The Orca Pacific Blog

Coronavirus Could Push eCommerce 10 Years Into the Future

John L. Ghiorso

Article by: John L. Ghiorso

How will Coronavirus (COVID-19) impact eCommerce? That’s the ultimate question right now for brands, manufacturers, and retailers around the world.

In the short term, we’re already seeing a massive shift online as shoppers stock up on consumables and emergency supplies. Coupang, South Korea’s largest eCommerce retailer, has seen sales spike by 30% since the coronavirus outbreak in February. Back in the US, we’re seeing the same panic-induced buying pushing the limits of Amazon’s signature offer of selection and convenience.

While this flash in the pan is problematic for some brands who are scrambling to fulfill demand with unreliable supply, the overall impact on eCommerce is somewhat expected. Amazon is responding by increasing inventory cover, and brands with newfound opportunity to fill holes in demand are doing so.

The question remains: will this shift sustain over the coming months and beyond?

I believe it will.

The Future of eCommerce After the Coronavirus

While the short-term spike in eCommerce sales is founded in fear, I believe it is ultimately implemented out of convenience. It’s undoubtably easier to use Amazon or Instacart than it is to load up cases of bulk products at Costco and wait in line for hours.

In the long term, though, increased social distancing will shift a much greater share of retail to eCommerce. Coronavirus is moving faster than most people think, and most major US cities will soon be forced to implement severe social distancing measures. That means no going to work, the gym, the mall, or local stores and restaurants. Certainly a lot of purchases will be put off entirely. That’s why most economists expect a major economic softening in the coming months. But those purchases that remain will massively shift online.

You would be right to point out that there will be some mix in the shift (less $3,000 watches, more toilet paper). But I ultimately believe that eCommerce will pick up more share than all of retail will lose due to the economic impact. 

I also believe that this shift will have permanence. What we have seen over and over is that once customers go to eCommerce, they rarely go back. I have never spoken to someone who went back to brick-and-mortar once shifting to Amazon, just like I have never spoken to someone who went back to taxis after using Uber. If this holds true, a decade’s worth of shifting in retail could happen in a matter of months. There could be a fundamental restructuring to the way that American consumers purchase products going forward.

What would this mean for brands and manufactures? Ultimately, those who are able to respond in the mid-term and long-term will be better suited than those who treat the coronavirus pandemic as a phase. Rather than just look for ways to be flexible, brands need to consider how they will respond to the eCommerce landscape of the future.

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