nothing is happening.

The same Valassis survey mentioned earlier found that 87% of consumers appreciate brands that deliver relevant, timely information during the COVID-19 pandemic. In fact, the way a brand responds to this crisis has the power to make or break its reputation.

There are many brands that are quite literally changing the way they do business in order to support those on the front lines fighting this pandemic. Distilleries around the country have temporarily switched to making hand sanitizer. General Motors is helping to make ventilators. Many fashion brands and housewares companies have started making face masks. Furbo Dog Camera is providing health care workers with a free camera to allow them to connect with their pets while working long, grueling hours. And that’s just to name a few. The companies showing compassion and going above and beyond to do their part are celebrated  — and their efforts will be remembered by shoppers. Just be sure to communicate to customers that you are helping and standard business may be affected.

Other brands and retailers have been criticized for their missteps in the midst of the pandemic, for example, staying open despite stay at home orders and firing employees without notice, and without pay. Those actions will also be remembered and can have a lasting impact on a brand’s reputation.

Start Managing Your Online Reputation

The COVID-19 pandemic has had a profound impact on all aspects of life, including shopping habits. It remains to be seen which shopping habits will stick after the threat of COVID-19 has passed. One thing we are certain of — brands that listen and engage with shoppers have the ability to improve brand loyalty and trust in a time of uncertainty and grief.

The way a brand reacts to this crisis has the power to make or break its reputation. How a brand responds to customers and treats employees during this time can either create an increase or decrease in loyalty and spend.

If you would like to learn more about the benefits of review management and best practices for engaging customers in the moments that matter:

• Read our Blog, Why CPG Companies Must Prioritize Review Management
• Download our eBook, Using Consumer Engagement To Drive Revenue

From everyone at Reputation Studio, please continue to stay safe and healthy. If we can help in any way, please contact us.