COVID-19 has no doubt been terrible and life changing for many people and the US economy. As states begin to slowly reopen and the “new normal” starts to present itself, the ecommerce retailers are also seeing a “new normal”. As everyone sheltered at home and many traditional retail outlets were closed, ecommerce services have seen year-over-year revenue growth of up to 68% and order volumes increasing 129%. Consumers, who have never been attracted to shopping online, are now regularly shopping online for nearly everything outside of groceries.
Prior to Covid-19, many small and middle market ecommerce companies struggled as the cost of customer acquisition increased and consumer expectations were high. While the cost for advertising may not see declines in the near future, with so many new consumers shopping online, conversation rates have increased. Sources show conversation rates have increased as high as 9% in some cases. This increase is helping to drive down the cost of customer acquisition. This increase in new customers allows for brand exposure and remarketing opportunities even after the COVID-19 Pandemic subsides, which increases the probability of long-term success. Competition in many industries is high, and finding ways for product differentiation is tough. However, with $3 Trillion pumped into the US economy from government stimulus and consumers shopping online as a necessity, the small and medium sized ecommerce companies could be saved.
Companies have begun taking greater advantage of social media in order to reach customers. Many companies are focusing on a more regional marketing strategy. They cater their ads and messages to specific regions based on the level of impact the virus has had. This allows their marketers to adapt their strategy to fulfill the specific needs in New York versus Indiana as the virus has hit each differently. This strategy has given companies the ability to leverage the increased interest in online shopping, to build a larger customer base, which will have a much longer term impact.
However, with more customers comes more demand, and which has place a bit of a strain on the supply chains of many ecommerce companies. This will force the smaller one to really step up their game. Technology adaptations can provide the opportunity to improve supply chain operations, if the work is put in. Smaller and struggling companies will need to look at market trends, marketing tactics that have proven successful, and their current operations to determine how they can be successful in the fight to live through COVID. This is entirely possible, and this is the time for those changes to be considered.
Companies that are able to handle the increased demands and continue to meet customer satisfaction, will be primed for long term success. The opportunity is there for middle market ecommerce companies to capture new customers, delight those customers and convert them to long term loyal customers. If they are able to do this, the struggling companies could come out of the global pandemic primed for long term success.