The pandemic is beginning to rise again, with daily cases increasing as the autumn is creeping in. We’ve already had our fair share of the COVID-19 pandemic this year, and it’s likely to get even worse as the year draws to a close.
Many people were worried about the pandemic, especially in the business and retail area. Brick and mortar businesses have suffered, while online businesses thrived (almost all of them) as people were forced to stay at home and had to order their products online.
E-commerce is as strong as ever now in 2020, and the trend is likely to go up in the coming months and even years. It turns out that the pandemic has sped up the digitalization of businesses that were forced to undertake this operation even if they hesitated to do so in the past few years.
But what are the real implications of the pandemic on e-commerce? What are some numbers behind the pandemic’s effect on it and how is it looking like for the future? How does conversion rate optimization during COVID-19 work? That’s what we’ll try to uncover in this article. Stay tuned.
Online Sales Have Shot Up by 30%
E-commerce was one of the biggest winners of 2020 and the coronavirus pandemic. Just in the first few months of 2020, the sales have shot up by 30.1% for online retailers in the US, according to the report by Digital Commerce 360.
This is a huge increase considering the numbers went up by a couple of percentage points in the last few years. The trend was still an upward trend, but it seems like the pandemic sped up the process.
The total number of sales so far this year in online retail has been worth $347.26 billion, compared to $266.84 billion from last year. If we compare the same growth charts from 2019, it grew by 12%. So we can acknowledge that the pandemic is changing the spending trends of the US citizens, but also for everyone around the world.
And if we’re entering another lockdown or potential additional restrictions amid the worries that the COVID-19 is back and causing trouble again, then online retailers are likely to get even more joy in the coming years.
Brick and Mortar Businesses are Going Bankrupt
However, the COVID-19 pandemic has not been good for every business out there.
As the customer shopping patterns are changing and moving online, many brick-and-mortar retailers have taken a massive hit on their sales in 2020. In some cases, those hits were so huge that crippled the retailers and forced them to file for bankruptcy.
So far, more than 20 well-known retailers from the US have gone bankrupt, and many more from all over the world. Among the struggling businesses forced to go bankrupt we have some big names, such as:
- Neiman Marcus
- J.C. Penney
- Ascena Retail Group
- Bluestem Brands
- Pier 1 Imports
- Brooks Brothers
- And others
This number is likely to increase should the restrictions get harsher from the government. Unless the retailers adapt and move their businesses online, they are facing the same consequences as the retailers that were forced to go bankrupt in 2020.
Amazon Continues to Prosper
Another trend that has continued amid the pandemic is that Amazon is continuing its massive growth every year. Compared to February 2020, the Amazon traffic has gone up by more than 28%, and it’s up more than 8% more than last year in the same time period.
Many smaller e-commerce retailers have lamented this success Amazon has had during the last few years. Unfortunately for them, the stronghold Amazon and Bezos have built is expected to get stronger.
More and more marketplace sellers are moving to Amazon, and that’s why the traffic is increasing there. The company also has something from almost every category, so it’s often the primary source for online buyers.
Other factors that make Amazon more viable are the prices and the shipping times,
which are usually lower and shorter than with other details, especially if you have Amazon Prime enabled. This is a reason for concern for smaller e-commerce retailers who are likely to suffer because of Amazon’s rise.
People are Going to Shop MORE
Because everything is so easy and accessible, you are always just one click from buying something online. And this can be both a bonus and a bad thing, because some people don’t have complete control over their finances and how they spend money.
In an online retail environment, you just don’t get the same control over your money as you do in a physical store. You don’t see your money getting handed over the counter to the retailer. You just need to click one button, and your product is bought.
That’s the danger many buyers are facing – it’s dangerous to get carried away quickly by how easy it is to spend your money online.
And the spending is going to increase. People have spent more this year than they have spent in the previous years when brick and mortar shops were still open. That’s one of the reasons, plus the instance of the transactions makes it much easier to shop online.
Retailers Are Moving their Business Online
Many retailers are moving their businesses and their stores online because they have to do so in order to keep up with their competitors. Physical retail stores like Walmart have had an online presence for years now, but this year, they’ve stepped up their efforts.
Walmart is just one of the examples, though. Almost every business had to do the same in order to survive in this mad world we’re living in today.
And it’s more than just opening an online store, too. Many sellers have had to lure new customers with new discounts and various bonuses for people who like to spend their money on their site. They want to develop customer loyalty before it’s too late for them.
Who knows, maybe after the pandemic, the rise of e-commerce is likely to eliminate the need to have physical stores and follow the Amazon model instead. Amazon is known for its online presence and they have large storages all over the world. But they don’t have brick and mortar shops.
Who knows what’s to follow in the upcoming years. Maybe VR and AR shopping? Or perhaps online retail sales with customer service from real people through services like Zoom. In any case, it’s going to be interesting to see how e-commerce will develop in the coming years.
E-Commerce is Going to Continue its Rise – Why?
Consumer behaviors are changing, and they are changing rapidly because of the pandemic. Some businesses still continue to use the physical store model with the online business model combined, which has worked well this shopping season.
Because the restrictions were lowered in the summer, more people have gone out and spent their cash in physical stores. However, there is no denying the fact that more and more people are spending their money online, and more people are going to do so in the future.
There are a few reasons for this:
- It’s safer for your health. Because you don’t have to leave your home and risk getting the COVID-19 virus, it’s much safer to spend your money straight from your home, laptop, or computer, and get your products delivered in the next few days. Also, this is a good option for people who don’t like social distancing and wearing masks.
- It’s more convenient. And you can order your things and items just in a few minutes – pay with your credit card, and boom, your product is on its way. No more waiting in lines, no more having to drive to the store and spending your money on petrol, too.
- There are more products on offer. You can get everything you want online. In retail physical stores, sometimes, there is a limited amount of things you can choose from, while online in the store, you can choose almost anything you want, and get it delivered straight to your home.
- The customer service is improving. Just like you would experience in a physical store, online retailers are improving their customer support for people buying online. The focus is shifting towards that direction because it’s beneficial for both businesses and customers.
Conversion Rate Optimization During COVID-19
The world is changing, and so are buying habits. E-commerce specialists and website owners need to step up their CRO games to keep up with the new challenges. It is more important than ever to understand your customers. Conduct on-site surveys or use session replays to understand their behavior and make sure that your e-commerce conversion funnel is still optimized.
If you experience decreases in your sales and conversion rate, act as soon as you can. Before you make any permanent changes on your website, test your ideas! A/B testing is the marketers’ best friend, besides web analytics tools, of course. With website heatmap, you can analyze every click and scroll of your visitors. Do not miss the opportunity to see with the eyes of your customers.
E-commerce is on the rise for the last few years, and it’s expected to remain so in the future, too. The trends are changing almost daily, so businesses have to adapt fast in order to keep up.
And the pandemic has sped up this development. What the future brings is up for debate. If the pandemic continues to keep its hold on us as consumers and as business owners, then we might have to adapt to a new reality very soon. New technologies are on the rise, and they will be here before you know it.
Evelin Rácz is the Content Marketing Manager of Capturly, a full-scale online analytics tool which can provide online businesses with first-hand feedback and real business insights simply and intelligibly. Connect with Evelin on LinkedIn.