In the last few months, consumer behavior and global markets have evolved faster than they had in the last few decades. The unprecedented events we are witnessing now across the globe are likely to evolve further in the coming months and the results will be endured for years to come. Almost overnight, there has been a massive surge in consumer behavior, where a huge majority of offline purchases have shifted online now.
Let’s wash our hands and get started with what’s new for economies in the wake of the novel coronavirus.
According to the research firm Technomic, 32 percent of consumers today are avoiding crowds and 32 percent are leaving their home less often due to the novel coronavirus (COVID-19). A market study by First Insight reported that 30 percent of respondents, all millenials, are shopping on the internet more frequently now than ever before.
A report by Adobe Analytics revealed that consumers are now more likely to shop and stock for non-perishable food items. It was also disclosed in this report that demand for non-perishable food items have now increased by as much as 69 percent. All these means that most global economies now have to seriously modify their online strategies and operations.
The Impact Of COVID-19 On Marketplaces
COVID-19 has turned the global economy upside down for almost every industry and niche, but it is exciting to see that the world is regrouping now and the time is not far when we all will be witnesses to a humongous surge in demand, traffic, and conversions – the highest in decades – accelerated by the pragmatic shift from offline-to-online shopping trends.
However, this enormous growth during a sluggish economy with scarce infrastructure brings with it a lot of stock and logistics challenges. The interesting thing is that things would be worth the wait and challenges as the shift from offline to online shopping is here to stay even after the outbreak.
Some of the challenges ahead of the market and us are listed below as both sellers and buyers on marketplaces are coming on terms with the ‘new normal.’ Let’s dive deep into these issues.
Supply Chain Issues
Markets across the globe are facing massive supply chain challenges with the national and international movements of goods operating at below optimal levels and the global lockdowns.
Amazon, the global retail giant and marketplace, has experienced significant strains on its supply chain that has resulted in unavailability of non-essential products and shipment delays. According to McFadyen, last-mile delivery services like Shipt, Instacard, Dunzo, Postmate, PeaPod, and others are trying their best to make up for the disrupted logistics and supply chain deficiencies faced by retail giants.
The underlying supply chain cannot be termed as sufficient to cope up with the emerging buying patterns and brace the increasing demand. This, in turn, has an impact on the ability of sellers to restock. Moreover, buyers are negatively impacted by the acute shortages in the stock chain and their demands end up not being met timely. It is worthwhile to note here that many sellers and marketplaces as a result of the coronavirus outbreak are now re-evaluating their local inventory levels to tackle possible global disruptions.
In the last few weeks, many eCommerce sellers have maliciously engaged in false marketing and price gouging that has prompted marketplaces such as eBay and Amazon to ban or suspend some sellers and even remove millions of items. In the wake of false health claims related to the coronavirus outbreak and exorbitant pricing, marketplaces are feeling the heart to restrict such sellers from the marketplace. For the sellers, there is another side of the story since the increased cost of logistics during the pandemic is reflected on the prices.
A NYTimes article shows just how the prices of specific popular items such as disinfecting wipes, N95 masks, and hand sanitizers have surged in the wake of the coronavirus outbreak.
In this phase of COVID-19, marketplaces have been impacted under three broad categories:
- The challenges in logistics and supplies
- The changing trends in consumer behavior
- Change in operations
The Changing Trends in Consumer Behavior
There is no denying the fact that consumer behavior is changing with every passing day. The adoption of measures such as social distancing means the growth of eCommerce demand is inevitable. From online shopping to bulk buying, consumers are changing when, what, and how they are buying.
The three popular areas of consumer spending during these times are baby supplies, cleaning products, and medical supplies according to Common Thread Collective.
According to Rakuten Intelligence, grocery shopping soared in the first week of March after consumers started witnessing long queues at supermarkets or empty supermarket shelves. A surge of more than 150 percent was noticed during this period compared to 2019.
Today’s times truly reflect a unique situation wherein eCommerce marketers and marketplaces don’t have to actively spend on bringing visitors and traffic to their websites.
In the second and last blog of this two-part series, we would discuss the best strategies that can be deployed by marketplaces to stay ahead of the game during this market scenario.