With the outbreak of the Coronavirus 2019 (COVID-19) pandemic, economies around the world have experienced significant disruptions, with no clear end in sight. Sectors such as tourism, retail, and Horeca are among those likely to be most affected.
Let’s examine changes in the retail sector and developments in e-commerce. While most retailers have temporarily closed their physical stores, it seems that many in the retail industry are likely to make a major shift to online commerce.
Currently, food and hygiene products are prioritized in e-commerce shopping. In March, clothing sales dropped by 47%, while food and cleaning products saw an increase of over 20% (TÜİK). The COVID-19 pandemic, with its requirement for social distancing and the shift of both work and personal lives back into the home, has prioritized food consumption and the fulfillment of needs suitable for home life. The inability to go out shopping has also heightened the importance of e-commerce. During the COVID-19 period, we’re witnessing an acceleration in the online sales of food products, which had already begun, as well as a variety of brands, even those unrelated, starting to sell food and household items through e-commerce sites. For example, the men’s clothing brand Kiğılı has started selling grocery items.
Direct-to-consumer sales of fast-moving consumer goods (FMCG) through e-commerce channels had already begun, with investments slowly increasing. However, it appears that the e-commerce transition for FMCG and the availability of these products online will be fully realized by the time the COVID-19 period is over.
Retailers are currently facing various challenges. Those without e-commerce sites are flocking to online marketplaces like Trendyol and are trying to establish their own e-commerce sites. Those who already have online sales have noticed a drop in website visitors. As a result, it has become more important than ever to make the most of incoming traffic and work to increase conversion rates, which teams are actively strategizing around.
As seen in this source tracking global e-commerce data, e-commerce is currently showing a decline in overall consumer spending—a likely situation given the circumstances we are in.
The key is to manage this period with minimal loss and to set medium- to long-term e-commerce strategies. While e-commerce volume may be declining during this time, it’s well recognized that the future of retail lies in e-commerce.
What steps can you take to digitize your retail experiences and maintain sales through your e-commerce channel?
Offer flexibility in payment, loyalty, and delivery options
As new norms of social distancing emerge, we are beginning to see the economic impacts of this pandemic. Experts predict that real global GDP could shrink by as much as 1% worldwide (source: Salesforce), and all sectors will feel this impact. Consequently, consumers will need more or new payment options for online purchases.
Companies can support consumers by expanding loyalty offers, extending gift card validity periods, and offering longer payment cycles. For example, various automotive companies began offering credit assistance during the pandemic. Ford is using its existing television ad placements to provide flexible financing options to national audiences.
Offer customers additional shipping and delivery options that don’t require signatures or involve contact at delivery. For instance, Getir immediately implemented this with a “leave at the door” method.
Create new digital and social media experiences
Retailers are now facing an entirely digital customer base. In this situation, previously tested online and physical experiences may not be as effective. It’s time for retailers to use their entire workforce to think of new ways to connect with customers.
However, while doing this, they must carefully consider the dynamics of the current COVID-19 period. Emphasis should be placed on social media communication, improving service and marketing processes, and ensuring integrated operations. If you don’t yet have an e-commerce infrastructure, you should take action for this immediately.
Bring Your Mobile Commerce Applications to Life
Even though people are currently at home and using desktop computers, prepare your infrastructure for the reality of the mobile world and mobile applications. This stagnant period, where our homes have become our offices and gyms due to COVID-19, will pass, and mobile living will return. Use this time to develop your mobile application.
We can help you quickly transition to a seamless e-commerce infrastructure that provides an excellent customer experience. Contact us now.
- Check out SAP E-commerce applications.
- Visit our Mobile Commerce page.
