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    17 March 2020

    The impact of COVID-19 on e-commerce: what can we expect to see change?

    Events are canceled, schools have suspended classes and (most) physical stores are keeping their doors closed: social distancing is the new black.

    As the COVID-19 virus spreads rapidly throughout Europe and within Belgium, companies are compelled to take responsibility and adapt to the situation. But what's the impact of the virus commotion on e-commerce?

    Julie Luppens, one of the e-commerce experts at The House of Marketing, expects e-commerce in Belgium to boom these next few weeks/months, partly due to various actions online businesses are taking. We first look into those measures, before discussing 3 trends identified in the recently launched E-commerce Barometer 2019 – and how they will evolve in times of COVID-19.

    E-commerce continues to grow

    The E-commerce Barometer 2019 already showed e-commerce is booming in Belgium: last year, webshops generated a total of €8.2 billion in revenue.

    Julie and our other e-commerce experts believe the current situation will positively affect the growing number of online sales: “Shopping online, avoiding mass contact, offers a huge advantage at insecure times like these.”

    People are even encouraged to do so: in an interview with De Tijd, economist Gert Peersman called citizens out to consume as much as possible: “Spend the money you’re saving by not going out to restaurants on online shopping, order champagne at home or buy a digital newsletter subscription.”

    Based on recent news that Amazon is hiring 100,000 employees to meet their growing demand, seems his message is being heard.

    Amazon hires 100,000 workers to meet rising demand

    Measures to boost e-commerce

    Due to governmental regulations limiting their offline operations, businesses are taking measures to keep their online sales going. These past couple of days, we’ve witnessed the following actions:

    • Discounts/free shipping: Businesses that are forced to close their brick and mortar stores are offering discounts or free shipping options to push their online sales. Examples are legion, and many small businesses are following this trend, announcing their promos via social media.

    Discounts/free shipping to boost e-commerce

    • Flexible policies: KLM and Brussels Airlines, for example, have announced zero change fees on bookings. Even Ryanair has jumped on the bandwagon, which means serious business… In the fashion industry, where returns are quite high, it could help to offer free returns for new customers. This lowers the barrier and builds trust to buy from a brand when consumers are still uncertain of sizing and quality. The same goes for furniture and decoration businesses.
    • Hyper-personalization: When you’re in a physical store, your experience is enriched by the advice of a shop employee. Hyper-personalization is a way to add this missing link to your online experience. Many webshops already show “other items you might be interested in” when products are added to a cart, but a chatbot or live chat (available at dedicated times) could be alternative channels. Think about the new kind of customers that are starting to buy online for the first time; they’re probably a bit lost and could use guidance. Should you add such initiatives, make sure you communicate clearly about offering a personalized experience.

    Julie adds: “Due to the closing of offline stores, businesses that don’t have a webshop are encouraged to look at the alternative of social commerce, selling through Facebook or Instagram. Those in-app purchases have the advantage of keeping customers on the same platform to complete a search or sale, reducing the risk of customer abandonment.”

    Belgian e-commerce trends: how will they evolve?

    TREND 1: The average basket value is decreasing

    Last year, we noticed the average basket value decreased, meaning customers spent less per online purchase. This decline is most likely due to the fact that people have started buying less expensive convenience goods.

    Says our e-commerce expert Julie: “Consumers will buy even more convenience goods online, of which food is a major category. With many hoarders leaving supermarket shelves half empty, consumers will probably turn to initiatives like Collect & Go, Hello Fresh, Little Green Box, eFarmz or Foodbag. That way, they avoid crowds, and instead order their food online, which they can pick up or have delivered.

    Such subscription models will most likely become even more successful. People will discover the convenience of buying foods online, and change their long-term online shopping behavior. That’s why we expect the trend of a decreasing average basket value to continue. This decline is also linked to the free shipping cost: consumers often don’t need a minimum value anymore to validate their order.”

    Since local restaurants are hit hard by the current health crisis, they’re looking for solutions to keep their food business going, like the set-up of a temporary catering service. 

    Restaurants starting temporary catering services in times of COVID-19
    Delivery providers, in turn, are also adjusting to the current situation: Takeway.com and Uber Eats have notified their customers of their new contact-free delivery option. If customers select this option, the courier rings the bell and leaves their delivery by the door. 

    TREND 2: Saturday at the least busy day for online shopping

    The e-commerce report indicated Wednesday as the busiest, and Saturday as the least busy week day for online shopping in 2019; the latter probably due to the fact that Saturday is the most popular day for offline purchases.

    According to Julie, there will be a shift in this trend: “In March and April, Saturday will probably be the busiest day for online shopping, because offline stores are closed. That’s why we recommend businesses update the planning of their online campaigns. While they usually focus on Sundays, they should make sure they communicate about discounts or other specific actions on Saturdays.”

    TREND 3: 25% of online revenue comes from foreign shoppers

    In 2019, 1 out 4 euros came in through foreign shoppers – most of them from France and The Netherlands, followed by the UK and Germany.

    It’s hard to tell how this will evolve, since the situation is similar everywhere. E-commerce will probably increase in all countries, but it remains to be seen if consumers will buy more local or cross-border. These days, social media is overflowing with calls to support local businesses; consumers might want to stick with brands they trust and that give them a sense of safety. Then again, they could take more time to compare and look for good pricing.

    Calls to shop local during the health crisis of COVID-19

    Whatever the case, Julie advises including foreign shoppers in online campaigns: “Businesses that are running online campaigns should expand their targeting; not doing so would be a lost opportunity. Webshops in France, The Netherlands, Germany and elsewhere will most likely target Belgian shoppers as well – so it’s key to keep a cross-border mindset.” 

    Conclusion

    As this health crisis is increasingly impacting our economy and public life, businesses are forced to pin their hopes on alternative solutions. E-commerce is one of them, which is why we’re expecting a significant increase in the number of online sales. By the time we release the E-commerce Barometer 2020, we predict the crisis to have impacted the picture of 2019, demonstrating a change in basket value and the peak moments for online shopping.

    While you’re at home behind your screen and taking time to get inspired by e-commerce best practices, feel free to connect. For the full state of Belgian e-commerce and the performance of webshops, take a look at the E-commerce Barometer.

    DISCOVER THE E-COMMERCE BAROMETER 2019

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