The economic impact on e-commerce

Written by VentureXchange

April 19, 2020

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As the COVID-19 changes buying behaviour, the economic impact on e-commerce could be longlasting. As people come to terms with their new living situations, their buying behaviour has adapted to suit their needs. While panic buying may have slowed in some countries, consumers continue to stock up on supplies, or “pandemic pantry products”.

Although grocery shopping has received higher demand, the Adobe digital economy index data shows that electronics, home and gardening are also influential due to the online economy. See the charts below.

Source: Adobe Digital Economy Index

Demand for groceries has been increasing slightly in recent years, driving online price up by 4.6%. Moreover, plunging TV prices and wider 4K availability have boosted online purchase power over past years. As for the home and gardening, prices have been steadily deflating, but they still rise in early summer as demand increases for outdoor furnishing.

Meanwhile, consumers are experiencing out of stock pages as the supply chains are impacted. The products that receive higher demand due to the COVID-19 impact from January to March, include:

1. Virus protection category products like hand sanitizers, gloves, masks, and anti-bacterial sprays surged 807%

2. Over-the-counter drug purchases increased by 217% for cold, flu, and pain relievers

3. Toilet paper online sales spiked by 231%

4. Non-perishable, canned goods and other shelf-stable food sales increased by 87%

Looking ahead, the economic impact on e-commerce caused changes in shopping and buying behaviour.

“Quick turnaround shopping happens when you think something it is going to go out of stock, like on Black Friday,”

Tamara Gaffney, VP of Decision Strategy at Quantum Metric in an interview with Retail TouchPoints

She also shared that no matter what category you look at, regardless of if you think that matters right now, is seeing online growth.

The covid-19 outbreak in France

Moreover, an interesting increase in online sales is showed in online pharmacies. The latest statistic report from Statista shows e-commerce activity development after the covid-19 outbreak in France.

Source: Statista

The statistic shows the activity of online commerce after the outbreak of the coronavirus (Covid-19) in France in March 2020, in terms of transaction and traffic rate development. Hotel websites showed a fall of about 9% in transactions and around 8% in website traffic rate between February 16 and 23, 2020. Online pharmacies had increased their traffic by 15.3% and their transaction rate by around 2%.

Demand in supply chains: impact on e-commerce

While it was easy to predict the rise in online shopping and demand for e-commerce in the supply chain, the retailers may be facing pressure. Officially the world’s largest retailer, Amazon has announced it can no longer keep up with consumer demand. As a result, it will be delaying the delivery of non-essential items, or in some cases not taking orders for non-essentials at all.

That said, the pressure that economic e-commerce demand from online shopper posed will have consequences on small retailers. Many don’t have the large supply chains that Amazon has and therefore could experience delayed in shipping.

In fact, in early March, 20% of shoppers already had had an e-Commerce delivery delayed or cancelled due to coronavirus, according to ShipStation.

No matter if you are a small or large business with well-organized supply chains, you should keep your communication transparent. If you want a good long term relationship with your customers, be honest and transparent with the possible shipping delays.

Although you can’t virtualize a warehouse worker, you can use digital communication and the process between supplier and retailer.

Change in Grocery E-commerce

Higher demand in grocery online shopping has had a meaningful impact on e-commerce. There are some implications that the changes in consumer behaviour will be lasting. Moreover, the most profound change in consumer behaviour is happening in grocery e-commerce.

Statistic of e-commerce per category
Source: Statista

The recent research from Statista shows the e-commerce share of total retail revenue in the United States as of February 2020, sorted by product category. According to the findings, food and beverage segment accounting for 3.2% of total retail sales. This is at the moment the fastest-growing e-commerce category.

Grocery e-commerce has had huge momentum behind it—even prior to much of the US population social distancing and staying home—with last year representing an obvious inflexion point. According to TABS Analytics from e-Marketer, internet users jumped from 38% in 2018 to 56% in 2019, while the percentage of those who regularly ordered groceries online spiked from 17% to 37%.

Online grocery shopping behaviours-impact on e-commerce
Source: Figure from eMarketer

While retailers are still facing the problem of higher demand and managing the logistics, the operations such as click and collect helped propel the behaviour forward. The example of Walmart’s click and collect is just one out of many groceries chains.

What started as simply making a purchase eventually progressed to buying in new categories, purchasing high-ticket items, and shopping and buying via mobile. Every time these behaviours crystallized for a new set of consumers, it permanently shifted their online buying habits. Supply chains demand had a rather positive impact on e-commerce.


Although online buyers will eventually go back to buying in stores, buying behaviour could easily for some shift to e-commerce. At least one out of five grocery online shoppers could stay online.

The economic impact on e-commerce is widely caused by impulsive buying behaviour while staying in the midset of fear on “something will be out of stock.”

Make sure to properly prepare your logistics and supply chains for higher demand in supplies. If you can not deliver, be transparent and share this information with your customers and workers.

The question that remains is will the buying behaviour change for good?

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