E-Commerce in the Time of Coronavirus: It’s Complicated?

As the world continues to grapple with the novel coronavirus and prepares for more months of stay-at-home orders bolstered by closed storefronts, some consumers have ramped up their online shopping habits. And as we’ve all transferred our social lives into a schedule of Zoom meetings, I’m sure, like myself, you may have heard family members or colleagues speculate that coronavirus will be good for e-commerce.

But will it be? Sure, I’ve thought, maybe for groceries – but what about other businesses?

It’s truly too early to tell. But at the end of March, Bloomberg examined the impact of coronavirus on some web retailers’ e-commerce businesses, and the picture isn’t optimistic right now – at least for those selling non-essential goods, like apparel: “Since the start of 2020, online sales growth for apparel has plunged to zero from a growth rate of about 30% the previous quarter, according to data from e-commerce software firm ChannelAdvisor. The steepest drop came at the beginning of March, the study shows.” Bloomberg spoke with Mike Shapaker, chief marketing officer at ChannelAdvisor, who postulated that consumers are likely shifting spending priorities amidst the uncertainty that comes with a pandemic and a stalling economy. 

In another Bloomberg article from the same week, it’s reported that most retailers haven’t seen a shift to online sales from brick and mortar stores during the pandemic:

And regardless of consumer behaviors or preferences, some retailers, like Victoria’s Secret, have shut down brick-and-mortar stores and online operations in an effort to slow spread of the disease.

The picture painted above doesn’t support a bright future for e-commerce, though Bloomberg also reports that some brands have been hit less hard than others; the initial article cites examples like Nike, whose online sales reflected relatively modest declines, and Adidas, who actually experienced a sharp increase as a result of “broad promotion.”

So what exactly does this mean for the future of e-commerce? Again, it’s too early to know. Looking to China may provide some insight into what to anticipate here in the U.S. in the coming months, though it may not provide more optimism for non-essential businesses: S&P Global Market Intelligence reports that, “As [China] shifted to what has been dubbed a stay-at-home economy, consumers ordered fewer restaurant takeouts and cooked more, bought more home cleaning and personal hygiene products, and ordered fewer fashion and discretionary items, according to an analysis of data released by the Chinese government and e-commerce companies.”

We’ll all have to stay tuned. And in the meantime, may we all stay healthy and safe so we can get this tragic pandemic under control.