THE IMPACT OF COVID-19 ON E-COMMERCE

Author: Ebrahim Mazaheri

Associate Professor, Lazaridis School of Business & Economics, Wilfrid Laurier University, Canada

This Book

The COVID-19 pandemic has had severe economic consequences, and it’s fundamentally changing business operations and consumer behaviours around the globe. With consumer needs rapidly evolving and global networks being disrupted, the crisis is undoubtedly on track to transform the future of business. Leveraging the insights provided by Scholars from different domains, the chapters in this book offer varying perspectives on the impacts of COVID-19 on e-Commerce.

As cited by the World Health Organization[1], “COVID-19 is a disease caused by a new coronavirus called SARS-CoV-2.” The first cases were reported on Dec 31, 2019, in Wuhan, China; shortly after, it was discovered that the virus can spread very easily from person to person through droplets released into the air. To prevent the spread of the virus, health organizations recommended social distancing and wearing medical masks in public settings. Governments all over the globe took drastic measures to control the spread of the virus. While different approaches have been used, the most common measures to date are shutting down non-essential businesses, such as gyms, movie theatres, indoor playgrounds, and limiting essential business operations, such as taking out only for restaurants. Furthermore, many companies have allowed employees to work from home; schools and universities offer their courses remotely.

Throughout the year of 2020, the morality and likelihood of contracting the virus was unknown; heavily impacting consumer behaviour. Different countries and sources provided varying ratios, misinformation was reported across media outlets, and conspiracy theories gained traction over the internet. The unexpected virus variants also contributed to the level of concern among society. In order to navigate the uncertainty associated with health and economic outcomes, consumers have been forced to significantly alter their decision-making processes.

Consequentially, government forces and consumer demand patterns increased the need for online shopping.  According to a recent Bloomberg report, in Feb 2021, almost half of the customers in the U.S. bought most of their holiday gifts online[2]. Kohli et al. (2020) stated that online delivery accelerated by ten years in 8 weeks in response to e-Commerce deliveries. They also discussed the short and long-term changes in consumer behaviour and suggested that the surge in e-Commerce behaviour is an enduring consumer behaviour change. In line with this suggestion, Globe and Mail reported that 84% of consumers would continue purchasing online after the economy reopens[3]. In this book, Nicolai and Grange’s chapter shed light on the nature and scale of retail actors’ digital responses to the pandemic’s disruptions across three countries; China, France, and Canada. Their study looked at pre-pandemic and post-pandemic digitalization of retail in the respective regions. It assessed the digital innovations used in those countries in support of customers’ pre-purchase, purchase, and post-purchase stages.

As previously discussed, the COVID-19 pandemic has accelerated the adoption of e-Commerce. One industry in particular that experienced a surge in online demand is the food and beverages sector. In 2019, over 80% of adult customers in the U.S. never ordered groceries online (Jones and Kashanchi, 2019).  This percentage was changed significantly in less than a year. On May 27, nearly 80% of U.S. customers shopped grocery items online (Redman, 2020). Online grocery sales soared from $1.2 billion to $7.2 billion in less than a year (Morgan, 2020). In this book, Mkansi’s chapter investigated the impacts of COVID-19 on e-grocery retailers in South Africa.

In another study, Briedis et al. (2020) looked at changes in customers’ expectations of retailers during and after the pandemic. They concluded that investing in e-commerce and injecting innovations into omnichannel is vital for retailers to improve customer experience and remain relevant. In this book, Qiu and Yang observed businesses’ omnichannel operations and how the COVID-19 pandemic impacts them. They concluded the chapter by highlighting the opportunities that COVID-19 provides for businesses to invest in their omnichannel operations.

In this book, Watanabe and Omori’s chapter discussed online customer consumption during the COVID-19 pandemic and investigated the likelihood of the trend persisting once COVID-19 subsides. Using credit card transaction data in Japan, the authors compared customer groups’ increased spending in online shopping before and after the pandemic. They predicted that a certain portion of the increase in online consumption is likely to fall away after the pandemic. Along the same line, Kovalenko’s chapter investigates how older adults adopt new technology and become internet savvy during the pandemic. They discuss factors affecting older adults’ adoption of online shopping and identify the industries that those customers would continue purchasing online after the pandemic.

The COVID-19 pandemic forced leaders to accelerate the shift to digital platforms.   An article published in the Globe and Mail[4] recommended small businesses boost their digital game. Regardless of the industry, small businesses must embrace a digital vision, digital strategy and culture, as well as new technology and tools. In some industries, such as the entertainment industry, businesses need to reinvent their business model. In this book, Kiani and Seifzadeh investigated the impacts of the COVID-19 on the transition of the business model of indoor play centers in the US from traditional platforms to digital platforms and e-commerce.

Lastly, the financial impacts of COVID-19 on businesses varied across sectors. While many businesses filed for bankruptcy or experienced a decline in market value, e-commerce companies (e.g., Amazon, eBay, Wayfair, and Spotify) share prices’ soar during the pandemic (Vlastelica, 2020). In this book, Babenko and Nehrey’s chapter assessed the risk of investing in e-commerce companies.

The impacts of Covid-19 on business will be long-lasting and will continue evolve as societies enter into the new state of normal. Scholars with different backgrounds will be investigating the long-term impacts of the pandemic on customers and businesses in coming years. This book is the first step to identifying the effects of the COVID-19 pandemic on e-commerce and providing future guidelines for future studies.

[1]https://www.who.int/emergencies/diseases/novel-coronavirus-2019/question-and-answers-hub/q-a-detail/coronavirus-disease-covid-19

[2] https://www.digitalcommerce360.com/article/coronavirus-impact-online-retail/

[3] https://globelink.ca/globe-insiders-ecommerce-insights/

[4]https://www.theglobeandmail.com/business/adv/article-as-e-commerce-expands-small-businesses-need-to-boost-their-digital/

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