With quarantine measures adopted in a growing number of countries due to coronavirus outbreak, online shopping has seen a boost, especially for groceries and essentials. For example, online purchases with home delivery in France grew by +32% year-on-year in the first week of March, closely followed by click-and-collect orders with +29%. In Italy, Carrefour saw the number of online buyers double to 110,000 following the lockdown from March 9. While these figures point to an immediate online shopping boom, China’s example reveals that in the long run overall online sales could still be negatively affected by COVID-19 due to economic uncertainty and consumers’ reluctance to buy high-priced items, whether online or in-store. At the same time, the negative impact on E-Commerce in China has been less severe than on physical retail, leading to a growing share of E-Commerce in overall retail sales.
The increased number of online orders during the coronavirus outbreak is negatively affecting delivery times and creating challenges for E-Commerce logistics. In response, E-Commerce leaders in the U.S. are hiring thousands of additional workforce, while in Europe, Amazon plans to temporary stop accepting orders for non-essential items in Italy and France. The company also announced that it will limit new supply receipts in U.S. and European warehouses to vital products only, such as medical and household goods. Nevertheless, figures show that online shoppers should count on longer delivery times, with delays of up to one month for non-essential items.
A recent survey by E-Commerce Europe (conducted between March 17 and 19) among national E-Commerce associations, company members and business partners revealed that 100% of the respondents have already been affected by COVID-19. The main current effects include delivery delays (60%) and fewer orders (50%). Furthermore, 35% reported tension between online and offline retail. In terms of financial impact, 65% of companies and associations expect a decline in sales, a partial or complete shut-down of operations during quarantine and employee lay-offs.
Source: Ecommerce Europe
The top categories seeing an E-Commerce sales boom during COVID-19 lockdown in various countries is online grocery and consumer essentials. Information revealed by the top two online shopping platforms in China, Alibaba and JD.com Inc., shows that digital sales of these items increased manifold during the time of the quarantine, helping overall E-Commerce sales in the first two months of 2020 rise by +3%. In European countries which are on a lockdown as of March 2020, retailers are also seeing increased demand for online groceries. In markets, where E-Commerce does no yet have a high share in the food and FMCG sector, many consumers are making their first experience with buying groceries online. U.S. E-Commerce giant Amazon is reportedly increasing orders of essential items from suppliers, whiling limiting purchases of non-vital items.
In addition to groceries and essential household goods, other categories experiencing growth in online orders are stay-at-home products, such as home sports equipment and supplies for working from home, as well as e-pharmacies. Furthermore, categories with traditionally low online shopping penetration rates, such as car commerce, are experimenting with E-Commerce offerings. With U.S. car sales expected to fall by -20% in the near term, industry players are seeking for ways to cushion the negative impact by offering more digital services, including online ordering and payment, free delivery, and test-drive at home or office.
Selected retailers have temporarily shut down their E-Commerce operations. These include Marysia, HomeGoods, Reformation, The Frankie Shop, TJ Maxx, and Victoria’s Secret among others. The TJX Companies Inc. closed its stores in the USA, Australia and Europe, as well as online businesses tjmaxx.com, marshalls.com and sierra.com for a period of 2 weeks. Other retailers, such as Apple closed down physical stores but continue to fulfill online orders. Overall, out of 62 North American retailers which are ranked in the top 100 by online sales and operate both online and store-based shops, 71% closed their physical stores as of March 23, up from 50% on March 18.
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