COVID-19: A wake up call for eCommerce and retailers

COVID 19

It’s hard to believe that just two short weeks ago, Americans couldn’t conceive of the catastrophe that was coming. To many, talk of COVID-19 (aka the coronavirus) was little more than media hype about a disease that was impacting people far, far away from home.

 

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Fast forward a little bit, and the entire State of California — and its 40 million residents — is in mandatory lockdown. Other states and major metropolitan areas are rumored to be close behind. Most places have, at the very least, warned residents to avoid contact with others.

For many U.S. businesses, this is a catastrophe of unprecedented proportions. Restaurants, bars, retail shops, and just about every other type of business you can imagine, have been shuttered. As local businesses closed their doors, many thought the mega online retail marketplace — Amazon.com — would be our saving grace. After all, the company promises to deliver just about anything to your front door in 24 hours or less — a service that seemed more valuable than ever in an era where Americans risk viral exposure in nearly every public gathering space.

Yet, in a move that shocked the nation, Amazon announced that it would be limiting “Fulfillment by Amazon” (FBA) orders as it dealt with positive COVID-19 test results from within its own warehouses. Given that two-thirds of Americans reported shopping on Amazon even before the outbreak, the thought of losing this resource that suddenly went from “convenient” to “necessary” seemed unthinkable. But maybe, just maybe, this whole situation is a blessing in disguise.

Possible Lessons From COVID-19

#1: There’s Value In Cocooning Families

In fairness, I didn’t come up with this term. It was originally coined in 1981 by futurist Faith Popcorn. It refers to the act of sheltering in one’s own home as a way to avoid the harsh realities of the world. Of course, today, it is directly applicable to the way American families are being forced to stay in their homes in an effort to avoid exposure to COVID-19.

Perhaps for the first time in decades, American families are eating meals together. Not only that, they’re also helping each other with daily tasks and planning online shopping sprees together. All this togetherness may lead American consumers to be more thoughtful and deliberate with their purchases — and maybe a little less wasteful than they’ve been in the era of being able to order any product any time right from the phone in the palm of their hand. This could be a much-needed reset button for a society recently obsessed with unchecked consumerism.

#2: There’s Value In Cocooning Employees

One of the great blessings in the timing of this pandemic is that many modern Americans have the technology and equipment within their own homes that allow them to efficiently work without ever leaving the house. Not only do most employees enjoy this convenience, the reduced number of cars on the highway are having immediate positive effects on air quality in many regions.

For their part, employers are learning to appreciate this fundamental shift in the way employees are handling the work-from-home mandates. Indeed, if the lockdowns continue, employers may be forced to accept (and possibly enjoy) this new normal. For one thing, allowing employees to work remotely decreases overhead — fewer office workers mean fewer square feet to pay for. Moreover, some studies have shown that employees who work from home are happier and more productive than their in-office counterparts. Nonetheless, employers have been hesitant to allow the practice on a grand scale until now.

#3: More eCommerce Retailers May Emerge In Food And Grocery

If COVID-19 has shown us anything, it’s that even the mega-retailers are not immune from the economic woes of a pandemic. This is especially true when it comes to the sale and delivery of food, groceries, and other perishables. With Amazon’s delivery capabilities currently called into question, other retailers — small and large — have the opportunity to brand themselves as the next go-to establishment for these items.

Even before the COVID-19 situation, industry experts were already predicting that American consumers would make a wholesale switch to buying groceries online. This will become increasingly important now that researchers believe delivery is the safest way for consumers to get food items during an outbreak.

#4: Weak Supply Chains Need To Be Strengthened

Almost as soon as authorities in the U.S. started taking the coronavirus seriously, nearly three-quarters of companies were already reporting supply-chain disruptions. While this is terrible news in the short term, the situation exposes an inherent weakness in the chain that will need to be fixed in the coming months and years. This opens vast opportunities for logistics experts, technology companies, brand protection companies and shippers to bolster a system that has languished, unchanged, for far too long.

And, while Amazon’s same-to-next-day shipping model seemed to be revolutionary, even it proved to be susceptible to the crushing weight of widespread illness. Thus, plenty of opportunity remains for designing shipping systems that are impervious to these forces.

#5: Retailers Must Improve Their Game

If COVID-19 has taught retailers anything, it’s that many retailers should take this as an early warning sign as to what eCommerce might look like in 2023. With shortage of products, damage to supply chains, Amazon kicking 3P sellers to the curb this would be a great time for a serious evaluation of the direction of their eCommerce strategies.

As an example, in some product categories (like hand sanitizer), online retailers saw a nearly 650% increase in sales in response to the pandemic. Sadly, however, existing venues frequently proved ill-prepared to handle the onslaught of sales.

Only time will tell how what sea changes may occur due to consumers being ordered to stay at home, work from home, purchase from home and even use tele-medicine from home, and more importantly, how long it might be until they feel safe returning to public marketplaces. And, of course, there’s no guarantee that COVID-19 will be the last global pandemic of this era. Consequently, retailers across the board have the opportunity to build eCommerce storefronts that will meet the needs of a changing world for the foreseeable future.

#6: Revolutionaries Will Win The Day

Undoubtedly, this is a moment in time that will change everything. Even though Americans are at the very beginning of this pandemic response, it is certain to have lasting impacts on the psyches and shopping habits of all Americans.

Now is the time for revolutionary thinkers and entrepreneurs to change the course of business and, in the process, maybe change the course of history. This is a unique moment when Amazon’s seemingly endless stronghold on American retail might be questioned and American businesses reconsider business as usual. Problem solvers who can figure out the new best way to get products in the hands of consumers — even in the face of a pandemic like COVID-19 — will win the day.

A half a month has revealed weaknesses in our eCommerce systems that would have normally taken five years to unearth. This is a rare opportunity for innovators to thrive. Who will be the new household names and services on the horizon?

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