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1 April 2020

What could block the e-commerce boom in times of COVID-19?

The recent announcement by the Belgian government that the coronavirus containment measures would be extended by two more weeks goes to show that this is an ever evolving crisis.

In a previous article, we predicted a significant boost in online sales, due to the closure of most physical stores. Today, Belgian e-commerce is going through its maturity phase, which is proven by the growing number of new market players and the creation of valuable customer experiences. We’re  doing everything possible to make e-commerce grow and mature, and therefore expect an even more sustainable growth in the long term.

While we see the numbers of e-sales increasing, there have been a few phenomena standing in the way of the success of e-commerce worldwide – think of retailers being overwhelmed by requests for collect services or IKEA’s announcement about their limited webshop offer.

In this post, we identify possible blocking factors for e-commerce, divided into 2 main groups: operations & customer expectations. In addition, we share tips for webshop owners to survive during and after these challenging times.

Blocking factos for e-commerce

OPERATIONS

Due to strict governmental regulations, numerous webshops can’t run their business like before. We’ve looked into a few realities that limit their operations.

  • Limited drop-off locations

When it comes to sending parcels, many webshops partner with transportation businesses that offer collection points. Courier company Mondial Relay, for example, only distributes packages to dedicated locations. Nowadays, many of such drop-off points are closed or operate during restricted opening hours. This shows home delivery is the best option for webshops during these challenging times – for those who didn’t offer the option before, it’s a good time to invest in it.

JBC, for example, is one of the brands that has adjusted their offer: instead of free delivery in their stores, they’re now offering free delivery at home. And IKKS has limited their options to home delivery only.

Fashion brand IKKS limiting their offer to home delivery

  • Marketplace collaborations

Amazon offers different package deals for webshops, including a full experience (Fulfillment by Amazon” (FBA) program), which means they offer their logistics to store and dispatch products. Due to the COVID-19 crisis, they have stopped this service for their third-party sellers, giving priority to categories they classify as essential products (like health & household and groceries). Their objective is to quickly receive, restock and ship these products to the end consumer. As a result, items might be out of stock in the coming weeks or sellers will have to ship their items directly. Bol.com also advises their partners, webshops selling on their platform, to focus on products that are indispensable (e.g. personal or baby care), facilitate homeworking (such a computer screens, printers, headphones, etc.) or make staying at home more bearable (like entertainment, sports equipment, gardening tools, etc.).

While a marketplace is generally a valuable option, either as a replacement or addition to a webshop, it depends on your industry whether now’s a good time to invest in such a partnership.

  • Reorganization of the way of working

Some webshops are unable to follow up with their demand due to a lack of back-end support or staff. eFarmz, a Belgian supplier of food boxes, recently experienced a crash of their site because of a spike in the number of online orders. Reshuffling the way of working can also mean less active employees or adapted working hours (for example, extending working hours and shifts) or reprioritization.

In addition, if social distancing can’t be guaranteed, businesses are forced to reorganize their operations. An example is IKEA, that has limited the range of articles available in their webshop to comply with the regulations.

There are even retailers that decide to close their online shop, although they’re still allowed to remain open, and could capitalize on the closure of their physical stores. British fashion retailer Next is one of them, announcing: “We have listened carefully to our colleagues in our warehouses and distribution operations. It is clear that many increasingly feel they should be at home in the current climate. As a result, we have taken the difficult decision to close our warehouse and distribution operations until further notice.” Other brands that have followed the example of closing their distribution center are Net-a-Porter, Patagonia and River Island.

Net-a-Porter closing their webshopCUSTOMER EXPECTATIONS

As this crisis evolves, so do the emotions consumers are going through. Expectations have changed, and businesses should recognize this ‘new normal’.

  • Because of social distancing protocol, many consumers don’t feel comfortable going back and forth to return parcels. In addition, post offices have limited opening hours these days. Counter this fear by avoiding high returns. Do so by informing customers properly about what they’re buying, for example through chat sessions or virtual shopping assistants. These options also provide an answer to the end of the omni-channel experience for now, mimicking the personal approach of a physical store. It’s also a good idea to look at your data: which products have a low return level? Communicate about these and build trust – for example: “95% of customers are happy with this product”.
  • Be transparent: your customers count on your honesty, especially in these insecure times. Transparency is crucial when it comes to delivery times in particular. While in the past you might have been able to deliver within 24 hours, this might not be the case anymore. Avoid disappointment amongst customers that are expecting instant gratification by communicating clearly, like for example bol.com does on their website. Consumers will show understanding; after all, we’re in this together.
  • Pay attention to sensitivity by corona-proofing your campaigns. Don’t show how this crisis could be beneficial for your shop; every crisis starts with a forgiving phase and evolves to a blaming phase – you don’t want to be part of the latter. That’s why it’s not a good idea to offer high discounts pushing people to buy more; most consumers are anxious and don’t want to see others take advantage of the situation. Hence, this is the perfect time to do a thorough audit of running and upcoming online & offline campaigns. Along the same lines, don’t promote articles customers can’t use during these sunny lockdown moments. Offer products that are relevant; flowers, yoga mats, … are golden examples, because they’re items people can use and feel happy about.

These uncertain times are also an opportunity to do good and show you care: Belgian webshops like Torfs and JBC are communicating actively about their support to a good cause.

Torfs supporting a good cause

What if...?

Let’s hope we’ll never get there – but what if measures become stricter? If Belgium went into full lockdown like Italy and Spain, this would make physical delivery impossible (except for food and other essentials). Industries like fashion or gaming would have to put their businesses on hold. If we were to ever land in that situation, it would be crucial to:

  • Continue communicating with prospects and customers and inspire them with newsletters and social media content, for example
  • If the focus can’t be on sales and conversions, it should be shifted to enriching data. This process of requesting additional data about interests can serve as input for personalized campaigns
  • Find creative ways to keep selling, like vouchers at discount prices, pre-bookings that are paid later, or “buy now, get later” campaigns

Business owners who don’t have a webshop but have had to close their brick-and-mortar store should already apply these recommendations today.

Another element that contributes to strengthening webshops is increasing visibility through less obvious channels. While this crisis has hit the operations of many brands, regardless of size or whether they run a webshop, the public call for “winkelhieren” (the word of the year 2019) or “buy local” sounds louder than ever. Small business owners and influencers are massively sharing the social media accounts of fellow entrepreneurs or other local brands. This creates a sense of togetherness. Another initiative is this Facebook page, a collective that was created to group together all webshops, an opportunity for more visibility, including for those that don’t have a real webshop today.

Conclusion

While this crisis challenges businesses to reorganize their processes and meet changing customer needs, we’re still observing a significant increase in e-commerce in general. We expect this trend to continue for as long as strict measures are in place, and afterwards: businesses are finding creative ways to keep their sales going.

Although we expect the number of online sales to keep rising, at the other side of the spectrum are businesses that decide to close their shop for the good of their staff. This shows that while e-commerce is growing in some industries, this isn’t the case for all. What the impact will be on online sales in general, remains to be seen.

If you want to know more about our Belgian e-commerce landscape, be sure to read our E-commerce Barometer 2019.

DISCOVER THE E-COMMERCE BAROMETER 2019

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