Learn how your peers are coping with the COVID-19 crisis and what we can learn from them. This article shows how hard companies were hit and the difference e-commerce made to their operations and growth. More importantly, it highlights what you can do today to be prepared in the event of another crisis.
Published by k-eCommerce
The COVID-19 pandemic has disrupted businesses in virtually every industry, and significantly affected how consumers make purchases. There is not a company in North America that hasn’t felt the ramifications of policies enacted to flatten the curve of the pandemic.
k-eCommerce recognizes that small and medium-sized businesses across the US and Canada are scrambling to adjust to the COVID-19 pandemic. None of us have faced a challenge on this scale before.
We surveyed our e-commerce clients in order to better understand what business owners and companies are doing to weather the storm, and how different industries are faring. More than 11% of the 700 companies we surveyed responded.
Here are some of the statistics they shared with us.
Cost Containment
The vast majority of respondents (94%) have taken steps to contain costs as a result of COVID-19. More than 80% of companies have reduced spending, while 36% have reduced and deferred payments, and 33% have issued temporary sales restrictions.
Some respondents have had to lay off employees to contain costs during the pandemic. More than 30% of respondents reported laying off 15% or more of their workforce. Only 16% laid off between 5%-15% of their teams, while 5% laid off less than 5%.
A large percentage (45%), however, reported no change in staff numbers. Also notable: there was no reported hiring.
Budget Planning
Decrease in sales and general uncertainty about the future has also affected some companies’ budgets — but not all. In fact, 33% of respondents said it had no effect on their 2020 marketing budget. 44% reported no effect on their e-commerce/IT budget.
Of those companies who reported adjustments, 31% reduced their 2020 marketing budget by 15% or more, while 17% reduced their e-commerce/IT budget by 15% or more.
There was no clear consensus among respondents about when business would return to normal. Roughly a quarter of business owners expect normal operations within three to six months; another 25% estimates six to 12 months.
Sales Growth
There have been strong indications of growth in some sectors. A small percentage (3%) of the respondents have
A large percentage of the decreases reported (46%) fall between 20%-50%. Only 22% of respondents reported a more significant drop of 75% or more.
COVID-19’s impact on online sales is less clear from the survey. 28% of respondents reported a growth in sales, while 36% have seen no change at all. 31% have seen a decrease.
Customer Growth
Shopping habits have changed dramatically with the COVID-19 pandemic. Changes in consumer expectations — from how they find goods to how they make their purchases — will have ramifications for business-to-consumer (B2C) and business-to-business (B2B) companies long after the economy recovers.
Peter Noel Murray, who operates a consumer psychology practice in New York, explains: “When there are serious changes in lifestyle and life circumstances, there is a fairly dramatic change in preference for brands that consumers use, and their perceptions about those brands.”
However, the biggest impact COVID-19 is having on consumer behavior (short-term and long-term) is strong reliance on and increased comfort with digital offerings.
The crisis has accelerated the digital transformation, especially in older age demographics who have traditionally been skeptical of online shopping. The most startling statistic demonstrating this drastic change is a drop in store visits by 90% in a single month.
Similarly, according to SmartCommerce, “Nearly 40 percent of current online grocery shoppers made a first online grocery purchase in March.”
Remote Work
From teachers to sales representatives, social distancing has led to an increase in remote workers. If your team wasn’t remote already, your business probably had to make some huge adjustments.
Of course, not every company runs their remote team the same way. There are different systems and styles of
This training is for more than the COVID-19 crisis. Adjustments in company structures for employees working at home is not just short-term.management. Whatever the work-at-home solution is, it’s vital to spend time training your employees.
According to TalkWalker, “23.1% of working from home conversations are driven by technology and related matters.The displacement of significant parts of the workforce has required a significant technological input.”
How E-Commerce SMBs Are Investing
44% of the e-commerce businesses we surveyed were considering enriching their online channels through further investment during the COVID-19 crisis. Based on the data we gathered from our B2B and B2C customers, these are the top five e-commerce features businesses consider a priority to their success online:
- Real-time shipping rate calculations from carriers like FedEx, UPS, USPS, Canada Post and Canpar
- Form-building tools that capture customer data from the e-commerce website
- Personalized web promotions (e.g. free shipping, discounts, buy one get one free, etc.)
- Key performance indicator (KPI) and customer behavior analysis via Google Analytics
- Electronic transaction processing (credit card payment/ACH/EFT) directly through the ERP for sales orders
Further, 38% of those surveyed expect their B2C channels to grow in the wake of the crisis.
COVID-19 and Your Industry
If the pandemic has taught us one thing, it’s that the role of digital commerce—in every industry—is more important than ever. While it isn’t a cure-all, e-commerce provides a critical lifeline of sales and growth for small-to-medium businesses whose operations have been hit by brick-and-mortar closures
And while e-commerce isn’t a cure-all, it provides a critical lifeline of sales and growth, both for large enterprises and for small to medium businesses alike.
For a detailed look at how the COVID-19 pandemic has affected your industry, and how businesses like yours are making strides to recover and grow, download our full report for free.
