How E-Commerce Became Crucial to Retail Survival
on: July 16 ,2020 In: Developing News
For many years, e-commerce has been on a steady rise, making up roughly 9% to 10% of total U.S. retail sales. For emerging brands, it has been a vehicle for going from unknown to household name. For others, e-commerce has lived primarily on the whiteboard as a problem to solve in the years ahead.
Due to the COVID-19 pandemic, there’s no longer any time to wait. E-commerce now equals survival. Retail sales are expected to drop more than 10% in 2020 as a result of the pandemic, according to eMarketer. Meanwhile, that same report indicates that e-commerce will experience an unprecedented jump of 18%, reaching $709.78 billion, in 2020.
The pandemic and quarantine have put e-commerce into fast forward. Five-year plans are being tossed aside, with business leaders forced to take immediate action to strengthen this channel.
This rapid adoption of online shopping is providing new insights and lessons, some of which will last long past the pandemic. Pre-COVID-19, the top two categories for online shopping were consumer electronics and apparel/accessories. Due to stay-at-home policies, the industry is experiencing a massive shift in the types of products people are purchasing online. According to eMarketer, categories such as groceries and health products are on a sharp incline, expected to grow by nearly 41% in 2020.
Clearly the pandemic has unlocked a wider array of online shopping. No longer just fixated on gadgets and clothes, shoppers are now purchasing more items essential to their daily lives. For example, health products that previously relied on storefronts to showcase their brands must now act quickly to bolster their e-commerce channel, lest an upstart competitor fly by.
Change is occurring not only in the types of products consumers are buying online, but also in how those they’re being physically acquired. Retailers are being forced to adapt, and flexibility is vital. Kroger converted a store in Cincinnati to pickup-only service. Major brands and retailers such as Gap and Nordstrom are offering curbside pickup at dozens of stores. Many more are launching, or scaling up, their own curbside operations.
The pandemic has forced brands to reach customers where they are, which is easier said than done. Brands are facing a bevy of new challenges in logistics and supply-chain, such as the need for visibility of inventory, constantly adjusting fulfillment capacity, delivering goods of different sizes, navigating last-mile delivery, and managing product returns efficiently to keep customers happy.
Formidable as they are, these challenges often represent just the tip of the logistical iceberg that companies face. Brands that have struggled to accelerate e-commerce operations in the past are now potentially up against an existential crisis caused by the pandemic.
Read the full article at SupplyChainBrain (16th July 2020)