There’s a lot of doom & gloom at the moment. Perhaps quite rightly. COVID-19 has torn many industries in Australia (and around the world) to shreds in a matter of weeks. Hospitality, events, entertainment & sport just to name a few.
But what about the impact on eCommerce businesses. Myself and probably many others have been planning for the worst. Given the uncertainty, we’re not just unveiling a Plan B, we’re deep-diving into a possible Plan C, D, E, F etc etc. There are many factors at play.
The majority of the population are now in some form of isolation. That means they’re only going out to buy essentials – groceries, food, alcohol, medicine etc. However, does that mean they’re not spending at all, or they’re now spending more online?
This has been an intriguing thought for me over the last couple of weeks and I’ve been waiting to see what the result will be on discretionary products. Quite rightly brands have changed their messaging. Here’s a screenshot from the Adidas homepage:
Brands have adapted reasonably well, although some better than others in terms of their content and how they’re communicating with customers. In my view, it’s almost insulting to carry on like it’s business as usual and not addressing the issue in some format. BTW, please don’t send a generic email to your database just to say that you acknowledge that coronavirus is here. My inbox is full.
I think that 2020 is going to be a tough year (ha yeah, thanks Captain obvious). But hear me out. COVID-19 for many eCommerce businesses has already had an impact. For one of my businesses, it has been the ability to actually get our stock delivered from suppliers. Not only did factories in China close for 8 weeks, we now have mass flight cancellations and there is a significant strain on the system in bringing items into the country.
This by no means will be referenced in any article on earth (except for this one), but I put a poll out to my Instagram followers with a simple question: “Since being in isolation have you spent more or less money online than usual?”. 75% said they are spending more. That’s probably not surprising. People have more time at home, less commute times, less socialising, less events, weekend activities etc. Therefore, they have the time to browse and purchase online and get it delivered straight to their door.
Additionally, it’s certainly frowned upon to be roaming shopping centres, so for goods that people want to buy such as books, a new hoodie for lounging or a new bedspread – they’re going online. A few people left a comment with their answer, many of which reflect the above sentiment. A number of people simply said they were bored!
I also posed the question in my Facebook group for eCom entrepreneurs and 70% said they have seen either the same or increased revenue since COVID-19.
My concern for 2020 goes beyond the current period of isolation.
I don’t claim to be an expert economist, but I generally keep my finger on the pulse in terms of what’s happening in the macro economic/political landscape. The risks of a domestic recession have increased. If a recession occurs there’s likely to be even further job losses, hardship and frankly, cash hoarding.
People are going to be hanging onto cash like it’s toilet paper. Which means less spending. Which means less revenue. Which could spell trouble for not just the industries that I mentioned at the top of this article, but all businesses.
There is only one thing certain about 2020, it’s going to be unpredictable.