According to the June 2020 Adobe Digital Economy Index, June generated $73.2 billion in online spend, up 76.2 percent year over year. E-commerce shopping levels are tracking at above holiday (November to December) levels. Conducted by Adobe Analytics, the survey analyzed 1 trillion visits to retail sites and more than 100 million SKUs, as well as transactions at 80 top retailers. Companion research based on a survey of 1,000 U.S. consumers was also included.
The data reveals an opportunity for small businesses looking to continue the online sales momentum as customers settle into purchasing behaviors redefined in the new normal. If you’re looking to capitalize on the swell of digital sales, you can start by understanding exactly how the e-commerce landscape has changed and place some of your energy into formulating an end-to-end strategy that better positions everything from how your supply chain connects to what your digital customer experience looks like.
A New E-commerce Landscape
Understanding the major shifts that occurred in the digital marketplace over the last few months is the first step in helping your business remain competitive.
“Digital sales adoption amongst businesses that were primarily brick-and-mortar prior to COVID increased significantly,” says James Thomson, a partner with Buy Box Experts, a marketing agency for online retailers, and a former executive with Amazon Services.
Along with the pandemic-induced jump from brick-and-mortar to online sales came a significant shift in the types of products consumers buy online, notes Matthew Alland, chief experience officer at luxury shopping platform Olivela.
“The categories where we have seen major increases in spend are connected to the stay-at-home trend," says Alland. "For instance, athleisure like casual clothing and footwear, and in jewelry, earrings and necklaces for video calls."
Adam Gilbourne, founder of Easy Imex, a sourcing company that offers solutions to import from China, has also found that home-oriented purchases have increased.
Do whatever you can to gain control over getting your products to consumers, whether that’s selling direct to consumer or working with retailers that have last-mile delivery options or partnering with shipping companies.
—James Thomson, partner, Buy Box Experts
"We noticed a huge increase in e-commerce retailers looking for supplies in furniture, homewares and home gym equipment during the quarantine," he says.
Mason Soiza, director of online pharmacy UK Meds, said his company has also seen a shift in the types of products purchased during the pandemic.
“There's been a huge increase in sales for everyday household items that used to be overwhelmingly purchased in brick-and-mortar stores,” he says. “We’ve seen a big uptick in over-the-counter products like eye and skin care products, as well as personal protective equipment and hand sanitizer.”
Permanent Vs. Temporary Changes to Online Retail
Some of the changes to the digital landscape may be temporary as the response to COVID-19 evolves, while others are likely to be permanent, believes Michael Kalman, CEO of digital advertising agency MediaCrossing.
“Permanent changes, such as accelerated e-commerce purchases of everyday products, will have a lasting impact as consumers develop new habit pathways,” he says.
Praveen Dukkipati, CEO of Chicago Bridal Jewelers, believes that type of business will dictate what changes become permanent in the online retail landscape.
“For industries that had already started to transition to online sales and where price matters, the shift will likely be permanent,” says Dukkipati. “However, in luxury goods where decision-making is subjective and based on visual values, there's still no substitute for in-person, experiential retail.”
Lessons to Take Into the Post-Pandemic E-Commerce World
Like any challenging time, the pandemic has inspired a host of valuable lessons that will influence future e-commerce ventures.
1. Keep a close eye on supply chain management.
“When the pandemic started, disruption of the global supply chain was problematic for many online merchants,” says Sree Menon, COO of Tophatter, an online shopping marketplace app.
“Manufacturing in China took time to recover and global freight capacity declined,” she says. “This made it very expensive and more difficult for our partner sellers to ship. We initially solved this dilemma by shifting more volume to our U.S. seller population, since China had been hit first.”
Gilbourne learned the importance of sorting out supply chain management issues ahead of time.
"When there is a big rush and you're having stock issues at the same time, there just isn't enough bandwidth to go around," he says. "You can't take down your site when this kind of thing hits, because you lose sales and risk harming relationships with your client base."
2. Be ready to pivot.
“We launched a product for seasonal allergies the day the U.S. started closing down due to the pandemic, and no one was going outside,” says Stefan Weitz, founder of probiotics company Jetson. “We responded by pivoting to an online capability that allows customers to ‘customize’ their probiotics to meet them where they are. That resulted in sales tripling from before the pandemic.”
When the pandemic hit, wallet manufacturer Allett Wallets quickly pivoted to making face masks.
“Our volume has been exponential selling masks online using digital advertising,” says the company’s CEO Bridget Muscat. “We have done more business this year in three months than we typically do in an entire year.”
3. Diversify your online product or service offerings.
“Avoid being dependent on one online income stream,” suggests Janét Aizenstros, CEO of the digital consultancy Ahava Digital Group.
“Niches are important to help your brand stand out online," she says. "Formulate more services and products for your audience. Listen to what your audience wants and needs and adapt to meet those needs and desires. Then ensure that your SEO is superior so customers can find your products and services."
4. Focus on distribution.
“Do whatever you can to gain control over getting your products to consumers, whether that’s selling direct to consumer or working with retailers that have last-mile delivery options, or partnering with shipping companies,” says Thomson.
5. Tap into automation.
Automation—such as robots for inventory management and packaging, loading and unloading merchandise—can be a gamechanger when shipping and receiving demand peaks.
“We’re investing $10 million in warehouse automation to help offset the demand for spikes in labor during online sales peak times,” says Jan Bednar, CEO of ShipMonk, an e-commerce fulfillment company. “This way, we can keep up with demand without fluctuating staff or relying so heavily on temp agencies while other warehousing and logistics companies are fighting for the same resources.”
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