At a time when countries are going into lockdown due to the COVID-19 outbreak, it is normal to be concerned about the health of our loved ones. In fact, the governments of different countries are asking their citizens to stay at home to stop further spreading of the virus. Needless to say, the state of the pandemic has affected retail businesses all over the globe.

While the retail stores are expecting rough days ahead, the online retail industry is witnessing a unique problem. There’s a significant surge in the number of online orders as people are going quarantine.

But the pandemic has also affected the manufacturing industry, resulting in a significant shortage of supply. Things are worse for the online retailer who manufacture and supply their goods from China.

COVID-19 Outbreak and Online Retail

In December 2019, pneumonia of unknown cause was detected in Wuhan, China. On 30 January 2020, the outbreak was declared a Public Health Emergency of International Concern. This new coronavirus disease was named COVID-19 on 11 February 2020 by the World Health Organisation. As per the latest reports, there have been more than 1000 deaths worldwide due to coronavirus.

Over 80,000 cases of COVID-19 have been registered in China, which is the largest manufacturing market in the world. Quite obviously, the coronavirus outbreak has caused factory shutdowns and travel restrictions in the country, causing a massive gap in the supply chain system.

Now that the number of COVID-19 cases is rising worldwide, countries are asking their citizen to maintain social distancing for the time being. As more and more people are isolating themselves, they are stockpiling the essential items and health products as much as they can, which is further contributing to insufficient stocks for retailers.

While the brick and mortar retail stores are witnessing a steady decline in sales due to countrywide shutdowns, the online retailers are witnessing a significant surge in the sales of products.

The Current Scenario of the Online Retail Industry

According to a survey of 304 retailers in March 2020, 47 percent of retailers expect some negative impact on the revenue due to the COVID-19 outbreak. 58 percent of those retailers agree that the virus will also affect consumer confidence. However, 33 percent of retailers believe that it is too early to say anything.

Nate Smith, the group manager of product marketing for Adobe Analytics, said that the stores are falling short of basic necessity items like hand sanitizers and toilet papers, and these are the things that are driving online shopping in the state of the pandemic. Adobe Analytics monitors the eCommerce transactions of the majority of the top 100 retailers in the US,

Increase in Demand for Health Products

According to Quantum Metric, a SaaS platform, online shoppers have increased 8.8 percent since the cases of coronavirus have started to come out. According to site search provider, Bloomreach, the masks sales have gone up by 590% in just a single week in February. The hand sanitizer sales have increased by 420% within a week of February.

As medical experts are suggesting the citizens to keep their hands clean, the eCommerce purchases of such items are increasing every week. The sales of other cleaning and medical products such as disinfectants, gloves, packaged water, vitamins, tissues, hand soaps and toilet paper have also increased significantly over the past few weeks.

impact of covid-19 on online retail

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Now that the countries are putting travel restrictions to minimize the spread of COVID-19, people are stocking up the over-the-counter medicines as well. According to Adobe Analytics, the online sales of cold, cough and flu products have gone up by 198 percent in the US. The online sales of painkillers have also surged by 152 percent.

Since the brick and mortar retailers are limiting the number of goods customers can buy, the online purchases are going up rapidly. The online sales of non-perishable foods and shelf-stable items are also up by 69 percent and 58 percent respectively.

Delay in Delivery of the Online Orders

While the demand for several items is at an all-time high, retailers are now facing a number of problems associated with the COVID-19 outbreak. According to the Global Port Tracker report released by the National Retail Federation and Hackett Associates, the imports at major US retail containers ports have been affected due to factory shutdowns and travel restrictions in China.

According to a survey done by Digital Commerce 360, 44 percent of retailers expect product delays due to the pandemic. 40 percent of them expect a shortage in inventories. Since China is one of the largest markets for product manufacturing and fulfillment centers, things may take some time to get back to normal.

Few Things Every Retailer Needs to Consider

At this time of crisis, people are investing in stockpiling essential items. This may temporarily divert funds from more discretionary purchases. Even if a retailer is able to predict the sales, they will be working closely with the suppliers and logistics providers. Since they are already facing a different set of challenges, they are most likely to have difficulty meeting their normal order volumes or delivery deadlines.

Moreover, the warehouse staff can’t work remotely from their home. So, a retailer needs to consider how to respond to the situation when there’s a case of COVID-19 infection at the warehouse. A lot of warehouse staff are calling in sick, leading to understaffed warehouses. This is also contributing to the cause of delay in delivery.

In conclusion,

For the next few months, it is going to be difficult for retailers to deals with their operations. While the delay in the supply of goods and understaffed warehouses are reasons to worry, retailers have a bigger problem to handle, i.e. the fear among the consumers. A lot of retailers are taking a significant number of measures to ensure their stores are safe for the consumers by deep cleaning and sanitizing.

While online retailers don’t have to worry about the stores like their brick and mortar counterparts, they also need to take proper measures to ensure the safety of their customers. However, to overcome this crisis working on the safety of the customers is not enough. Retailers also need to take steps to rebuild consumer trust, as the world fights coronavirus.