Online Orders for Groceries and Other Essential Survival Goods Spike Amid COVID-19
As citizens are requested or in some cases ordered to stay at home in localities around the world because of the coronavirus pandemic, they turn to online shopping to stock their pantries. In some European nations that had early lockdown orders, the number of E-Commerce orders were a mid-high double-digit increase compared to similar period a year ago. For example, Carrefour saw the number of online buyers in Italy double after the lockdown. However, China’s example shows that even as the number of orders increases, total online sales transaction value growth falls as purchase of higher price items and travel arrangements are put on hold. The consequences of COVID-19 in China has had a much larger impact on brick-and-mortar store sales than on E-Commerce, resulting in an increase in online shopping’s share or total retail sales.
Delivery Delays for E-Commerce Orders Due to COVID-19
The sudden crush of online orders due to the spread of the coronavirus illness has impacted the logistics system. E-Commerce companies in the USA have begun to hire additional warehouse workers and delivery drivers. Amazon has announced that it will re-supply its U.S. and European warehouses with essential products only, such as medical supplies and consumable household goods. Because of the priority given to food and essential purchases during the COVID-19 crisis, even Amazon Prime members are finding delays of up to a month for delivery of non-essential items.
Global Effects of the Coronavirus
A recent survey of E-Commerce merchant associations in Europe revealed that all respondents have been affected by the COVID-19 pandemic. While many online sellers were seeing a surge in the number of online orders, the overall expectation is that deliveries will be delayed, total sales value will decrease leading to layoffs. Several merchants of clothing or household furnishings and decoration in the U.S. have temporarily closed down both online and in-store operations altogether. The area of online commerce seeing huge increases in sales volume worldwide is groceries and consumer essentials. The top E-Commerce merchants in China reported a manifold increase in these items during the first two months of this year, leading to a slight increase in overall sales value, down from double-digit growth rates previously. Many consumers in the USA and Europe are having the first online shopping experience buying groceries or pharmacy items.
Online Payment Volume Increases Due to Coronavirus
As consumers confined to their homes because of COVID-19 turn to online channels for their necessities, the number of digital payment transactions has rapidly increased, creating challenges for both merchants and payment processors. A fear of picking up the coronavirus by touching cash has motivated many consumers to use alternative payment methods in store. At the same time, even though the number of transactions has spiked, some experts project that the total online payment revenue value for the year will decrease, as higher priced physical items and travel arrangements are not being purchased.
For more information on the “Impact of COVID-19 on Global B2C E-Commerce & Online Payments”, see our April 2020 report here.