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Embracing E-Commerce as the New Norm

The COVID-19 pandemic has impacted jobs, remote learning, an increase in cooking and fitness at home, and a large increase in e-commerce among all industries. With stores being closed, fear of exposure to COVID-19, and the high demand for household necessities, consumer preferences shifted quickly and almost immediately from in-store purchases to e-commerce consumption.

According to experts, e-commerce has seen ten years of growth in 8 weeks.

The E-Commerce Consumer Experience

Giant online retailers like Amazon are taking full advantage of the forced consumer preference change. Since non-essential stores closed during the pandemic, more and more consumers went online to shop, with the convenience of receiving their orders without leaving their homes. Even with essential items like groceries and household items, apps like Instacart made it available for consumers to shop at their local grocery stores (i.e., ShopRite, Stop and Shop, and Acme) without having to leave their home. Instacart gives the consumer peace of mind by not having to risk going to the grocery store and potentially contracting the virus. This app also allows the consumer to shop virtually with the Instacart worker with a chat function through the app, allowing for any substitutions or last-minute additions to their order. This chat function provides some comfort during the process.

E-Commerce New Target Audience

Many consumers who used online grocery shopping during lockdown did so for the first time. Now, companies are upping their online marketing and feel that they are incentivizing a whole new category of consumers who just got their feet wet with store to home grocery delivery. Consumers like the idea of contactless payment, in-app ordering, and home delivery. Recent statistics show that when asked the question, have you purchased groceries online, the percentage of people that said yes increased from 36% in 2018 to 55% in 2020.

E-Commerce: Temporary or Permanent?

According to a recent population study, approximately 50% of the United States population is related to Millennials and Generation-Z. The growth of these generations will contribute to the development of e-commerce since these generations have grown up in the digital world. Even if COVID-19 disappears, we will continue to see an upward trend of e-commerce consumption across the globe and, more specifically, throughout the United States because of the concentration of these younger and more digitally-driven populations.

E-Commerce Strategies for Retailers:

As many brick-and-mortar retailers have reopened, total occupancy is limited. Many shoppers were anxious to return to their favorite store upon reopening, while others would preferably online shop. This dramatic shift in preference has caused retailers to enhance their e-commerce strategies.

Following are some considerations given the consumer preference shift over the past year: 

e-commerce business strategy

As we weather the storm from the pandemic, consumer preferences can change quickly. Refocusing your strategy during challenging times can be overwhelming, but it can be accomplished by keeping on top of trends and working closely with your advisors. Contact a member of our consumer products team to learn more about how consumer trends can impact your business.

For questions or further information, please contact a member of Withum’s Consumer Products Services Team.

Author: Jordan Ghaffari, CPA | jghaffari@withum.com

 

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