What is E-commerce?
E-commerce includes buying and selling of raw material, products, services or any kind of goods and services through the internet by the consumer, retailer, and business. Whereas, e-commerce retail is the exchange of goods and services between an online retail company and consumers. The e-commerce transaction can be of different types such as business to Business or B2B (Cisco, Alibaba), Business to Consumer or B2C (Amazon, Walmart) and Consumer to Consumer or C2C (eBay).
How Covid 19 boosted E-commerce so far:
The COVID-19 crisis has led people in many countries to significantly limit physical interactions. People now prefer to shop online, which resulted in an increase in sales online worldwide.
Ecommerce was growing fast before COVID-19 hit. But the pandemic pushed even more U.S. consumers online, contributing an additional $105 billion in U.S. online revenue in 2020 and accelerating ecommerce by two years, Digital Commerce 360 estimates.
The UN Conference on Trade and Development (UNCTAD) released a global review of the impact of the COVID-19 pandemic on e-commerce and digital trade.
The report finds that global gross domestic product (GDP) decreased 4.3% in 2020. Global trade in goods decreased 9%, and global trade in services decreased 15%. At the same time, e-commerce’s share in global retail increased from 14% to 17% from 2019 to 2020. In China, for instance, the online share of retail increased from 19.4% to 24.6% between August 2019 and August 2020. In Kazakhstan, the online share of retail increased from 5% to 9.4% over the same period. Downloads of shopping apps in Thailand increased 60% between February 2020 and March 2020. The teleworking, distance learning, online conferencing, gaming, and digital entertainment sectors also experienced accelerations in digital transformation in 2020.
So now, we can clearly say that this deadly virus which caused great pain and agony for humans, has somewhat a positive side.
The Rise of Online Shopping:
Online sales hit $791.70 billion in 2020, up 32.4% from $598.02 billion in the prior year, according to Commerce Department figures. That’s the highest annual online sales growth of any year for which data is available.
Ecommerce thrived in 2020 because of store closures and shoppers’ fear of contracting the coronavirus in public. And figures from 2021 show that the coronavirus is still making an impact on retail spending. Online sales increased 39% year over year in 2021, nearly triple the 14% increase in 2020.
2021’s fast ecommerce growth is likely because of consumers spending their stimulus checks and tax returns. Plus, with the coronavirus cases spiking in January, many consumers were still avoiding stores and purchasing online. This, coupled with shoppers beginning to purchase products for their post-vaccine life, such as luggage, teeth whitener and vacation apparel, all contributed to the 39% increase.
With lockdown continuing into its 21st month, we have continued to see greater demand for personalized and branded packaging. Once a selectively used feature relegated to seasonal campaigns such as Christmas or Easter, branded packaging is now being promoted all year round, for example, with customers unable to see family and friends for so long, why not give them the opportunity to send a chocolate bar with their name on it? Or simply making sure a product arrives in branded packaging rather than a generic courier pouch or box.
Hotels and restaurants are adapting to life under lockdown with special offers and deliveries to their customers at home. For many, higher prices for what is usually a service-based product now have to be justified in other ways and packaging can be helpful when substituting the service or experience element of their product.
Packaging innovation – demand since lockdown:
With so many brands forced to trade exclusively online under lockdown and with the service element taken away from many purchase decisions, there is an opportunity to maintain product costs through enhanced delivery and packaging options. This is not just about choosing more expensive or branded options, but also recognising all customer priorities, such as delivery preferences or sustainability.
Over the last year, we have worked across many sectors to provide e-commerce packaging solutions. Almost all sectors have taken steps to advance their packaging in innovative ways, notably food and drinks companies, which have incorporated hygienically modified materials for takeaways and take-out services. We have also seen these and other industries opting for paper packaging.
Food and drink isn’t the only industry to be changing its ways. The beauty industry has had to focus on winning new customers in a remote world. With sustainability at the forefront of many customers’ minds, companies are looking at reusable or refillable packaging to attract attention.
Indeed, a 2020 global survey by Accenture found that since the start of the pandemic, 60% of consumers were making purchase decisions based on environmental or sustainability reasons, so ESG and corporate responsibility for ensuring products are sustainable and ethical is no longer an added extra for most sectors.
Impact on Entrepreneurship:
Entrepreneurs are considered change agents providing the main source of hope for many. In order to enhance economic activity, entrepreneurs are required because they offer better solutions to problems that may rise in the market.
As individuals are spending more time online, it has changed the way businesses provide their services. Social media and especially online communities are strategies that businesses are utilizing to communicate with their customers. Entrepreneurs now have much more time to spend on artistic or creative ventures and are establishing social media pages where online communities have flourished as a safe method to interact with other individuals.
Despite all the bad things happening due to the outbreak of the coronavirus, financially 2020 wasn’t so bad for many ecommerce companies. Most of them (63 percent) say the year (up to October) was successful. And 28 percent claim their ecommerce business was doing well, while their physical stores didn’t. And a surprising 2 percent said the opposite.
All in all, the coronavirus has heavily impacted online retailers on different levels. Among the main challenges for ecommerce businesses, disrupted supply chains and fulfilling demand for products.
Last year, many respondents said they would mostly implement, improve or change personalization, site-search and omnichannel. This year, the strategic vision has, of course, shifted due to Covid-19. Most of the companies (45 percent) will now have more focus on the digital part of their business, by adjusting assortment, investing in new ecommerce software or focusing more on online marketing channels.
More and more, customers now appreciate the convenience of online shopping. While the restrictions imposed by COVID-19 may have made online shopping even more appealing, this is actually a long-term trend that’s likely to continue well into the post-pandemic future. In order to make the most of this, businesses need to offer transparency, flexible policies, and convenient omni-channel solutions for shoppers.