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Covid’s Impact on Online Shopping: How Ecommerce Brands Can Survive 2021

Brandee Johnson

COVID's impact on online shopping

Over the last year or so, the world of online shopping has been shaken. As lockdowns, quarantines, and social distancing measures spread across the globe, the already expanding ecommerce landscape began to boom at unprecedented levels, with the whole world dependent on it for the barest essentials. 

Now, even as the COVID-19 pandemic begins to level off, the effect it’s had on ecommerce can be seen in new consumer habits, as well as in the race for a place at the top of the search engines. 2021 has changed the ecomm game for good, and if you want your business to survive its new rules, you might need to make a few changes. 


How COVID-19 Affected Ecommerce in 2020

At the beginning of the pandemic, there was a never-before-seen surge in online shopping as brick and mortar businesses shut and everyone was ordered to isolate in their homes. In the US alone, this resulted in the rate of ecommerce penetration in 2020 growing by a mind-blowing 10 years in a 90-day period. 

Globally, ecommerce totalled $4 trillion in 2020, which equates to more than 17% of all retail sales. Businesses all over the world benefited from this boom:

It wasn’t just the online sales of inessentials, like audio books, that boomed in 2020. Consumers came to rely on ecommerce for home essentials they would usually buy in-store, such as food and groceries. In fact, last year, the online sales of these types of retailers grew by 100% year-on-year, with 17% of shoppers making their first ever online food shop.

But the pandemic wasn’t good for every business. For those who were unable to adapt to this radical digital transformation, a lot of sales were lost, with over 340 companies in the US declaring bankruptcy in 2020 as a result of the pandemic. For one industry, this scare catalyzed a major change in operations.

In 2020, the luxury segment faced its sharpest decline ever, contracting by an unprecedented 23% and seeing a decline of 60% in operating profits. With the industry facing collapse, luxury brands were forced to adapt to the new way of luxury buying: online shopping. 

Since this shift, the online sales of luxury goods has almost doubled its share of the market from 12% in 2019 to 23% in 2020. With full recovery in sight by 2022, this success story shows how adapting to the new era of ecommerce can help bring hard-hit businesses back on track following the pandemic. Here’s how you can weather the storm. 


How Ecommerce Brands Can Survive 2021

The biggest effect that the pandemic had on ecommerce in 2020 is changing consumer behaviors, habits, and expectations. Superior digital experiences and speedy order fulfilment are no longer unique selling points for ecommerce brands: they’re the baseline.

This has made it harder than ever for businesses to differentiate themselves from competitors, so if you can’t adapt to the new rules of the jungle, you’re likely to drown in the SERPs (search engine ranking pages). The good news is that there are several ecommerce trends you can use to guide you through the fray.

Ecommerce Trends Post-Pandemic & How YOU Can Use Them

1. Optimizing the customer journey amid higher competition

With the world of ecommerce now dominated by retail giants and established wholesalers, customer acquisition costs (CAC) have reached new heights. What’s more, with every ecommerce business prioritizing their online presence, it will take more than an ad campaign and a snappy catchphrase to help you stand out from your competitors. 

Instead, ecom businesses should be focusing on how they can optimize the customer journey from start to finish. Not only does this mean making your website as responsive and user-friendly as possible, it also means changing the way you market your business altogether.

Rather than marketing your product on a select number of channels, you should now be moving towards an omnichannel strategy, which focuses on the needs of the customer rather than what’s best for your product. Omnichannel retail is vital for ecommerce in 2021 because it prioritizes customer convenience: consumers will have the same experience of your online store no matter what platform or device they’re using, giving you the potential to reach more people while keeping consumer convenience a top priority.

When devising your omnichannel strategy, one thing not to overlook is the potential of mobile apps. Increased mobile activity during the pandemic (+30% from 2019) has put global consumer mobile spending on-track to reach $270 billion by 2025. With mobiles continuing to dominate all other devices, there’s no excuse for your brand not to be incorporating them into its marketing strategy.

2. New consumer expectations and how to exceed them

The pandemic not only changed what consumers bought online, such as home essentials, it also changed how they bought online. In particular, there has been an even greater increase in the desire for convenience and instant gratification, which have become expectations that necessitate things like quick order fulfilment and an omnichannel presence.

Consumers now also expect ecommerce businesses to be transparent about how they work, with sustainable shopping driving many conversations about who to buy from. For example, statistics from 2020 show that 34% of consumers chose brands that demonstrated ethical values, and 43% chose brands who had environmentally sustainable practices. Put simply, if you want to stand out from competitors in 2021, you need to make your audience like you, not just your product.

Here are a few ways you can exceed new consumer expectations this year:  

  • Build a purpose-driven brand: 40% of consumers are now purpose-driven, meaning they want to buy products that align with their beliefs and morals. This means your brand development in 2021 should be geared towards demonstrating your values, like offering eco-friendly packaging or supporting charities. 

3. Less focus on customer acquisition and more on customer retention

Increased competition and new consumer expectations have made customer acquisition much harder and more expensive in 2021, with digital ad spend having increased by 13% in the second half of 2020.

A greater desire for privacy has also made acquiring new customers an uphill battle. One third of consumers now consider digital ads to be too intrusive, and, with the surge of online activity that the pandemic facilitated, more people want control over the use of their data. So many people, in fact, that Google has begun phasing out the use of third party cookies. The bottom line is that it’s harder than ever to target consumers with ads, and even if you manage to, the likelihood of them responding to ads is minimized.

Rather than breaking your budget with the costs it takes to acquire new customers in 2021, you might want to start focusing more on customer retention. In general, companies who invested in better customer experiences, from omnichannel marketing to automated fulfillment, fared the pandemic more successfully than those who didn’t. We can expect to see the same pattern in 2021, so start thinking about ways to optimize your customer’s journey and experience if you haven’t done so already.


Will Ecommerce Ever Be the Same?

The short answer is no. The COVID-19 pandemic changed ecommerce in ways that wouldn’t have been thought possible before 2020, transforming it from a convenience into a necessity. The months of on-and-off lockdowns, forcing people to shop online, have set a new precedent, where online shopping is the default retail experience.

Similarly, the psychological impact of staying safe and cautious means that this precedent is unlikely to change any time soon. So, if you’re patiently waiting for things to go back to normal, you’ll be waiting for a long, long time. But, by paying heed to 2021’s ecommerce trends, and adapting your business to the new ways of the online world, you’ll be able to pull through the year and benefit from the huge potential that ecommerce has in the not-too-distant future.

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