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COVID-19 Drives E-Commerce Growth for Brick and Mortar Retailers

May 29, 2020

The coronavirus pandemic has compelled consumers to stay home in quarantine, driving some brick and mortar stores to either move online or adopt a combination of both in-store (curbside pickup) and online sales methods for the first time. 

This shift is becoming essential for merchants during these uncertain times, as they keep doing the needful to match pace with customer demand, make sales, and ultimately stay in business. 

This transition doesn’t have to be viewed as a negative undertaking though, as it has been happening for years and there are countless tools available for retailers of all sizes to assist in this move. Eventually, brick and mortar stores will reopen, so retailers should view e-commerce as a complement to physical stores, rather than a replacement for in-store shopping experiences.

The growth of e-commerce

The growing popularity of e-commerce is nothing new, as more and more consumers are taking advantage of the ease and simplicity of shopping online for almost anything. In the United States alone, retail online sales surpassed $365 billion, up 33% from just two years earlier, while projections (pre-COVID-19) show e-commerce sales reaching $600 billion in just three years.

Forever 21, a retailer of low-priced, specialty apparel, closed 178 stores nationwide and moved their business 100% online in 2019. The video game, consumer electronics, and gaming retailer GameStop closed about 200 stores in 2019 because customers can easily purchase games on the web that are designed for PCs and consoles, such as Xbox and PlayStation. 

Since the introduction of COVID-19 and the resulting worldwide quarantine, some larger online retailers have seen increased sales and revenue because they already had an online presence. Walmart, for example, had sales reportedly jump 20% in March, as people “panic-shopped,” and stocked up on essentials. Conversely, other large companies have struggled with the transition to selling 100% online. Retail giants Kohls and Macy’s, whose stock values have dropped in 2020  approximately by 63% and 65% respectively, only account for about 20% of their sales online. They will need to make drastic changes and reappropriate their efforts in order to adapt to the changing marketplace to increase online sales and continue to reach their customers.

G2 senior content marketing specialist Deirdre O’Donoghue comments about the future of commerce:

quote by G2 senior content marketing specialist Deirdre O’Donoghue about the future of commerce: “Technology is ever-evolving. With new platforms, tools, and businesses popping up every day, it’s hard to get ahead of the curve. The future of e-commerce is bright, with all sales projected to grow in the next 10 years.”

Brick and mortar stores are moving to e-commerce

The data and challenges outlined above demonstrate the growing need for retailers to adopt e-commerce platforms.

However, It’s important to recognize that there’s more to running an e-commerce store than just creating and maintaining it. These platforms offer a variety of features and services to cover everything in between, including:

  • Running e-commerce businesses on a single, unified platform
  • Managing e-commerce products and services
  • Being flexible and customizable according to business goals and objectives
  • Scaling according to business size and need
  • Integrating with catalog management or inventory management software
  • Offering security, encryption of data and information, or both, while following e-commerce regulations

E-Commerce Platforms ➜

G2 survey of SMB e-commerce platform users

In February/March 2020, G2 surveyed* users of small business (SMB) e-commerce platforms to gain insight into the perceived value of software being used and user satisfaction. The overall average satisfaction of e-commerce software was 7.8 out of 10, while the most valuable feature was visual content, design, and branding (31%), followed by marketing and sales support (29%). Almost 43% of all respondents currently use Shopify as their e-commerce platform, with 29% of retailers using WooCommerce, and 14% using a variety of others. Not only can this software allow retail companies to successfully display and represent their products to their customers, but it also offers customer service to support their sales, which is important to all organizations.

G2 survey graph: SMB e-commerce platform users to gain further understanding of their satisfaction and perceived value with their software
*G2 surveyed 70 current users of non-enterprise e-commerce platforms from 13 countries between February-March 2020.

Some small retailers were fortunate and smart enough to utilize e-commerce software before the COVID-19 outbreak, even if they weren’t seeing immediate results. For example, Gary Fisch, the owner of Gary’s Wine & Marketplace, launched a mobile app years ago and was initially disappointed that more customers weren’t using it. With stay-at-home orders due to the coronavirus pandemic, he has been able to continue to drive sales through his online store. In fact, sales increased 40% in March due to customers stocking up on merchandise, even though his customer count was cut in half. 

This illustrates that other retailers can have the same success transitioning to mobile e-commerce or an exclusively online store, especially when utilizing the countless commerce management software available. Retailers shouldn’t worry about competing with retail giants like Amazon or Walmart, but rather should be concerned about servicing their current customers with the same level of customer service and product quality that would be delivered if the customer were in-store.

Michael Fauscette, G2's Chief Research Officer, explains:

“The current crisis is the biggest business disruption since the great depression. I believe that the rapid move to an online business model will accelerate digital transformation for all the businesses that survive, and signals the end of the face-to-face economy.”

Over the past two months (March-April) on G2.com, the number of category pageviews for e-commerce platforms increased 33%, and individual product pageviews increased by 42%. Users are also spending more time reviewing these pages. During the same period, consumers spent 36% more time on each product profile they visited. In general, e-commerce products saw an uptick in page views of nearly 40% during that period, and the number of hours spent on product profiles increased 23%. These numbers illustrate how important it is for retailers to establish an online presence, and how important selling products online currently is for these companies.

Safety concerns about COVID-19 and delivery services

While everyone is taking precautions against coronavirus infection by wearing masks and gloves and disinfecting groceries and packages, some consumers are still wary of receiving deliveries from online retailers. 

Global health experts and the World Health Organization (WHO) have provided data showing that given enough time (and proper environmental conditions), the coronavirus is unlikely to survive on most packages that reach consumers. Experts have found that the virus can survive anywhere between three hours to three days depending on the material; so this information, along with the slowdown of many delivery services, makes the likelihood of a package being infected very low.

The WHO adds:

“The likelihood of an infected person contaminating commercial goods is low and the risk of catching the virus that causes COVID-19 from a package that has been moved, traveled, and exposed to different conditions and temperature is also low.”

This information further emphasizes that e-commerce is a necessary solution for providing safe and convenient services that all consumers can benefit from during the coronavirus pandemic.

As e-commerce continues to grow and brick and mortar stores rapidly struggle to keep up with the ever-changing marketplace, the need for these companies to move their sales operations online is more important than ever. Drastic changes are needed to not only keep up with the demands and needs of today’s consumers, but also to survive as a business.

Even after the coronavirus is long gone, it’s hard to deny that the retail landscape will continue to shift online. Retailers of all sizes need to embrace these changes and utilize the plethora of software available that can aid them in this transition.

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