Warhouse worker during COVID-19 crisis

Lessons from the COVID-19 Crisis for Ecommerce Distributors and Online Retailers

by Amy Silvers on June 3, 2020

The coronavirus laid bare many of the weaknesses in ecommerce business processes. It also revealed tremendous opportunity for companies that can overcome problems and deliver for customers and employees.

According to recent data, online retailers in the U.S. saw a year-over-year (YOY) revenue growth of 69% by mid-April of 2020. All online retail and ecommerce orders saw 146% growth by the end of April, and online conversion rates saw an increase of 8.8% in February. People have embraced online shopping during the COVID-19 crisis.

Many see ecommerce as a safer, more convenient way to purchase. As communities implemented stay-at-home orders and social distancing guidelines, consumers relied on ecommerce for purchases and staying connected to the outside world.Proven Results. Proven Techniques Sales Enablement with GO2 Partners

Ecommerce businesses are benefiting, but it is benefits that also come with risks. In this article, we’ll look at how smart businesses are overcoming risk. We’ll review the lessons learned from the COVID-19 crisis for ecommerce and identify the steps companies can take to reduce risk and protect themselves in the future.

Impact of the Coronavirus on Ecommerce Distributors

Looking at the surface data, it would seem the coronavirus drove ecommerce sales, but this isn’t the whole story. COVID-19 has been a challenge for everyone, including online retailers and ecommerce distributors.

Behind the sales numbers, ecommerce struggled with numerous challenges. Increased demand put pressure on resources – both critical supplies and manpower.

Critical supplies were often in short supply, with new inventory in doubt or missing. Supply chain challenges become a critical impediment to meeting rapidly increasing demand. Stay-at-home orders not only drove sales, but also impacted suppliers.

This problem was even worse for businesses that relied on a single or limited supplier. Suddenly, the company would have orders to fill even as they were searching for or setting up a new supplier. Either that, or orders would ship late if they shipped at all. Business was lost and customers were angry.Reduce Costs and Increase Efficiency Take the pain out of your Ecommerce Shipping

Manpower was also an issue, especially for businesses that didn’t make protecting workers a priority. As COVID-19 spread through communities, workers would hear that close contact like a warehouse could put their health, and the health of their family, at risk. To work effectively, employees need to know their health isn’t in jeopardy.  

As many ecommerce distributors and online retailers discovered, the solution isn’t always relying on more resources to meet demand. You can’t always hire more help or pay more for dwindling critical supplies. You need to work smarter.

Lessons from the Coronavirus for Ecommerce Distributors

As business begins to re-open, let’s look at what we have learned from the crisis.  By studying the weaknesses in our response, we can identify ways to better prepare for the future and to strengthen online retail and ecommerce distribution businesses today.

1.     The Connection between Reliability and Online Profitability

Many ecommerce companies looked to drive sales during the crisis with incentives and discounts. In fact, some reports showed that up to 73% of the top online retailers ran median discounts as much as 40% in April and May. That said, many have also reported lower than expected return customers.

In the end, incentives and discounts sparked a temporary boost in revenue, but retaining that boost for the next sale requires a better shopping experience and reliable shipping.

Companies with an inadequate shopping experience could drive sales by price, but left customers little reason to come back for future sales. B2B customers are especially sensitive to a problematic online experience.  – the added value the ecommerce customer is looking for. Sure, a discount is a powerful tool, but make sure your website, technology and back-end infrastructure can support the pressure and deliver results for your customers.

2.     The Advantage of Distributors to Protecting your Supply Chain

Many companies struggled during the COVID-19 crisis with supply chain issues. In fact, 75% of all businesses reported supply chain disruption. This disruption occurred not only with retail products, but also critical supplies like shipping labels and protective packaging. One way to protect your online business from supply chain disruption is to use distributors.

A distributor will use a much larger supply base to ensure that you have the critical supplies you need. They don’t rely on a single vendor, and so can better shield you and your business from supply chain disruption. When a problem occurs, they can utilize another vendor to ensure you have the critical supplies you need.Your marketing goals in reach. Contact GO2 Digital Marketing today.

The distributor does the necessary research on suppliers and vendors to vet supply sources. They provide the redundancies and protection you need to reduce risk. They understand the market and can build deeper relationships with suppliers, then leverage that relationship when they need to.

Often, all this additional value is accompanied by a lower overall cost because the supplier has greater buying power and better understands the market.

3.     The Importance of Protecting your Employees

Even as the demand for product increased and business grew, many online retailers struggled to fulfill orders and ship product because of manpower. Employees were concerned (understandably) for their health and safety. During a time of crisis such as this, many want to be with family.

Your employees are your greatest asset. You need to treat them as such. As we learned throughout this COVID-19 crisis, that means looking at how to support and enforce social distancing on the floor and in the packing area. That means providing PPE such as masks, hand sanitizer and dispensers. That means doing a temperature check before each shift. That means providing support, so employees feel comfortable and safe at work. They need to know you have the health and safety of their family in mind.

In the past, it was much easier to hire new or find additional resources to cover for labor gaps. Today, it is more important to support and nurture existing employees, so you have their support in a crisis.

Looking Ahead: Where Does Ecommerce Go from Here

Even as the restrictions lift and the pandemic moves to new phases, the massive gains we’ve seen in ecommerce adoption are here to stay. Many still fear crowds, and the threat of a second wave of sickness hangs over us.

Many consumers will continue to be more comfortable with online shopping. Demand will continue to grow, and it is up to ecommerce companies to continue to refine and optimize the experience – not just the online experience, but also the experience for employees.

The current crisis has not only created opportunities for online retailers and ecommerce distributors but also accelerated the growth of online shopping. In doing so, it has exposed industry weaknesses that once weren’t prevalent. Companies that aren’t taking steps to address those weaknesses will quickly find they are losing market share to better prepared competitors.

If you’d like to learn more, or are interested in talking to an ecommerce expert about how GO2 Partners has become a leader in partnering and supporting many of the largest ecommerce companies in the world, then contact us today.

We’re here to help.

Topics: Ecommerce