How Cross Border eCommerce Retailers can navigate Covid-19 and beyond

By eShopWorld/Edel Corrigan

Covid-19 has wreaked havoc across the world with the OECD estimating that most economies would see falls of between 20-30% GDP in the second quarter of the year.

Retailers across all channels, eCommerce included, have been impacted by the crisis with disruptions to supply chains affecting production, and social distancing directives impacting warehouse packing and fulfilling of orders, as well as physical store closures for brick and mortar stores and a sharp fall in spending in many categories.

However, while the effect of Covid-19 on eCommerce retailers has been significant, such retailers can also implement measures to mitigate the effects in the present time and also look to the future to see how to protect as far as possible against similar crises.

eCommerce growing during crisis

It may not be surprising to find that cross border eCommerce has seen strong growth globally even during the crisis, as once the initial panic subsided shoppers still needed to purchase items and so turned online. In fact, eShopWorld has seen 109% YOY during the month of May alone which suggests that even during these difficult times, brands that are geographically diversified are in a stronger position.

The countries showing the highest growth y-o-y through the eShopWorld checkout in April are:

  • Israel: up 178%
  • Ireland: up 173%
  • New Zealand: up 168%
  • Canada: up 152%
  • United Arab Emirates: up 133%
  • Chile: up 126%
  • Australia: up 116%
  • Belgium: up 110%
  • Switzerland: up 97%
  • France: up 92%

And in May from 1-14:

  • Mexico: up 258%
  • Chile: up 242%
  • Singapore: up 214%
  • New Zealand: up 207%
  • Israel: up 206%
  • Ireland: up 199%
  • Russia: up 194%
  • Spain: up 165%
  • Canada: up 157%
  • United Kingdom: up 146%

This data indicates that shoppers from all over the world are starting to shop or are increasingly shopping online. This gives eCommerce retailers an opportunity to access customers that may never have shopped online before. Acquiring new shoppers in this time, and delivering an excellent experience to them, gives eCommerce retailers an opportunity to keep them when things go back to ‘normal’, although the new normal is likely to be different to what came before.

Customer Buying Online

Consumer behavior changing in a time of crisis

Due to factors outside of their control, most brick and mortar stores have had to shut down during the pandemic, seeing a dramatic reduction in footfall and sales. Businesses with an eCommerce operation were able to weather this better – if they were in a position to fulfil online orders.

Consumer behavior has changed for a number of reasons – both because shoppers have been physically unable to shop, but also because they paused non-essential purchases in the first weeks of the crisis. This could be due either because their jobs and economic situations were immediately affected, or because they were waiting to see if the crisis would impact them. While there was a dramatic fall off in shopping – even online, after some weeks of the pandemic sales of items (other than groceries) started to increase.

Significantly, gym equipment and at-home beauty treatments saw a sharp increase in sales (IMRG Data – over 140% YOY), and as the weather improved, sales of clothes and gardening equipment also accelerated. Even in lockdown, shoppers have continued to make purchases and adjust their behavior to new paradigms.

Brands’ response to the crisis

Brands have had to pivot rapidly to respond to lockdowns or even the call out by governments for support in manufacturing essential PPE or supplies. A number of brands have answered those calls with Burberry converting its Castleford, Yorkshire factory, which makes trench coats, to make masks, and non-surgical gowns for patients, and Laura Ashley, even while in administration repurposing its factory to produce scrubs. Many other brands and retailers are responding similarly where possible.

Brands also need to pivot their business models in order to overcome not only the impact of shut downs and changed consumer behavior, but also disruption or shut down of the supply chain, especially if the brand is – as many luxury retailers are – reliant on fabrics, supplies, or products sourced from China, which was the first country to be hit.

Gap, which has converted its North American factories to make masks, gowns and scrubs, has asked its suppliers to cancel summer orders and stop producing items for the autumn, except for those to be sold on its online platform.

H+M has cancelled vendor orders and as of April 2020 was only accepting shipments of products already manufactured.

Making Face Masks

Luxury in a time of crisis

Luxury brands, which has been and will no doubt continue to be hard hit by the pandemic, are embracing social media and eCommerce in this time, and adapting to a new way of selling where possible.

While the impetus to sell stock might be to discount heavily catalogue-wide, some brands such as Elder Statesman believe this could damage their brand. Founder Greg Chait said, “Nothing’s off the table,” he said. “But we’re not going to do anything that hurts our brand.”

With physical fashion shows – a key way that luxury brands communicated with their audiences – cancelled, the industry has been quick to look at alternative ways to showcase their goods, with virtual, closed door shows, and Instagram or Facebook lives becoming popular.

Similarly, travel has traditionally been a huge part of the luxury apparel industry, with many Chinese shoppers in particular preferring to buy products while travelling abroad. Travel restrictions and lock downs have impacted this sorely, and luxury retailers will need to be innovative in how they reach these shoppers to provide an equivalent experience, in so far as that is possible.

What’s next for eCommerce?

It seems very likely that there will be changes across the board both for brick and mortar stores and eCommerce retailers after the crisis. Whether it’s implementing new processes around safe delivery or face to face shopper interactions, no one knows what the future will hold.

However, some initiatives that were adopted or improved during the pandemic are likely to stay. As many retailers have no doubt seen the benefit of having a mature eCommerce operation during these times, it is likely that omnichannel, where the online and offline experience is aligned, is likely to be further adopted, refined and improved to provide an excellent shopper experience.

Advances in technology for supply chain and inventory management – giving retailers a clear view of how stock is positioned at any given time, has already been set in motion with IoT, 5G, 3D printing and robotics all enabling a new evolution of the supply chain that will be better able to mitigate against future ‘black swan’ events. Additionally, with traditional fitting rooms unlikely to be quickly re-adopted by consumers, AR lenses are being increasingly used by brands, allowing shoppers to ‘try on’ products virtually.

Other innovations that will impact the industry include using robots for picking and packing and drones for delivery – both of which have been implemented to assist health care in China already, and the benefits of using such technology for retail are clear.

Drone Delivery

Looking to the future

While no one can predict the future of retail post-Covid-19 it is likely that a ‘new normal’ will prevail. eCommerce Retailers navigating the pandemic now can prepare for this by analysing the data available to them, monitoring advances in technology and implementing those which are performing well, iterating and reiterating to best serve their particular needs and customers.

Download our latest whitepaper, ‘A New World Order - What Will eCommerce Look Like After COVID-19?’.

Watch our webinars on-demand - ‘Best practice customer centricity in the new retail world’ and ‘Retail is dead, long live Retail’ -  and register for our next webinar on July 15th and 16th, when we’ll be talking about Innovation in Customer Acquisition with Facebook. Follow us on LinkedIn or Twitter to get all the details!

By eShopWorld/Edel Corrigan

Published 25/06/2020

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