COVID-19 Concerns May Boost Ecommerce as Consumers Avoid Stores

The Coronavirus is quickly spreading across different countries and governments are taking extreme measures to stop it from spreading at a faster rate.  For example, Italy announced yesterday that they are closing all businesses except for pharmacies and supermarkets. Governments are recommending that people avoid large social settings and instead remain home, if possible. Schools have even been shut down and now our classes at Columbia will be hosted in a remote setting until the end of the semester.  I found an article on eMarketer that sheds light on the impact that the coronavirus will have on businesses. I have listed a chart below that shows internet users who have avoided crowded places to protect themselves against this virus. Research conducted by YouGov showed that “85% of internet users in China and 83% of those in Hong Kong have avoided crowded places in the last two weeks”. As the virus continues to spread, it is without a doubt that these numbers will continue to increase across the globe. At the time of the survey, it stated that 27% of US Internet Users have avoided crowded places, but I’m sure that today, that percentage will be a lot higher. 

Furthermore, a February 2020 Coresight Research survey showed that 27.5% of US Internet Users are avoiding public places. Shopping centers/malls are expected to be the most avoided places for obvious reasons, and more than half of the respondents said that they would avoid shops as well. The chart below breaks down the age group of internet users that would avoid going to shops/malls. It is no surprise that people ages 61+ would avoid shopping at malls/centers and shops since this virus would hit them the hardest. This may also break their habits of not shopping online. Because of the virus, they may adopt shopping on e-commerce platforms which will be interesting to see if that indeed does happen.

Ecommerce activity particularly related to health and grocery is booming in the US in general and especially moments such as this. It comes as no surprise that digital shoppers are waiting to “convert on products that they need with longer delivery times in order to avoid going to stores where inventory will most likely be limited.” This proves itself a supply chain challenge to online retailers like Amazon. "The click frenzy will bring in more paid search dollars, but as supply chain issues continue to increase, third party sellers are looking for ways to reduce their ad spending." The combination of these supply shocks and demand shocks due to the coronavirus means that the situation is more complex and fast moving. The most that we can do now is to remain positive and take precautions and we will see how this plays out in the upcoming days.