Consumers turn to online retailers
The world is in deeply uncertain times. What is certain, however, is the impact COVID-19 will have on society for years to come. One aspect that has increasingly been dominating news headlines worldwide is the strain the virus has caused the retail community. From London to Los Angeles, shelves have been stripped bare by concerned shoppers wanting to stockpile certain goods for one reason or another.
Technology savvy shoppers wanting to avoid contact with others have turned to online retailers in large numbers. While official figures won’t be published for some time, the number of transactions going through online retailers in these past few days will surely dwarf the Black Friday and Singles’ Day highs seen in recent years.
2020: The year e-commerce adoption breaks age barriers
It was previously thought that e-commerce would represent around one-eighth (12.8%) of total yearly retail sales in the US, a trend expected to be mirrored across many other developed nations. However, the widespread change in consumer shopping behavior we have seen this quarter will surely cause that percentage to rise considerably. This situation will be looked back upon as an unlikely accelerator for the entire industry and prove to be a real catalyst for change, welcome or not. These are important times. If a retailer can manage this process effectively, consumer confidence with online shopping will increase across all demographics, young and old. Currently, online shopping is primarily the domain of the tech savvy. In the UK, 97% of those aged 25 to 34 shop online, while only 54% of those aged over 65 do. 2020 could be the year that e-commerce adoption rates break age barriers.
Even the biggest retailers are feeling the strain
This could be easier said than done, though. Even the biggest retailers are feeling the strain. E-commerce giant Amazon recently suspended shipments from independent merchants apart from medical supplies or “high-demand” products. While products already en-route to warehouses will be accepted and shipped out, no new products will be accepted for some weeks. To help with the surge in demand, the company is hiring 100,000 warehouse and delivery workers in the US alone.
The unprecedented demand for goods is truly a global problem. Retailers have even begun limiting the amount of certain goods that can be purchased at any one time to ease the pressure on the supply chain.
With internet providers reporting an unsurprising 30% rise in internet traffic, it is important that retailers optimize their online business practices. Now may be the time to reduce shipping rates too, especially for essential items such as groceries or medicine.
Huge potential for global e-commerce to develop
Just a decade ago, the retail landscape would have been far less able to deal with a sharp increase in consumers turning to digital shopping environments. Not only would the technology infrastructure have been unable to cope, but so would the payment systems in use at the time.
Consumer behavior in recent times has been strongly influenced by technological advancements. The success of Spotify and Uber are testament to that and wouldn’t have happened without the ubiquity of the mobile phone. However, consumer behavior is also influenced by environmental, economic and sociological factors – all three of which are evident with COVID-19.
It is fair to say that what is going on in the world will permanently change consumers’ shopping behavior moving forward. While it is certainly true that the current situation is presenting the retail community with numerous challenges, there is no reason to believe that they cannot all be overcome. In fact, businesses would have had to address all these issues at one time or another to continue to survive. It is clear that there is still huge potential for global e-commerce to develop for the better over the next decade.
The second wave of e-commerce is now
The rapid move towards e-commerce brought on by the public health crisis has been far from smooth and was certainly unpredictable. However, it is what happens in this second wave that will come to define retailers for years to come. As the e-commerce experience becomes more intuitive and omnipresent – even for slow tech adopters – the digital side of retail will be forced to step up at a faster rate than previous projections.
To read Wirecard’s commitment to our customers and community during the COVID-19 crisis, please click here.