Most people are avoiding crowded spaces. Major cities in developed countries are locked down. At first sight, this situation may be considered as an opportunity for online businesses. However, the scenery is far more complex than it looks.
Controlling the Demand
We all love buying stuff online, but we still do most of our shopping from brick and mortar stores. Buying a new pair of sneakers from Amazon is not an idea we reject, but the idea of buying toilet paper online is a little awkward for most of us.
Some people started to make their grocery shopping online and most of the supermarket chains already have strategies to shift their business from the physical stores to virtual ones. But this shift normally had to take some time since consumer behavior doesn’t change overnight.
However, in the case of Coronavirus, the consumer behavior changed overnight. Most of the people who are scared to be in crowded public places rushed to online stores. But online stores couldn’t deal with this extreme rise in the demand (in some cases up to 80% in a few days), causing delays in deliveries.
Online businesses suffering from late delivery issues will have to find out solutions to create better distribution channels in the short term. But in the long term, a new problem will arise: Supply chains.
The Supply Chain Problem
China is the country that suffered most from Coronavirus. The country is in a “survival mode” and focusing only on controlling the disease and recovering from its devastating effects.
There is no need to emphasize the strategic role of China in e-commerce. As the production capacity of the country is declining rapidly these days, there will be a huge gap when online retailers run out of stock of Chinese products.
Another problem is logistics. Strict preventive measures taken by several countries and territories (like EU) including closing borders will be a major issue for e-retailers for supplying goods from producers.
Logistics industry is playing a key part in e-commerce and we saw that they are not prepared to a major crisis like e-retailers. Probably in the next weeks even months, deliveries will be delayed, and consumers will be angrier than ever. How will logistics companies will deal with the problem? This is something to be observed in the process ahead.
It’s the Time to Do the Right Thing
Some of the online retailers considered Coronavirus as an opportunity. A seller on Amazon tried to sell a set of two bottles of hand sanitizers for $100. But Coronavirus is not an opportunity to make a profit.
Online businesses (especially large ones) must assume responsibility and do their best to help society. Luckily, most of the airline companies allowed their customers to change dates and change their tickets toopen ones. To meet the increasing demand, some of the cosmetic companies shifted their productions from perfumes to sanitary products.
In these extreme days, supporting the society is more important than ever for brands because people won’t forget what the brands did in these days of crisis.