The Long-Term Effects of COVID-19 for Online Retailers

The Long-Term Effects of COVID-19 for Online Retailers

There has been an increase of 146% in online retail orders since the outbreak of COVID-19. QuantumMetric also reported an increase of 8.8% in online conversion rates during the early days of this pandemic, a trend that's usually common during Cyber Mondays.

With over 90% of the US population impacted by stay-at-home orders, consumer views on shopping in a socially distant era will likely remain beyond the pandemic. For retailers, this means coping with the long-term side effects of a consumer that has been exposed to a "new normal". Here are a few changes that retailers can expect in the near future and how to adjust their strategy for success, for life after COVID-19.

Demand for Online Shopping

The demand for online shopping will remain steady, barring any unforeseen circumstances. The pandemic acted as a catalyst for consumers' swift transition to digital commerce. For example, families that have used curbside pickup and home delivery for the first time are likely to stick to them because of the convenience that comes with these options.

The situation post-pandemic is akin to the effect of the 2003 SARS epidemic in China. While it led to the closure of shops, schools, and factories, etc., it opened the gates for eCommerce merchants like Alibaba to thrive. As of April 2020, Alibaba's net worth is US$511.81 billion.

The competition for products and services from eCommerce will also create scarcity for the available products and push consumers to make more purchases. Finally, the variation that eCommerce stores provide in terms of the products to choose from will make it more appealing for customers to continue to purchase online versus in-store.

Change in Shopper Preferences

One thing that's certain is that we'll come out of this eventually. While we hope to combat this disease in the not so distant future, what will remain is a permanent change in shopper preference.

To begin with, many people will become more germ conscious post COVID-19. Because of this, many shoppers will prefer no-touch deliveries, while social joints and outlets like communal buffets, etc. may suffer a down surge in popularity.

Consumers may also be less attracted to using public keypads, something which will force retailers to switch to no-touch technology with more focus on general hygiene.

Lifting the Stay at Home Orders May Do Little to Change the New Consumer Behavior

Even though lifting the stay-at-home orders will leave the public at liberty again, most consumers are more likely to stick to their newly-developed traits. Those that stopped mall shopping and used online shopping instead may opt to stay away from the malls completely in favor of social distancing.

Besides, consumers have learned a few DIY tricks at home. For example, some have invested in fitness equipment to use at home and may never return to a gym. Others have learned how to cut their kids hair and may never pay for a professional cut, for as long as their kids will allow it. Many organizations will have also noticed how cost-effective allowing employees to work from home can be. It won't come as a surprise when the remote working population increases from the current 4.7 million to even double the figure.

The point is, once consumer behaviors change, it's hard to get back to the old way of doing things. When these changes in behavior become permanent, shoppers will stick to the eCommerce brands they discovered over the brick and mortar spots they once frequented.

This will leave brands with another challenge: retaining the new customers they got during the pandemic.

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How Retailers Can Retain the New Customers Acquired During the Pandemic

Retaining new customers post COVID-19 begins with managing the current influx in demand well. If you can't keep up with the increased demand now and prove yourself to new customers, you may be left with a huge hill to climb in your fight to retain the new client base.

Here are a few tips to help you with this:

Have a Dedicated Customer Support Team

The customer support team is the backbone of any online store. Before making a purchase, customers are likely to ask you questions about specific products and recommendations. After making a purchase, customers may still need assistance for order tracking and returns. An FAQ section on your website is not enough to address all your customers' concerns. Be sure to have a reliable channel such as live chat or email that shoppers can use to connect with you directly.

Craft Loyalty Programs to Reward Repeat Purchases

Loyalty programs convince 79% of consumers to come back again. The easiest way to implement a loyalty program is by rewarding customers with points for every purchase that can be redeemed for discounts. A more robust loyalty program can also reward customers who complete different tasks like inviting friends or reviewing products on the website. This incentivizes customers to buy from you, versus a competitor, if they've established points they can use towards a purchase.

Get a Third Party Logistics Partner

Another way to retain customers is to deliver a great shipping experience. Most eCommerce brands use 3PLs to cut transit times and save money. But what some don't realize is that you can also greatly improve customer satisfaction by working with a 3PL.

Think about it. Faster order processing, speedier deliveries, and guaranteed order accuracy can make or break your customer's experience with your brand. An experienced fulfillment partner will also give you the flexibility you need for your business to thrive in a stiff competition by giving you the edge against other competitors.

Ready Yourself for the Radical Changes Post COVID-19

There's no specific strategy that fits all brands when it comes to surviving an unprecedented situation like this one. Sometimes it's your aggressiveness and desire to adopt new strategies quickly, so you can stand the test of time. Don't focus solely on short term alternatives; instead focus on long-term strategy that will allow your brand to be successful in the new normal and beyond.