Ever since March 2020, when COVID-19 was declared a pandemic by WHO (World Health Organization), our lives have changed in many ways.
The government advised us to stay at home as much as we can and avoid social interactions. Many people started working from home, and many businesses had to close their doors to prevent the virus's spread.
We are finally seeing light at the end of the tunnel. We all can agree on one thing, the way we shop has changed in more ways than we imagined.
What Changed With COVID-19?
Looking back at 2020 and now in 2021, it is difficult not to see the differences before and after COVID-19. After all, this pandemic affected almost every aspect of your life between family and work.
Ultimately, we were able to see an increase in online shopping which was already growing pre-pandemic.
With businesses and stores closing, consumers turned to eCommerce to shop for goods. However, even eCommerce results weren't the same for all industries.
In fact, we got surpluses of goods, increased demand for previously unnecessary goods, and disrupted supply chains. Goods such as masks weren't even sold by most retailers, for example. Other products, such as hand sanitizers, didn't have a significant demand before COVID.
Overall speaking, it is important to understand the impact of the new coronavirus on both consumers as well as on businesses. But it is also necessary to take a step further and see how both consumers and businesses will continue to act in the near and long term.
Did Consumers' Behavior Change?
There's no question that we could see (and still see) some consumer behavioral changes due to COVID-19. Just think of all the new products available to fight the pandemic, such as surgical/medical masks, hand sanitizer, gloves, and so many other products.
Many if not most countries decided that the best approach is to lock things down to stop/slow the spread of the virus.
This is the type of measure that many E.U countries have been adopting from time to time. While we haven't defeated the virus, countries have been seeing their numbers lowering as a result. But what does this mean to consumers?
Simply put, consumers need to keep adapting to these restrictions. With many businesses closed, consumers have no other alternatives than to buy their products online. But more than just COVID-19 related products, consumers are also buying all types of products they need.
Even people who had never experienced online shopping before and some who did it occasionally are turning more and more to eCommerce shops.
But let's just take a look at some numbers. According to Digital Commerce 360, "COVID-19 has spurred seismic shifts in buying behavior this year as consumers have avoided shopping from stores and started shopping online, causing eCommerce sales to skyrocket. Due to online sales, nonstore sales growth has been elevated for the majority of 2020."
- Growth in e-commerce accelerated by two years. In case there wasn't a pandemic, the nearly $840 billion in online retail sales in 2020 would not have been reached until 2022.
- U.S. retailers had a COVID-19-related $152 billion hike in e-commerce sales in 2020.
- According to data stated by the U.S. Commerce Department, during Q3 of 2020, from July to September, customers spent $199.44 billion online with U.S. retailers, it increased 37.1% from $145.47 billion for the same quarter as the prior year. In other words, nearly $1 in every $5 spent by customers in Q3 came from online orders.
- E-commerce sales in the Q3 of 2020 considered for 13.5% of total sales.
What About Businesses?
The COVID-19 pandemic certainly brought many issues for businesses as well, especially in what concerns eCommerce.
According to the OECD (Organisation for Economic Co-operation and Development), "the COVID-19 crisis has improved dynamism in the e-commerce landscape beyond countries and has extended the scope of e-commerce, including through new firms, consumer shares (e.g. elderly) and products (e.g. groceries).
Meanwhile, e-commerce businesses in many countries have partly shifted from luxury goods.
Services have been shifted towards everyday necessities, like relevant to a large number of individuals."
But OECD takes a step further.
In this same report, it explains that "some of these changes in the e-commerce landscape will likely be of a long-term scenery, in light of the possibility of new waves of the pandemic, the utility of the new purchasing habits, learning costs and the reason for firms to capitalize on investments in new sales channels."
Below are some points to keep in mind:
- According to an inquiry conducted by SearchNode in October 2020 to 100 eCommerce decision-makers from Europe and North America, the Online profit margin increased by 38%. Generating online sales is just one part of the equation. Customer Services has been poorly staff in the entire covid-19 situation, and supply chains have led to things disrupted.
- Companies had to make changes in their workforce as well. According to SearchNode, about 44%t said they had to relocate staff, while 3 in 10 hired more people. However, it's not only roses. In fact, 26% of the companies inquired stated they had to fire some people, and 15% say they had to decrease their employees' salaries.
- What may be a surprise is that 21% of companies didn't adjust their workforce at all.
What does this all mean for businesses?
Ultimately, since businesses are dealing with more customers, this could invariably lead to problems in order fulfillment, warehousing, distribution, and even shipping. After all, with more customers demanding similar products, Businesses may need to deal with a shortage in specific goods and surpluses in different goods.
Overall speaking, businesses need to make sure they come up with the solutions for these problems, which may involve looking for different warehousing, distribution, and shipping partners.
However, this will not be easy to achieve since consumers are also looking to get their products at the lowest price possible. This means businesses will face harsh competition to ensure they can get most consumers buying from them. This may lead to lower profit margins, adding or offering additional services, or changing the packaging to differentiate from similar products.
What Can Businesses Do?
It's easy to see that COVID-19 affected both consumers and businesses. If consumers saw a decrease in the supply of certain goods and even saw the price surging in some, businesses have some difficulties managing and fulfilling all their orders. Furthermore, it is important to keep in mind that warehousing, distribution, and shipping are all fixed costs that a business has.
What are the solutions and main trends for businesses not only to survive but also to strive during the COVID-19 pandemic?
Overall, it is crucial to keep in mind that there is no one size fits all strategy to deal with all the pandemic challenges. But staying still and doing nothing isn't a solution either.
Ultimately, businesses need to be proactive and not reactive.
#1: Understanding Customer Needs:
Ultimately, each business needs to understand customer needs. When you fail to do so, you won't be able to deliver what your customers want and are looking for. But more than looking for the right products to sell, it is also important to find the best ways to deliver these products.
Since online shopping is likely to maintain its current trend or even increase, businesses must be ready to satisfy their customers the best way they can.
The truth is that up until now, many businesses continued to only allow in-store pickup, for example. However, more and more consumers are looking for comfort, and they genuinely prefer to get their products delivered at home. So, as a business owner, you need to understand what your customers prefer not only in terms of products but also in terms of delivering those products.
In case your business only has a physical presence up until now, it is time to change. According to many reports, online shopping will continue to grow in the years to come. So, making your products available online as well is extremely important. You may prefer to develop a website or even a mobile app. However, no matter what you choose, you need to act fast.
#2: Improving Order Fulfillment:
The reality is that order fulfillment is a complex process. After all, it encompasses everything from the point of sale to delivery to the end customer.
With eCommerce sales increasing, it is natural that more companies are looking for partners to help them out with this process. Since the main goal is to improve accuracy while meeting demands for rapid delivery, having a partner like CDL Logistics can help your business. Working with EDI, API, and other integrations, we can process orders quickly and efficiently.
Simply put, CDL Logistics has fulfillment centers located strategically in the USA and the U.K. to assure that your orders are delivered quickly.
#3: Decreasing Shipping Costs:
One of the reasons why so many businesses still don't have an eCommerce store is shipping costs.
Notice that it is important to keep in mind the countries that you are targeting.
As you can easily understand, if you are based in the United States and don't take international orders, the shipping costs will be lower than if you were taking international orders. On the other hand, you may be losing many customers by only focusing on the U.S. market alone.
In addition, international orders take more time to get delivered. These are all important questions you need to ask yourself before you even set up your eCommerce store. After all, shipping prices will need to be different to ensure that you don't lose money and maintain your margins.
No matter if you are looking for shipping locally or internationally, CDL Logistics can help you ship your orders faster.
A very important aspect that you can't forget about our returns: you may be selling the best products in the world, but there will always be someone who doesn't like them and wants to return them. At CDL Logistics, we make this task easier for you as well. Once we receive the customer's product, we perform a quality control check to assess the condition.
We then determine if there is a possibility that it may be reprocessed, repackaged, and relabeled or if it needs to be disposed of. We work with you on this whole process and to ensure you get the most value.
#4: Add More Value To Customers:
We don't have to tell you that adding more value to improve your customers' experience is always a good approach. However, you should also need to take into consideration the costs involved. Sometimes, adding more to a package may increase the shipping cost, which may not be the best way to go. But you have many different options to add more value to customers:
- Special Handling: One of the options you may include for your customers is gift messaging, gift wrapping, or even gift engraving. At CDL Logistics, we can handle this type of packing process.
- Efficient Packaging: We understand that shipping costs can be high for most businesses. This is why we take all precautions to ensure that we optimize the packaging of your products. While shipping costs are a fixed cost, we will help if there is any room to make it lower.
- Marketing Materials: Some businesses like to include specific marketing materials in their packages. At CDL Logistics, we can do it for you no matter if they are coupons, a summary about your brand, or even customer service information.
There's no question COVID-19 had a huge impact on all our lives. From individuals to businesses, we are now living in a new world where we need to adapt.
As a business, you need to be ready to deliver what your customers want when they want. So, it is crucial that you adapt to the increase in online shopping.
CDL Logistics can help meet your business needs and growth demands.
Contact us to see how we can make a difference to your business.