A New Era For E-Commerce
E-commerce is a common language for the average American consumer. Although the use of digital platforms to buy online has been a growing market, many people opted for in store purchases. Nonetheless, we have faced a situation in which the way we buy has indefinitely been impacted: COVID-19. The pandemic changed the perspective and shopping trends of the average American consumer, giving way to a new era for companies. Being that many businesses were not ready for the world of e-commerce, the pandemic created a domino effect on the actions companies needed to take to stay on top, and remain competitive in a new market. Therefore, companies should emphasize their research and market strategies to meet the demand and surpass customer expectations to maintain the growth of their e-commerce market.
During my research, I came across the article "The Domino Effect: 5 Ways Coronavirus Will Forever Change Retail," by Chris Walton for Forbes. Being that Mr. Walton wrote this article early on in the pandemic, I have found his predictions to be on point and far-seeing. Mr. Walton's professional background gave him enough experience to predict the future of e-commerce, post-pandemic, for he is a leading expert and influencer in omnichannel retailing. The five predictions made were: Direct-to-consumer grocery will accelerate, payments will become contactless, checkout-free retail will become the preferred norm, the "S" in BOPIS (buy online, pickup in store) will take on a new meaning and automation will take people out of harm's way ("5 Ways"). We have witnessed the explosion of e-grocery sales, from having to schedule a pick-up date up to 4 days in advanced to ordering food from the unusual places like Amazon and Target. Although we might have been forcefully pushed into using apps to get our groceries, the commodity it has brought to the American household is unprecedented, changing our mentalities and newfound love towards others completing our shopping lists. It is a given that once restrictions are lifted, we will want to flood the stores, nonetheless, once we start going back to "normal", and our daily schedules are packed with duties, we will go back to relying on the power of the app. We can see this in data collected by Mercatus, who reported that online grocery sales dropped 20% percent from July ("Online Sales Stabilize" par. 3). During this time, regulations have been relaxed and people started going out again, yet they also report that 75% of customers are extremely likely to continue using online services compared to June's 57% ("Online Sales Stabilize" par. 3). Walton's second prediction was the growth of contactless payments. Certainly, we are still living through a coin shortage due to the pause in use of physical money, yet the use of contactless payments has been extremely convenient, especially during the pandemic. Furthermore, the use of contactless payments is also an easier way to track expenses for consumers. In addition, Walton expresses that check-out free retail will become the new norm. Although Check-out free retail can be seen a bit futuristic, Amazon had 20 successful Amazon Go stores throughout the U.S., the pandemic only helping the retailer expand at a faster pace ("5 Ways"). Other stores such as Sam's Club and parent company Walmart had systems such as scan and go prior to the pandemic, nonetheless, this option has become increasingly popular to avoid human interaction. Walton also predicted that the "S" in BOPIS (buy online, pickup in store) would take on a new meaning, and it certainly has. Every store and restaurant that has stepped up their e-commerce game has a "curb-side" pickup designated spot for customers. This new meaning is due to the fact that many retailers, stores and restaurants are converting their spaces into warehouses, where everything is "to-go". Coffee giant, Starbucks, converted all coffee shops "to-go" only during the pandemic, and as we witnessed throughout this time, almost every shop, restaurant and retailer followed the same footsteps. Walton's last prediction was that automation would take over the industry, being that with it, people would be out of harm's way. Early in the pandemic we saw how retailer's warehouses such as Amazon, had to be shut down due to the spread of the virus in their warehouses. A fully automated system led by artificial intelligence and robotics would prevent these types of exposures.
The biggest challenges businesses faced, prior to the pandemic, to expand their e-commerce market was creating easy to use digital platforms and changing the behavior of its consumers. In the article written by Phil Wahba featured on Fortune magazine titled "The Retailers That Are Smartest About Shopping Tech Will Finish On Top After The Coronavirus.," Mr. Wahba shared that although businesses have been hit hard and some forced to shut down, those who made quick moves towards e-commerce will surely come out victorious. A great example of businesses that made quick moves was Walmart, one of the U.S.'s biggest retailers, who reported that in just one month after the pandemic, there was a 190% increase in monthly downloads of its online grocery app. Although changing consumer behavior was a major challenge, the pandemic has helped put this change on a fast-track. McKinsey & Company reports from data gathered, that 77% of consumers that have adopted a new shopping behavior, will remain loyal ("Survey" slide 15). PYMNTS reported that in July, more people were buying online than during the height of the pandemic in mid-April, showing a new trend in the behavior of consumers ("More Customers" par 2).
The current state of pandemic has eminently forced companies to direct their attention to the undervalued e-commerce market. The majority of companies were not prepared to face the demand and logistics of a digital world. One of the major changes made from online ordering was providing curbside pick-up to customers. I conducted some local observatory research and found that 8 out of 10 restaurants and 7 out of 10 retailers offer curbside pickup, including small mom and pop shops; 6 out of the 8 restaurants and 5 out of the 7 retailers did not offer curbside pick-up prior to the pandemic. Some companies had a step ahead of the game, for they were already investing in the development of growth of their e-commerce market prior to the pandemic. Companies such as Amazon, Lowes and Target, had research teams, dedicated to e-commerce and the future of commerce. Amazon developed the futuristic store of Amazon Go, which eliminated the normal process of checking out. Other companies were using digital platforms prior to the pandemic, such as Doordash, UberEats or Instacart. Prior to the pandemic, restaurants had the opportunity to be part of such digital platforms, but some found it obsolete. Small mom and pop shops were the most affected, nonetheless, offering their products through such digital platforms sustained their businesses during this time. From online ordering to delivery or online ordering to curbside pick-up, e-commerce has been the key to keep businesses open, regardless of size.
Although consumers were adamant about e-commerce, they have found out the multiple benefits e-commerce brings to their lives. I conducted a series of questions in social media in which 200 people participated, and out of that information I came up with the following results. Consumers' number one reason for ordering online is availability of items. Being that during this time we have really understood the meaning of "out of stock", consumers turn to e-commerce for the benefit of knowing when they will get their order and being able to track it. Of course, the main reason was not having to go from store to store looking for something. Another benefit consumers found in e-commerce is time saving. The average American has a busy daily schedule, once we go back to "normal" e-commerce would be the best option to save time. In addition, consumers consider e-commerce to be a commodity. Not having to leave home or not having to get off at businesses by doing curbside pick-up is one of the greatest perks of e-commerce.
Even though consumers have found e-commerce beneficial, they expect more. A major concern with online ordering amongst consumers was the quality of products. I used to have the mentality that if I cannot see it, touch it, smell it, I was not going to buy it. When shopping for clothing I would try everything out before taking it to the register, check how thick the material was and what type of material was it. When shopping for food, I would pick out the firmest tomatoes, ripest avocados, the most fragrant pineapples and the best-looking pieces of meat. The fact is that as e-commerce consumers, we expect to get the best quality products, as if we were actually picking them out. Although many businesses have made major changes to their e-commerce techniques, consumers expect more changes to be done. A main concern amongst the data gathered from my survey was how secure digital platforms were to input personal information. We live in a day and age in which data gets stolen left and right. To avoid digital frauds and scams, companies are working the use of digital wallets that are increasing their security measures. In addition, consumers want a faster delivery or faster pick-up times. To meet such demands, companies such as Sam's Club, have transformed their retail spaces into warehouses, to reduce the time of deliveries. Instead of an item being delivered from a warehouse hub across the country, companies are creating local warehouses for a speedy delivery.
In conclusion, e-commerce has benefitted from the pandemic situation to grow as a market. Businesses that made an effort to become part of the e-commerce world benefitted the most, for the changes they made will continuously bring back loyal consumers. As Americans, and as humans as a whole, we get used to commodities quite quickly, therefore, the use of digital applications to shop will continue to be on the rise. Nonetheless, companies will need to stay atop of the digital innovations to better serve consumers, to reach and sustain superb customer experience.