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THE INFLUENCE OF THE CORONAVIRUS ON E-COMMERCE

The spread of COVID-19 has far-reaching implications for health, society, and the economy. The coronavirus has now spread around the world and poses great challenges for people that can only be mastered together.

There are around 15,000 new cases and numerous deaths every day. More and more governments around the world are taking restrictive measures to contain the virus. In some cases, this also has serious effects on the economy – as illustrated by the stock markets that are plummeting. E-commerce and online retailers are also feeling the effects of the coronavirus. Although the extent of the effects can hardly be estimated from today’s point of view and this is an unprecedented situation, we would like to give an overview with this article that will help you as an online retailer in difficult times like these and give you some courage.

How the demand from online shoppers is changing due to the coronavirus?

According to Amazon, the coronavirus outbreak has led to an increase in online shopping, which is why 100,000 new employees are being sought to meet the increased demand. This is intended to strengthen the human resources in the fulfillment centers as well as in the shipping network. There the turnover figures from retailers fell by 20.5% in February and unemployment rose. It is therefore to be expected that the consequences, such as lower purchasing power, will affect many companies in the coming year.

However, in this context, one must clearly distinguish between e-commerce and stationary retail. Since consumers are increasingly avoiding public places in order to reduce social contacts and since most shops have closed anyway due to official instructions, consumer behavior is shifting to the Internet. Regardless of the official closings of shops, shopping centers already saw significantly fewer visitors shortly after the virus outbreak.

The first figures already show that there is a shift in demand. Amazon confirms that the demand for household products, especially toilet paper and disinfectant wipes, has increased enormously. Among other things, this has led to stock-out at the online giant. For this reason, Amazon has announced that only medical products and household utensils can be delivered to the warehouse.

Growth opportunities for online retailers

These statistics show that e-commerce shops can generate sales growth from the coronavirus if they sell products that are more geared towards people’s basic needs. This is due to the fact that the population avoids going to the supermarket etc. and prefers to have the products delivered in order to minimize the risk of infection. Accordingly, online shops selling baby products, for example, have seen increased website traffic in the last few days. Online retailers who sell pet food and accessories can also look forward to more orders in the coming weeks. At the same time, e-commerce shops selling luxury goods or the like suffer. sell, with significantly less traffic and lower conversion rates.

Challenges in e-commerce fulfillment

This is particularly due to the fact that the physical presence of employees is required for order fulfillment and parcel delivery. Based on the instructions of the authorities, many logistics service providers have already implemented measures in order not to endanger the safety and health of their employees and to maintain operational activities. Most parcel services companies have come up with pandemic plans that are specifically designed to keep the parcel service going on despite restrictions just in case the virus spreads.

However, it is noticeable that due to such severe restrictions, delays cannot be completely ruled out. The corona crisis shows that online retailers have to check their supply chain regularly and gives them the opportunity to optimize it for the future. One way to do this is to work with different suppliers and also pay attention to the geographic location.

Another important factor is the turnover rate, which is usually relatively high in modern online retail. The aim is to keep the inventory low, which is why the real-time overview of the inventory is an essential part of logistics in order to avoid stock-outs. Now is the right time to contact the supplier and clarify how quickly deliveries in larger quantities can be made possible or deliveries can be blocked because marketing measures have to be postponed.

Delivery of packages to online shoppers

Due to the measures that have been taken, parcel delivery is currently made significantly more difficult by business closings, quarantine areas, and the security measures of the companies (e.g. access restrictions). As a result, a disproportionate quantity of parcels cannot be delivered currently. That is why parcel service providers point out the following:

E-commerce companies should check whether the packages can be delivered to the receiving address and avoid sending them to known quarantine areas. Parcels that cannot be delivered against this background may have to be returned by the shipping service provider for a fee and without further notification. Online shops are advised to point out to their customers that they should use the parking permit option so as not to endanger their health and that of the suppliers.

Parcel service providers currently largely dispense with the recipient’s signature when handing over parcels and delivery letters in order to avoid contact. Instead, the deliverer signs and the GPS data is compared with the delivery address.

Due to the high number of undeliverable packages, the return rate will likely increase.

Quarantine areas, border controls, and border closings can lead to delays in shipping.

Due to the increased demand, there may be service delays.

Transmission of the coronavirus via packages

A question that is often asked, especially by consumers, is whether the coronavirus can be transmitted via packages. From today’s perspective, there are no indications that parcels and merchandise pose a risk of infection. Due to poor environmental stability, it is unlikely that the surface of the objects could be a source of infection.

Make the best of the situation – even if it’s anything but easy

We hope, of course, that the consequences of the virus will not be more serious than expected and that the measures are taken and the support of the medical staff will save as many lives as possible. In this context, it must be emphasized again that it is now important to stay within your own four walls and not only to protect yourself but above all those around you from an infection. This article shows how the measures taken can significantly influence the course of the pandemic and contain the spread of the virus as best as possible.

At the same time, many online retailers are facing a difficult time, which will lead to a heavy loss of sales for some. If possible, companies can shut down their operational business to emergency operations and pay their employees, etc. with the help of subsidies. During this time, entrepreneurs can try to use the crisis as an opportunity to develop new creative business models or products. When else do you have so much time to deal with it?

When the operational business is shut down, capacities arise to tackle projects that would otherwise be pushed back and forth. E-commerce shops can, for example, use the opportunity to revise product descriptions and thus take search engine optimization to a new level. A setup can thus be created that helps online retailers to quickly pick up speed again after the crisis has been overcome and thus benefit them in the long term.

We wish everyone a lot of stamina and strength, but above all health for the coming future!

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DMT Web Hosting is too concerned about the health and safety of both clients and employees. Our office is closed due to countrywide lock down. You can reach us on +92 300 044 4656, +92 321 112 6660 during the lock down period. We appreciate your understanding and patience.