How E-Commerce Is Adapting to the Coronavirus Pandemic
The e-commerce game has never looked like this before, and due to the ongoing pandemic, no one is quite sure what it will look like tomorrow. All the best demand forecasts in the space have gone out the window, and every brand — no matter how large or small — is simply trying to adapt and respond.
Some have seen buying trends shift in their favor, but the ones that’ll survive after all this is over are those who resist complacency and actively carve a new path forward.
Here are seven smart adaptations to coronavirus that will shape the new state of e-commerce.
1. Monitoring Health of Partners
In e-commerce, we usually think about what we need to do for our customers. During the pandemic, you may first want to think of partners like manufacturers, suppliers, and other vendors.
Reach out, ask about their operations, and help where and when you can. Sometimes, simply sharing the information that you have and how your business is doing during the pandemic is enough. Right now, everyone is trying to find stability, and knowing what orders to predict will allow them to set their pace more efficiently.
2. Adjusting Cash Tied to Inventory
One of the most dynamic components of the e-commerce response has been shifting inventory. Brands have tried to stock in-demand products like bread machines and disposable gloves, while offloading declining categories such as luggage, swimwear, and party supplies with giveaways, deals, and more.
The goal is to free up as much cash tied to this slow-moving inventory as possible. Every business is going to need significant liquidity to adapt to the pandemic, and many recommend focusing on inventory to find it. Adapting can mean hiring a new warehouse because your facility has had to shut down or trying to stock up on goods that are selling well now that everyone is staying at home.
We’ve seen liquidity targets change how companies are restocking goods, halting both poor sellers and even high-value items that are profitable but take a long time to sell. If you plan on adjusting what and how often you restock, tell suppliers and any logistics partners you have. Prep them for the change so you can best predict if you’ll face changes to warehouse and production costs, and to determine if your suppliers can ramp up goods if you plan to buy at higher volumes.
3. Capitalizing on New Buying Behaviors
The initial response to COVID-19 was panic buying. Paper products and household cleaners were gone in a flash and, in many areas, they remain gone. People also bought up masks, cloth, disposable gloves, and shelf-stable foods.
What we’re seeing now is more of a response to people being at home for the longer term. All those sourdough challenges on social have played a big part in the 652 percent year-over-year growth in bread machine sales at Amazon and other e-commerce stores, for instance.
E-commerce shops with a broad set of products are trying to capitalize on the new buying trends before they end. This means monitoring social channels and the news for what’s hot. It also means paying attention to what’s expected next.
If your e-commerce store sells outdoor goods, for example, you may want to start determining which states and localities will open their doors back up first. Targeting local SEO and ad keywords for those regions might help you be the first place they see when getting ready to go back out into the world.
4. Identifying Potential New Targets
The shift in buying behaviors is also causing some e-commerce companies to change who they serve. The lines between traditional B2B and B2C brands are being blurred right now. Restaurant suppliers, for instance, are making their products available in smaller quantities so they can offer cleaning and bathroom supplies to individual consumers and homes.
Shoe and apparel brands are starting to directly target nursing facilities and hospitals as there is an increase in demand for all kinds of apparel. They’re also working with local charities to be the brand that supplies donated goods — at the very least, this bit of PR prevents increases in warehousing and storage costs.
Cultural shifts are occurring all over the world. See what that means for your existing customers and if it might lead you to someone new.
5. Filling Gaps With Local Resources
E-commerce supply chains have seen significant disruptions. Many rely on overseas manufacturing and assembly, especially if they’re competing on cost or running a dropshipping operation. The pandemic has led to slowdowns in manufacturing and restocking, issues with moving freight, and a variety of cost increases as they try to balance supply and demand.
To address these challenges, some e-commerce brands have begun to find local and U.S.-based sources for their products. Onshoring manufacturing can be more expensive in a general sense, but, if you can find a company nearby that is ready and willing to make your products, you might save considerable time and have a more reliable stream of goods.
Try to secure groups that aren’t relying on the same manufacturer or provider for their raw materials. This approach ensures that a future disruption won’t knock both of your suppliers out.
Sending the message that you’re helping protect jobs during this time of significant unemployment will be well received by everyone from your customers and partners to your staff and family.
6. Prioritizing Customer Relationships
Customer service is one of the best places to invest right now, because people have more e-commerce options than before and much more time to shop around. They’ve also got extra time to read and write reviews. Negative coverage and tweets hold more significant power than we’re accustomed to.
Build out customer-service capabilities. This means everything from hiring people to answer questions to adding chatbots to your site.
The hallmarks of good customer service still apply: honesty, clarity and speed are all paramount.
Help people who are feeling anxious. Knowing the date their product will arrive can help them feel a little more in control. Automate this if possible: an email with a tracking number after a purchase, one after it ships and one the day the product is expected to arrive.
It might even be a smart time to simplify your returns process. This feels a little counterintuitive, but the data shows that customers highly value returns processes that are easy to understand. They’re more likely to shop from you again if your returns process is seamless (even if they don’t plan to return an item).
7. Thinking About Tomorrow
Leading e-commerce companies are tackling COVID-19 challenges as they occur, while also looking at more standard business growth and risk mitigation.
Perhaps the best way to look forward right now is to uncover ways to cut costs. For instance, shipping to far zones raises your costs, especially for heavy items. If your customers are changing and leading you to ship over greater distances, it might be time to consider a second warehouse or a third-party logistics partner that can fill orders for you. You might find that cutting costs on shipping makes the entire process more profitable.
Splitting your inventory will not only help get these products to customers faster, but also reduce the risk that any localized disaster or power outage impacts operations. An earthquake or fire in one region won’t cause everything to shut down entirely.
The coronavirus is creating long-term changes to e-commerce businesses, and if you’re committed to being nimble, there’s plenty of room to use those changes to cut costs and increase profits.