E-commerce after the corona crisis; a lasting change
Over the course of a few months, the Corona crisis has changed the way we live, work and spend money. In recent months, consumers' trade patterns have changed drastically. While the physical stores have been closed or affected by sales failure, most serious and well-established online stores have done very well. The grocery and construction industries in particular have seen a huge upswing in the nordic markets. But also in other industries such as the interior-, books-, shoe and clothing industries, our customers experience a significant increase in sales.
Turnover in e-commerce in the Nordic countries has been steadily increasing in recent years. The corona crisis has probably only accelerated a growth that would have come anyway. One thing that often follow a crisis like this, is a rapid change of society. The e-commerce explosion is a good example of this.
We have reviewed the figures from 5 of our well-established online stores in 5 different industries to look at the trends through the corona crisis. In terms of sales, all the stores have had a formidable increase. On average, the increase has been 50% in the period from the 15th of february to the 21st of april when comparing 2020 to 2019.
So how can we assume that this change will be permanent and that not all sales will go back to the physical stores after the crisis is over?
- Several larger surveys (such as DIBS's annual e-commerce survey) show that as sales increase, new and larger groups of people are becoming aware of the benefits of ecommerce. A large and important part of the annual increase in turnover is that a larger part of the population adopts e-commerce in everyday life.
We have reviewed the figures from the same 5 stores to look at the trend of new users registering av customers during the Corona crisis:
The result shows a formidable increase in the number of newly registered customers from 2019 to 2020 in the same time period. In fact, the increase is over 300%. Not only do the existing users shop more online during the period, but new customers are now flowing to the online stores. If these stores manage to give these new customers a good trading experience, there is reason to believe that a large proportion of these will become regular customers even after the corona crisis is over.
A switch to digital commerce and a unified shopping experience across channels and platforms is imperative in the time to come. Focusing on e-commerce has never been more important than now.
Where should you start if you have a physical store and are one of those who has not yet established an online store?
Don't panic and make hasty decisions. Many are now settling on simple solutions that are virtually "free", in order to be able to start selling online as quickly as possible. Remember, however, that having an item and a payment solution online does not mean your're going to sell your products. It is also such that nothing is free. All the time you spend on learning platforms, integrating systems and entering all product data also represents a significant cost for your business. It is important that the choices you make now are something that you can build on in the years to come.
Ecommerce is complex and customers' demands for product information, editorial information and shopping experience are very high, compared to the situation just a few years ago.
We therefore think it's a good time to take a deep breath and set up a digital strategy before you get started. It will determine what kind of solution you should go for, what product range you should prioritize, how to work and what channels to promote in.
Start by asking yourself the following questions:
- What shopping experience and product range do I want to offer my customers online? How should the online store work together with your physical store?
- Who are my competitors and what do they offer online? How can I distinguish myself from these with the same goods, without competing on price alone?
- Where and how will my customers find me online? And how do I ensure that I take best care of the visits I receive?
- How much time and resources do I have available to work on this? What can I do for myself and what services do I need to buy from others?
- What features does my technical solution have to offer and what do I need to tailor to differentiate myself from my competitors?
- How do I keep track of logistics and customer communications when I get more sales channels than I'm used to?
- How do I make sure the online store is profitable? What do I earn from my goods after marketing, payment solutions fees, etc. have been paid?
What does all this mean for those of you who have been running an online store for a while?
This is both a great opportunity and a potential challenge. On one side, the total net sales in the future will increase and your potential increases accordingly. At the same time, competition is naturally intensified as well.
- You've probably got more competitors in the last few months who have many of the same products at the same prices as you. There are probably also more people competing for the same keywords and coming up with similar messages.
- This means that you have to work on making the shopping experience better, separate yourself from the rest with better / more editorial content and become even better at digital marketing!
We would love to hear from you!
Get in touch if you are thinking of either establishing an online store or improving your existing concept. Chances are that one of our consultants has worked on the same or similar problem as you are facing right now. That means there is also a chance that we can assist you with a faster, more efficient and more profitable solution. Please contact us for an informal chat!
Phone: +47 920 28 082