Last updated - July 8, 2021
There’s no escaping it now. Wherever you look, the coronavirus pandemic has caused disruption and chaos – from the places you can visit, to the activities you can do, to your work or school life and the way you spend your money. The world’s economy is declining as major businesses are shutting down and industries are experiencing severe loss as operations cannot take place without the presence of workers. In this scenario, e-commerce stores are safe as they aren’t required to halt operations entirely. Their employees can work remotely from home which makes it possible for the business to keep operating. However, this doesn’t mean that e-commerce stores are not influenced by COVID-19.
Since stepping out into the public is off-limits – unless for extremely important reasons – people are now instructed to stay indoors and practice social distancing until further notice. Consumers are avoiding marketplaces and increasingly shifting towards digital technology for buying even groceries and food. While online shopping may give profits initially, the supply chain issues and unavailability of goods could dampen the potential of e-commerce as days pass.
COVID-19 reveals regulatory gaps in Amazon’s marketplace
Counterfeit and fake products is an issue that customers encounter at a majority of e-commerce stores. However, given the current situation, the emphasis on strict regulation and protocols for online shopping is greater than ever. People are in desperate need of hand sanitizers, cleaning products, face masks, and other goods to protect them against coronavirus.
It was noted that over one million counterfeit or suspicious products with misleading claims were removed from the website in February alone. Amazon took the step to restrict sellers from capitalizing on the profit by banning them from using keywords like “coronavirus” or “COVID-19”. While the initiative was appreciated, it didn’t stop sellers for long, as they started placing false claims in the graphics for the products. In doing so, Amazon’s algorithm doesn’t detect the false claim. Furthermore, sellers are also profiting from the overall consumer panic by doubling the prices of cleaning products and other items. As of now, Amazon has banned over 3900 sellers for breaking the rules stated by the Amazon Marketplace Fair Pricing Policy and discards offers that endanger consumer trust.
This time is proving to be more challenging than ever for Amazon. There is an escalation in order volume, the gaps in marketplace regulations have been revealed, and their inventory is unstable. On top of that, they must also ensure that all their deliveries are made securely and don’t contribute to the spreading of the virus. These are all challenges triggered by the coronavirus pandemic.
The coronavirus boosts online sales for health products
Due to the pandemic, online sales have surged around 52% compared to last year’s time frame, as well as the volume of online buyers which is now 8.8% higher than last year. Items like masks, hand sanitizers, disinfectant wipes, gloves, and other cleaning products experienced a spike in sales over the course of February as the risk of the virus intensified. This has led several online retailers to sell out all their items and they’re now waiting to stock up on products to resume selling to online shoppers on their waitlists.
In March, the US experienced a huge rise in e-commerce sales for disposable gloves when compared to the stats of March 2019. In addition, bread machine sales also spiked up as the shortage of bread at bakeries and supermarkets has prompted people to panic buy machines to bake bread at home. Other frequently purchased items include flu and cough products, dishwashing materials, rice and grains, fitness training equipment, etc. However, the demand for some of these products will begin to drop in the coming weeks as the trend of bulk-buying and high-value purchases will decrease. This is because as more and more nations implement total lockdown, there will be a major impact on delivery services which could lead to delays or potentially no deliveries. Also, supply chains and factories have taken a significant hit as production has slowed down or halted completely to protect their staff and prevent the spread of the virus.
Certain other products as well
People are also buying video games, play station equipment, monitors, and other gaming equipment to increase their indoor entertainment options. Consumers also purchase other additional gear to set up their gaming rooms such as coaxial cables, extension cords, headgear, etc. and enhance their gaming experience. The abundance of free time has caused people to constantly search through online stores to find things like board games, art or painting material, jigsaw puzzles, gardening tools, etc.
Shipping Delays
Today’s consumers are thriving on instant and convenient shipping services, however, the increasing demands of online shopping and shipping delays have created an added pressure on the e-commerce giant, Amazon, to deliver to consumers as promised. This means that given the current crisis, online buyers are more likely to purchase the items they require regardless of the longer delivery time, as long as it avoids them from visiting a physical store. The main challenge for online retailers is the supply chain-related issues which have resulted in shipment delays, technical difficulties, and staff shortage.
At the moment, Amazon has suspended the shipping of non-essential items to its warehouse and is only accepting high-demand products. Their current shipment priorities are health and household products, baby products, pet-care supplies, grocery items, and beauty and personal care products. Amongst all this, one thing to keep in mind is that communication is the key to increase customer trust and confidence and at a time like this, retailers must ensure they retain positive impressions to the maximum.
Wrapping Up
The coronavirus situation is evolving rapidly and it’s hard to predict where we will stand in the upcoming months. Online retailers will have to navigate through the tough waters ahead but as long as they maintain a transparent online storefront, they’ll be able to preserve consumer confidence. The circumstances are unexpected and shifty which makes it complicated for e-commerce stores to cater to the growing demands of panicked consumers, but effective communication between the seller and customer can help overcome these hurdles.
