COVID-19 demanded a lot of changes in the way people live their daily lives. One of the most extreme measurements introduced is the lockdown. It spread to the global level in 2020. People were not able to visit physical stores. Therefore, they switched to online shopping. In fact, 7 out of 10 shoppers said that they started to buy more online than they usually do because of the lockdown, according to SearchNode.
It seems that most e-commerce companies saw their online revenue increase during the global lockdown in the Spring of 2020. 90% of companies saw their online sales increase at least a bit, with 50% of respondents claiming it grew by over 100%. However, 6% say their e-commerce revenue decreased during the lockdown.
After the lockdown, many consumers started shopping at brick-and-mortar retailers again. Still, 86% of respondents say their online revenues increased and only 4% say it decreased.
Impact on e-commerce profit margin
COVID-19 touched commerce businesses on various levels. Companies needed to address many challenges, directly affecting the online profit margin – from disrupted supply chains to more aggressive competition. According to SearchNode, 38% of e-commerce decision-makers saw their online profit margin grow during the global lockdown. On the other hand, only 15% claimed that it decreased.
Impact on the workfoce
Another sphere where retail had to react fast, and make adjustments, was their workforce. Approximately 44% said they had to relocate staff, while three in ten hired more people. On the other hand, 26% had to fire some employees and 15% say they had to reduce their employees’ salaries. Surprisingly, 5% managed to increase salaries. Even more surprising, 21% of companies did not adjust their workforce at all.
Companies with physical stores had to implement some alterations in the way they operate. Many new practices were introduced last year. Among the participants, 31% introduced in-store pickup, while 26% chose to introduce home delivery. Unfortunately, about one in five had to shut down physical stores for good.
Main challenges for e-commerce
COVID-19 has heavily impacted online retailers. Among the main challenges for e-commerce businesses, disrupted supply chains and fulfilling demand for products were the mostly mentioned ones. In addition, limited operations due to the lockdown, managing inventory, and overall lack of employees were also some key challenges for online retailers. Furthermore, 17% said it was challenging because they need to close their physical stores.
Moving on, another interesting point to explore was how the overall strategic vision was affected by the COVID-19 outbreak. 45% of the comments will now have more focus on the digital part of their business, by adjusting assortment, investing in new e-commerce software or focusing more on online marketing channels.
One in five said they would intensify actions, meaning they need to execute their strategies and act faster. Moreover, one in ten say they are now focused more on physical stores adjustments, and 8% went for supply chain adjustments, from minor ones to completely new supply chain or logistics.
Interestingly 3% of participants say that the overall strategy was not changed at all. Another 3% stated that they believe in short-term plans. And lastly, 3% claimed they had to significantly change their strategy and craft a completely new one.
Measurements for 2021
There were still only some signs of the strict lockdowns being brought back globally. Currently, new lockdowns are already imposed on different degrees of restrictions in some countries. This only proves how swiftly the situation can change in a matter of a few weeks.
70% of companies said that they are preparing for another situation similar to 2020. Interestingly, 20% of participating companies say that they are not preparing for another lockdown at all.