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ecommerce predictions for a post covid-19 world

10 Ecommerce Predictions Influenced by COVID-19

The disruption caused by COVID-19 is far from over, especially as case numbers continue to rise across the United States. This virus has already, and will continue to, shape global and national culture. Already, demographers are saying that COVID-19 will be generation-defining and are proposing new nomenclature for those born after the start of the pandemic. 

We’re eating out less and cooking at home more. We’re spending more time in front of screens than ever. Hand sanitizer and toilet paper are having a moment.

Ecommerce trends are shifting, too.

Expedited by stay-at-home initiatives issued in March and April, consumers were suddenly left without access to normal retail. This resulted in a mass migration to buy online. In response, big tech players like Google, Shopify, and Facebook adjusted (or expedited) their product roadmaps, releasing new ecommerce-friendly developments in rapid succession. 

Since starting the Morning Matcha—a weekly ecommerce news & trends newsletter—I’ve been shoulder-deep in the world of ecommerce during the pandemic for over four months now. It has been fascinating to watch the rapid product and marketing adjustments, the shifts in consumer demand, and the alliances formed by various B2B businesses hoping to ride the coattails of online retail’s increase in popularity. 

COVID-19 is not over and will not likely be over for a while. Yet, when it has passed, its impact on the ecommerce industry and consumer culture will remain. 

Here are my 10 ecommerce predictions for what will stick after the spread of COVID-19 has finally, finally subsided. 

10 Ecommerce Predictions for the Post-Covid-19 World

1) The Low-Touch Economy is here to stay and ecommerce will continue to benefit.

In 2020, the ecommerce industry has already seen nearly double the growth YoY that it saw in 2019. Even once COVID-19 has subsided, the collective psyche of consumers will not soon forget fears of going shopping and being caught in line behind someone who lets out a very large, un-masked sneeze. 

Even if fears do subside (or even if they weren’t there in the first place), we’ll still see a heightened use of online retail post-COVID. Humans are creatures of habit, after all. It’s said it takes 21 days to make a habit, and we’ve now been dealing with this pandemic for well over 120 days. 

For new online shoppers used to enjoying the immediate gratification of buying in-store, the inconvenience of placing an order online and waiting a few days for delivery might have been frustrating. But, after 90 days of this effort, once-ecommerce-abstaining individuals likely finally see the bright sides of e-commerce:

  • No long lines or traffic
  • No coupon clipping, just coupon codes
  • You can literally do it all from your couch 

For many, online shopping is both safer and less-time-consuming than in-store shopping. After months of developing the habit and experiencing the value prop, consumers aren’t likely to change back en masse.

2) Every business will find a way to sell online (if they haven’t already.)

You don’t have to be a retail genius to see that certain industries were hit incredibly hard by COVID-19 while others (*cough* DTC ecommerce) flourished. As the country went under lockdown, businesses without online stores scrambled to pivot to the online environment. 

Restaurants created ways for consumers to purchase uncooked goods directly from them, or else order online without the overhead fees of existing food delivery services. Gyms pivoted to allow for pay-to-play Zoom workouts. Churches set up live-streamed services and made their offering plates virtual. Non-profit businesses of all types, from zoos to theatres, set up live streams requesting donations to keep their operations afloat. 

In the post-COVID-19 era, businesses will not make the same error twice. There will be an increased focus upon creating a functional website on which consumers can spend (or donate) as a failsafe to protect from another potential outbreak or new pandemic. Few will dare start a business without a website with a functional payment system again. 

3) The most successful ecommerce businesses will have a tight leash on their supply chains.

Massive shipping delays were a major side effect of the beginning of COVID-19, with many companies not predicting the sheer impact on demand they would see. In one example, DTC business Thrive Market was forced to limit orders as their demand absolutely sky-rocketed and their 2-3 day delivery promise expanded to 2-3 weeks. 

And this was a business that had a plan. In early March, anticipating demand, Thrive ordered 5x the usual amount of canned goods and cleaning supplies. But they neglected to include toilet paper, the underdog MVP of pandemic retail.

Seinfeld gif

It has always been true that the more control you have over your supply chain, the higher the likelihood of your success for matching demand. However, this correlation became even stronger during the onslaught of COVID-19. Businesses that were able to meet customer demand in a timely manner during the pandemic are already leagues ahead of those that did not in terms of their brand perception. 

4) There will be an increased focus on owned ecommerce channels.

While many ecommerce businesses sell across a multitude of marketplaces, including Amazon, Etsy, and Ebay, those that place the most focus on selling on their own site will see (and have seen) greater success during a potential future outbreak. When Amazon shifted its focus solely to delivering essentials in March, this left the Amazon-dependent sellers that relied on their fulfillment services in the dark. 

The premise is simple: when you sell on a large non-owned platform, that platform has the power. If (and when) that platform changes the rules, your business could be in a pretty big predicament. When you own your sales channel, you call the shots.

shopify vs. amazon
Ecommerce stores with owned and diversified channels will be better set up for future success.

 Similarly, when you own your sales channel, you have a stronger opportunity to differentiate. On Amazon and other marketplaces, the way sellers must often compete is on price, especially when competitors offer similar products.  When you can drive consumers to purchase through your own site, not only do you save on platform fees, but you can also tell your brand story and value proposition more clearly to your target consumer–without the distraction of lower-priced substitutes showing up alongside your product in search. 

5) Meal kits, DTC grocery, and DTC alcohol demand will be better off than they were pre-lockdown.

Remember how I said it takes 21 days to create a habit? Well, consumers had over 90 days to experiment with where they get their groceries when the grocery store wasn’t a reasonable option. Consumers also had 90 days with very little to do but break open a bottle of wine. 

The pandemic saw a massive increase in demand for grocery-shopping-and-delivery services like Instacart as well as meal kit delivery. In one survey, 46% of those surveyed said they had purchased food online during the lockdown, and 41% said they had never bought food online before

While the closure of restaurants was devastating for the alcohol industry overall, those with established DTC channels fared quite well. Just look at Drizzly, an alcohol ecommerce platform, that saw a 300% rise in sales during the pandemic, or Winc, a DTC wine business, that saw a whopping 578% increase in new member sign-ups for the week ending March 21st. 

Post-pandemic, in all likelihood, most consumers will return to the grocery store, but there will be a portion of the market that greatly appreciated their meal kits and straight-to-my-door wine delivery that will stay loyal customers well after it is safe to grocery shop sans-mask. 

6) The ecommerce businesses that succeeded in supplying high-demand essentials will not be forgotten.

When brick-and-mortar retailers struggled with a rush on toilet paper, masks, and hand sanitizer, many ecommerce businesses had them in stock or rapidly developed them to meet demand. While people may now stock up for a future outbreak, they will not forget the businesses that provided for them in a time of need. 

Stores like Public Goods (providing pantry staples, home goods including toilet paper, hand-sanitizer, and now KN-95 masks) and Chewy (providing DTC pet supplies) that were able to meet demand un-met by local stores will likely retain a large and loyal portion of their new customer base. 

public goods hand sanitizer and face masks
Public Goods introduced new products like Face Masks into their marketplace during COVID-19.

Smaller businesses that adjusted quickly to meet demand will see similar loyalty, like the many Etsy sellers that began creating and selling masks or smaller local businesses that rapidly developed and sold hand sanitizer like Atlanta’s Urbanbella

7) Fashionable masks for every niche may be here to stay for the foreseeable future. 

Masks are relatively inexpensive accessories that the majority of the population would not like to be found without in the next potential outbreak. Due to this sudden new demand, retailers large and small made sure they could rapidly adjust to provide masks to their (paying) customers. Who wouldn’t go after an emerging trend with such high demand (and relatively little start up cost)? 

From Gap to UnderArmour to thousands of smaller sellers, seemingly everyone has been creating and selling fabric masks. Even high-fashion joined in. While such masks range in price from $15 to over $100, for the most part it seems these brands are using their mask profits for good. In fact, many shifted their production to provide PPE for the front-line workers first, before offering their masks to the public for purchase.

With more brands producing fashionable masks, more influencers are of course wearing them. This may result in the wearing of masks not only for public health, but also for other societal benefits—likes, upvotes, or brand awareness. Strange as it may seem, expressing yourself with your mask of choice may be the next trend in consumer fashion, at least if the need to wear a mask continues into the year—which, based on current CDC guidelines, we can assume it will. 

8) Athleisure and home office verticals will continue to expand. 

Most office-based businesses switched to a work-from-home environment during COVID-19, and many are thinking of not going back. Generally speaking, an increase in work-from-home business structure is a win-win for businesses and their employees. 

Many employees report enjoying working from home more due to the increased flexibility, more family time, less time in traffic, and a more comfortable working environment. All this even while employees are reportedly working longer hours when working from home.

Meanwhile, businesses benefit from cost savings on office space and equipment and higher employee productivity thanks to happier employees. 

mean girls gif

So, what does this mean for ecommerce? With work-from-home comes a more lax work attire trend, so the demand for athleisure apparel will stay steady compared to its COVID-19 related rise. Similarly, as work-from-home becomes more common, those that have not already invested in a home office set up will need one. Fast. If you are thinking about starting a business, fashion-athleisure and work-from-home products could be strong verticals in which to carve out a niche. 

9) Shopify’s dominance will expand, and they will pose an increasingly large threat to Amazon’s ecommerce market share.

The catalyst that COVID-19 provided to the growth of ecommerce was enormous. Not only were more consumers buying online, but more large companies indirectly tied to ecommerce were eager to join the wave. 

Between the months of March and June 2020, Shopify made major strides in their strategic partnerships. These collaborations will better enable Shopify to gain greater market share against the ecommerce behemoth, Amazon. 

While Amazon and other larger businesses struggled to fulfill orders on time and paused all non-essential deliveries for a period, consumers that would normally shop there looked elsewhere for their buying needs. In fact, 75% of consumers reported experimenting with their typical shopping behavior, including buying from new brands, between March and May. 

ecommerce prediction: the shopify stock keeps climbing

Many small businesses, therefore, benefited from new brand discovery, and Shopify, the platform that hosts over 500k ecommerce stores, may have benefitted the most. On July 1st this year, Shopify’s stock soared past $1000/share, a 146% increase since Jan 1, 2020. This large achievement also happened on Canada day, which is quite fitting, since Shopify as of May 2020 became Canada’s largest public company.

I predict that Shopify’s expansion will not slow down any time soon. More consumers than ever have created a regular habit of shopping online, and meanwhile with unemployment higher than ever before as well, many of those that lost their jobs took this as an opportunity to start an ecommerce business. In fact, Shopify reported that the number of new stores created on their platform jumped 62% between March and May compared to six weeks prior.   

10) Content marketing will become even more important.

Consumers, especially those in younger generations, prefer businesses and brands that speak to them on a human level. That is: the brands that aren’t always trying to sell them something. Businesses that succeed in connecting with their audience will be richly rewarded by higher LTVs and stronger word-of-mouth growth. While this has always been the case, this truth has grown even more powerful during the coronavirus.

Businesses that provided means for their audience to “get through” the insanity of a spreading pandemic and rapidly rising unemployment built stronger brand trust and provided their base moments of delight in a scary time. Businesses that shared the generic (albeit easier) “In these uncertain times, we’re here for you” statement and then promptly went back to business-as-usual with product ads and emails pitching sales conversely turned their base off

From hosting live-streams and virtual gatherings to creating helpful blog content to sending thoughtful emails and personalized SMS communications, there are many ways to make your customer feel valued (and not like just a way for your business to profit.) Brands that recognize this will be better positioned not only in “uncertain times”, but also when times are more stable.

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As these ecommerce predictions established, brands that can create value for their audience with content will be well-positioned for success long after the pandemic has passed. Optimizing your on-site blog content has never been easier thanks to Matcha.

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