The Impact of COVID-19 On E-commerce (and What 6 Innovative Shopify Partners are Doing About It).

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Covid-19 Impact on E-commerce
Covid-19 High street

How is COVID-19 affecting e-commerce industries? Find out the good and the bad, and how Shopify Partners are taking a stand.

Life in a pandemic has transformed almost every aspect of our lives. While many are binge-watching Netflix and browsing the web, others are readjusting to homeschooling and Zoom meetings. 

We’re seeing major changes in consumer habits – more online spending due to closures of physical stores, nation-wide lockdowns in the UK, Italy, and other countries; and a whopping 93% of Americans under stay-at-home orders.

In March and April alone, there was nearly a 50% surge in e-commerce orders. Unfortunately, not every e-commerce industry is witnessing the same positive impact. 

Let’s take a look at the state of e-commerce during the pandemic. 

Which E-Commerce Industries Are Seeing a Spike in Sales?

COVID-19 has wreaked havoc across many industries, including travel, hospitality, and gyms. But it’s been the complete opposite for certain U.S. online retailers, some of which saw an impressive 68% YoY revenue boost

And it’s the same across the world.

Take for example the fashion industry. While local retailers were shutting down, we saw a surge of online purchases for clothing and accessories across the U.S. (37%), U.K. (49%), France (25%), and Germany (64%). 

It’s the same with toys and games, too. Folks are at home with bored children and it’s led to a 4,000% spike in YoY sales on Amazon alone.

The home fitness equipment industry in Poland saw sales grow between 100% and 639% for Dumbbells, training benches, and bikes. And with more people working from home, sales of office supplies have increased by 163%

E-Commerce Industries Disrupted By COVID-19

Local retail shops shutting down due to CV-19 was a given. However, the effect has crossed virtual lines and is also affecting online businesses, like TJ Maxx, HomeGoods, and Marshalls. 

With the shelter-in-place orders in effect, these businesses had to close both its stores and fulfillment centers. 

Fashion companies like Reformation (in California) and The Frankie Shop (in New York), had to do the same. 

Other e-commerce categories seeing major declines include:

  • Luggage (77%)
  • Cameras (64%)
  • Men’s swimwear (64%)
  • Men’s formal wear (62%)
  • Bridal wear (63%)
  • Women’s swimwear (59%)

Even smartphone sales took a hit, sales for mobile devices plummeted 13% compared to last year. 

How E-Commerce is Adapting Using Immersive Technology

If there’s any lesson being taught by COVID-19, it’s that virtual technology is the key to maintaining connectivity among people (and businesses). 

The fashion industry has taken note of this and is applying immersive technologies to reconnect with customers. This includes teaming up with tech giants, such as Microsoft and LucasFilm to put together virtual catwalks and other digital fashion solutions

With this technology, fashion brands will be able to develop virtual showrooms and clothing for consumers to browse through and “try on.” 

One innovative company is The Fabricant, which is a virtual fashion business that produces nothing but digital clothing. They have worked with lifestyle brands like Napapijri, creating digital clothing samples, and reducing textile waste.

The Impact of COVID-19 On Subscription-Based Businesses

More than half of subscription-based services (53%) have gone through the pandemic unscathed –– no increase or decrease in sales. Those seeing a positive impact include video streaming services, e-learning, communications software, and digital news/media. 

However, nearly 23% of companies witnessed an increase in growth, including B2B and B2C software and information services. 

Less than 25% of the remaining businesses have either slowed in growth or saw a decline. 

The industries adversely affected include:

  • Travel
  • Hospitality
  • Sports
  • Consumer IoT
  • Business IoT 
  • Software for small businesses
  • Memberships (gyms, clubs, etc.)

Those that focus on retaining their current customers will likely make it through the pandemic. One way businesses are achieving this is by focusing on empathy and philanthropy vs. sales. 

How Shopify App Companies Are Using Empathetic Gestures

COVID has dramatically changed the Shopify Partner ecosystem. And as a Shopify Partner, you want to find ways to give back to merchants. There are several ways you can do this, such as offering discounts, free trials, or even fundraising for a cause. 

Tobi Lutke, the CEO and Founder of Shopify, is doing everything in his power to support merchants during the pandemic. Tobi recently partnered with his wife, Fiona to combat carbonisation with their Thistledown Foundation. But that’s on hold whilst they focus on helping merchants and partners through COVID.

Here’s a look at several real-world examples of Shopify App Companies giving back:

Privy set up a relief program to help small businesses stay open. And so far, the community is 2,500+ strong. 

Zapiet is offering a 45-day extended trial to businesses offering store pickup and delivery services. 

Okendo is offering 50% off the first 90 days to new customers (plus, they’ll set everything up).

Hip Gloss Productions is offering to pay 50% of web development costs to small businesses.

Allegra Designs is offering 30% off to brick-and-mortar stores that want to get online. 

Goodcarts has taken it even further by going 100% free and they’re not taking any commission for the rest of 2020. 

You can do something fun, but equally meaningful like the Giving Five Challenge. This movement is all about giving back, no strings attached.

Giving Back is the Key to Thriving During CV-19

The e-commerce industry is seeing its fair share of ups and downs. Some of the effects of COVID-19 are manageable, while others are completely outside of our control. 

However, this doesn’t mean you should give up. By being innovative and focusing on the needs of your customers, you’ll find it easier to attract and retain them for the long-term.

As a ray of hope – Shopify’s shares are seeing mid-market gains. And the platform is well-positioned to see an even stronger comeback in 2021. 

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