Business Ecommerce

Understanding the Effect of COVID-19 on the e-Commerce Boom

Image courtesy of Pixabay

After the COVID-19 outbreak, daily life for people around the world changed in ways that were previously just found in dystopian movies and novels. 

As people conform to self-isolation and follow strict social distancing guidelines, they’ve been unable to DO their usual routines and activities. Local shops have closed their doors and even multinational businesses have limited their operations for safety reasons. Concerns over product shortage have also prompted consumers to go on a panic buying frenzy, especially for essentials such as toilet paper, rubbing alcohol, and food items.

One of the biggest changes in the behavior of consumers has been the rapid shift from buying in-store to shopping online. According to a recent Adobe report, total online spending in May hit a whopping $82.5 billion, which is a 77% increase year-over-year.

On the surface, it seems like the COVID-19 pandemic has ushered in the golden age of e-Commerce that experts have been predicting for years. However, the situation is a lot more complex than it looks.

For businesses, especially SMEs, to succeed in the online landscape, they’ll need to anticipate various consumer segments and further changes in consumer behavior that are emerging and will continue to emerge from the current crisis.

Understanding the Panic Buying Phenomenon

When news of the coronavirus spread and the World Health Organization officially declared it as a pandemic, people responded by stocking up. They bought out household essentials like toilet paper and bread as well as medical supplies like masks and hand sanitizer. It wasn’t long before both brick-and-mortar stores and online shops struggled to keep up with surge in demand. Price gouging for essentials also became rampant.

Humans respond to crises in different ways. When faced with a risky and uncertain situation, especially one which we have no control over, we tend to do whatever we can to make us feel like we have some semblance of control.

Paul Marsden, a consumer psychologist at the University of the Arts London, explained this phenomenon in a CNBC article.  He stated that panic buying can be understood as playing to the three fundamental psychological human needs:

  • Autonomy – the need to feel in control of one’s actions
  • Relatedness – the need to feel that we are doing something beneficial for our families
  • Competence – the need to feel like we are smart shoppers who make the correct choices by bulk buying and preparing for a possibly long-drawn pandemic

These psychological needs are the same reasons retail therapy is a typical response to various types of personal crises. However, during a global pandemic, multiple layers are added.

For one, the worldwide spread of COVID-19 has brought about a lot of uncertainty and, at times, false news or contradictory information. When people hear different pieces of advice from multiple sources, they have a greater instinct to over-prepare rather than under-prepare.

Secondly, they can become victims to crowd mentality. When they see other people panic buying and then notice a scarcity of products, either in store or in online catalogs, these validate their decision to stock up. They don’t want to be left behind with minimal or no resources.

Is Online Shopping Really the New Normal?

Just like how Rome wasn’t built in a day, change doesn’t happen overnight. However, consumer behavior in the midst of the coronavirus pandemic is proving itself to be an exception.

Under normal circumstances, it would take a few more years before people were fully devoted to online shopping. But ever since the COVID-19 crisis, everyone has been pushed to figure out how to shop online, especially if they can’t find essentials in physical stores. The pandemic has also prompted many businesses to transition online, setting up Shopify or WooCommerce to cater to their customers.

That knowledge and the habits they’ve adopted during the global lockdown aren’t going away after the crisis, and these have the power to change e-commerce for the better and accelerate its growth. In turn, online shopping will definitely become the new normal, even months after the pandemic passes.

Yes, stay-at-home orders are being lifted around the world, but in the interim, there are millions of consumers reinforcing and creating new online buying habits and behaviors. In many families, online grocery, entertainment, apparel, and shopping will permanently replace mall and store visits until a vaccine is available. 

A Closer Look at Current E-Commerce Market Trends

Even as shoppers settle into social distancing norms, opportunities still abound for e-Commerce businesses. The trick lies in emphasizing products that fit the current needs of customers during these trying times. 

Based off current trends, customer needs during the pandemic can be summarized into three: protection, connection, and entertainment.

  • Essential services are boosting their search strategy – Customers are focused on buying daily necessities and household staples, so brands that offer essential goods are making themselves more visible on search engines.
  • Fashion and luxury brands are focusing on customer retention – Brands in the fashion and luxury sector have been hit hard by the coronavirus, resulting in sharp blows to their revenue. As a result, they’re prioritizing customer retention strategies such as promoting discounts via email marketing.
  • People are prioritizing health and wellness – Consumers are spending more on health and fitness products. Vitamins, supplements, and herbs are seeing a positive year-over-year trend. Fitness equipment has also seen a sharp increase in sales.
  • Non-essential industries are focusing on social media promotion – Social media platforms such as Facebook, Instragram, and Twitter have turned into valuable tools for non-essential brands to connect with their audience, communicate their brand message, and share the impact of COVID-19 on their business and the community at large.
  • Technology sales surge as people adapt to working from home – With more employees adjusting to work-from-home environments, people have been trying to replicate their office set-up with monitors, laptops, headsets and more.
  • Entertainment-based products have become more popular – During the pandemic, home entertainment is a comforting prospect. As a result, customers have been purchasing more streaming services, games, and e-books.

At the end of the day, businesses face a major issue: how do they keep up with the sudden changes in consumer behavior and stay afloat during the current pandemic?

We are, all of us, currently living in strange and trying times.

Customers are trying their best to adapt and adjust, shifting their behavior as a result. Business owners face much of the same uncertainty, while trying to support their customers’ needs and their own.

As e-Commerce is only set to rise further in the years to come, it’s best for businesses to shift their focus into setting up a presence online and becoming more visible to a growing population of online shoppers.

About the author


David Emmerson

A writer and editor, Dave (as his friends call him) loves the printed word and believes writing is the best way to stay sane. He has taught English in many parts of Thailand and Cambodia, and says that teaching the language made him a better writer. Currently Dave is working as a consultant for SEO Services Australia.