How Coronavirus Is Affecting Online Retailers

March 26, 2020

How Coronavirus Is Affecting Online Retailers

On March 11, 2020, the World Health Organization (WHO) officially declared the COVID-19 outbreak a global pandemic. As this ultra-contagious virus continues to spread throughout a growing number of countries, business-owners worldwide question just how significantly the coronavirus is affecting online retailers.

While many sellers are recording additional online sales due to local quarantine restrictions, the same merchants are also reducing their sales forecasts for the remainder of the year. In fact, a survey conducted by Digital Commerce 360 shows that 47% of retailers expect some downside in revenue due to the coronavirus pandemic. The extent of this predicted downside, however, is still unsure.

A key to understanding these predictions and what they mean for your online store, results from a deeper study of the eCommerce process, combined with current consumer demands and trends.

Increased Health & Cleaning Product Sales

Unsurprisingly, health and cleaning purchases have tremendously increased online since the outbreak of the coronavirus. According to one website platform provider, online sales have grown 52% in comparison to this same time period last year.

In fact, sales in these categories continue to rise week by week, as the virus persistently spreads. For example, during the last week of February, the online sales of vitamins increased by 78% over the week prior. Additionally, the online sales of disinfecting wipes increased by 184% during the same time period. Hand sanitizer became almost impossible to acquire, with online sales increasing 420% over the third week of February. And, most significantly, online sales of masks increased by 590% in those same seven days.

Debrief Me, an established online mask retailer, can attest to this urgent influx in demand. The company has seen a 1000% sales increase in its pollution-and-pathogen-blocking face masks since the outbreak of the coronavirus. These masks, marketed on Amazon, are currently sold out and will be restocked on a first-come-first-served waitlist basis. Furthermore, on the initial launch day of the Debrief Me mask waitlist, over 800 eager patrons signed on. This exponential business demand has created company plans for expanding their market and selling the masks in various new, big-name retail stores.

However, the question remains: how is the coronavirus affecting non-health related online retailers?

Increased Online Essentials Sales

Considering the lock-down and quarantine regulations instituted by many legislations worldwide, hoards of patrons have begun turning to their favorite retailers' online platforms. This way, shoppers can continue to make every-day purchases, without leaving their homes. For example, Target has met a demand to increase its staff in order to facilitate the influx of omnichannel purchases, like the Curbside Pick-up Program.

Another company recording an increase in sales is the online wine vendor, Wine Insiders. The CEO, Zac Brandenberg, explains how the company is experiencing order demand similar to that of Black Friday and Cyber Monday. In fact, out of the top four sales days of the past year, two of those dates fell at the beginning of March 2020.

Other online household goods retailers, like Boxed Wholesale, have also seen a "recent surge in orders." Because of the high demand, many sellers have instituted purchase limits on common items. This way, store owners ensure the accessibility of these items to as many needy customers as possible. Even Meijer, employing personal-shoppers to fulfill online orders, is "experiencing [a] high volume" of requests due to the coronavirus.

Essentially, despite a world-wide pandemic, consumers still need to purchase their every-day products. The technology that allows shoppers to acquire goods without leaving their home seems like a sufficient solution. However, is this boom in online shopping really going to solve the social-distancing need, or is it lacking in feasible execution?

Increased Production & Fulfillment Delays

Though some online retailers are adequately keeping up with customer demand, increased requests for a product can take its toll on now-understaffed companies. Moreover, if these companies have employees taking leave or experience government-mandated shut-downs, the supply issue only intensifies.

Jonathan Gold, NRF VP explains, "As factories in China continue to come back online, products are now flowing again. But there are still issues affecting cargo movement, including the availability of truck drivers to move cargo to Chinese ports." This point doesn't even touch on factories here in the United States, who may just be broaching the conversation of a company-wide shut-down. Also important to keep in mind are the delivery workers themselves, who may deal with symptoms of the coronavirus and need to stay home, reducing the number of able-bodied workers even more.

Further, heightened demand comes not only at the cost of supply. For eCommerce purchasing to function properly, there is a third factor involved: fulfillment. Kirsten Newbold-Knipp, Chief Growth Officer for Convey says, “over the past three weeks, we’ve seen an increase in fulfillment time of almost 40%." This means that the average online purchase is taking more time than usual to complete. Entrepreneurs can chalk it up to the increase in orders, and a decrease in available workers. Either way, consumers are receiving their purchases later than expected.

Increased Retailer Uncertainty

Combining factors such as increased online orders, limited goods production, and fewer fulfillment workers, serve to complicate the question of how the coronavirus is affecting online retailers. Of businesses surveyed this month, only 26% expect their sales to remain stable. However, much is still unknown.

Urban Outfitters Inc. is ranked number 45 on the 2019 Digital Commerce 360 Top 1,000. As a retailer primarily selling clothing, accessories, and home goods, the future months dealing with the coronavirus are uncertain. Regarding the company's projected sales, their CEO aptly states, "COVID-19 creates supply chain uncertainty and could create demand uncertainty as well." While the online ordering of everyday essentials has increased for some retailers, will the non-essentials follow suit?

In these uncertain times, no doubt retail foot-traffic is hitting a sharp decline and, in some places, approaching a screeching halt. However, the coronavirus is affecting online retailers differently. As 57% of consumers are altering their day-to-day lives to become as socially-distant as possible, it seems as if the near-future impact of online retail is fluctuating and unpredictable.

Erik Nordstrom, of his namesake clothing retailer, has this to say on the matter: "We are communicating with our vendors and brand partners... we’re looking at this on a case-by-case basis and planning accordingly.” Sound advice from a well-established entrepreneur.

Despite the physical impact of this pandemic, proactive, above-adequate customer service is one aspect of your business that the coronavirus should not affect. Tom Buiocchi, CEO of SaaS facilities management platform, ServiceChannel, advises, “One way [to mitigate customer fear] is by ensuring consumers that [the company is] taking health and safety seriously.”


Even as an eCommerce retailer, do whatever is in your power to show your customers that you care. Assure them that, throughout this tough time, you are with them - even if it is just virtually.






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