How has COVID affected ecommerce in Australia?
Nov 18, 2020
There’s good news for Australia—and for ecommerce. COVID cases in Australia are down to a tiny trickle right now and a vaccine is finally in sight. Meanwhile, eConsultancy has forecast global cross-border ecommerce sales could increase by 56% in November, followed by a 70% growth in December as shoppers prepare for the holiday season. With the ongoing shifts in the ecommerce landscape, SEO companies in Melbourne and across Australia have been working to help clients take advantage of emerging trends and opportunities.
Unfortunately, not all businesses will be able to benefit equally from the surge in online shopping that COVID-19 and the subsequent lockdowns brought on. There will be new winners and new losers. To make sure that your business is a winner in the online marketplace, we must understand how the pandemic has impacted business and ecommerce. Here are a few trends that can help you plan better for the coming days.
Online Shopping has Increased
The latest numbers are coming in from the U.S. where consumers spent $21.7 billion online in the first 10 days of the holiday shopping season—a 21% year-on-year increase. Another survey held last month shows 62% of consumers continue to shop online more than they did before the lockdown.
Not All Businesses are Winners
The pandemic has impacted different types of business in different ways. According to data gathered by Power Retail, 46% of online retailers have experienced a decline in sales ranging from 10% to more than 20% as a result of COVID-19. On the positive side, 20% of Australian businesses have seen their sales increase by 20% or more.
Panic/Bulk Buying is Giving Way to Stability
According to BazaarVoice, the lockdowns caused a temporary surge in online buying of masks, toys and games, and groceries. As the immediate effects of pandemic started to slow, shoppers increasingly started purchasing home and garden improvement products. The business and industrial and toys and games sectors are still seeing growth, but not as significant as it was during the pandemic. Hardware, sporting goods, and vehicles and parts are the biggest winners with a 134%, 110% and 83% year-on-year growth in online sales, respectively.
The Number of Home Deliveries Has Increased
As the lockdowns started in April, the number of home deliveries surged by 91%. A study by Australia Post showed that in the weeks running up to Mother’s Day, home deliveries of fashion, arts and crafts items, and beauty product deliveries increased by 140%, 140%, and 130% respectively.
Delivery Delays Have Spiked
With the surge in orders, delivery delays also increased. Online retailers were taking an average of 1.5 days longer than normal to fulfill orders, with even longer delays for large-format or heavier products. COVID safety regulations such as social distancing and employees calling in sick also contributed to the delays.
Online Search Behaviour has Changed
Google has published data on recent search trends. Search interest has increased in topics such as:
- “Can you freeze” (different types of food)
- Home delivery
- “With me” videos on YouTube ( e.g. “cook with me”, “study with me”, “disinfect with me”)
- Multiplayer video games
- Virtual happy hour
- Do it yourself
- Stationary bicycles
- Dumbbell sets
Meanwhile in Australia, searches for “yoga near me” have been replaced by “online yoga”.
Disposable Income Has Shrunk
According to the Reserve Bank of Australia (RBA) forecast, the quarter ending December 2020 will see an unemployment rate of about 10%, GDP contraction of around 6%, and a decline in household income of around 7%. Data from BT indicates that 58% of households have already had their income slashed as a direct result of COVID-19. 71% of consumers have reduced their spending, held off taking new loans, or put high-value purchases on hold.
How to Adapt Your eCommerce Business to the New Normal
While many businesses are eager to return to a pre-COVID “normal”, the reality is that the way people work, shop and generally live their lives has been irrevocably altered by the pandemic and the ensuing lockdowns. As one of the premier digital marketing agencies in Melbourne, we have been analysing shifts in search behaviour and the ecommerce ecosystem throughout the pandemic. As we all settle into a post-COVID world, Australian ecommerce businesses will need to adapt to the new normal. We have developed tailored strategies for helping our ecommerce clients evolve to meet these new conditions. And in doing so we’ve identified a number of general tips that all digital businesses can use to start to meet the new normal.
- Acknowledge the new reality and find out how customer behaviour has changed in your sector or niche.
- Create content that meets the changes in search behaviour and informs people about new topics of interest relating to your products or services.
- Try to fill the gap between online supply and demand that exists in specific product categories. Examples of gap sectors, according to KPMG, include health and beauty, grocery and liquor, recreational and other goods, appliances, apparel, and homewares.
- Inform people clearly and in detail about your operations during the pandemic and reassure them that you’re there to help.
- Take steps to minimise shipping times, improve customer experience and provide more safety and convenience to consumers. Help customers with cancellations, refunds, and customer service.
- Take advantage of the new search trends to optimise your website and content for SEO and to run paid search campaigns.
- Optimise your website and sales pages for conversions by killing the new pain points that might keep your customers from purchasing your products. Examples include touchless deliveries and COVID safety measures.
- Understand that your customers might have reduced buying power after COVID-19. The financial indicators are forecast to start improving as we step into 2021, but online sellers of expensive goods may need to plan better to get through a lean period caused by reduced consumer disposable income.
COVID-19 has changed the world around us in significant and complicated ways. Most ecommerce sectors are facing increased traffic and demand because of the pandemic. Most of the incremental impact is likely to stay even after COVID-19 is over, as consumers continue to prefer the safety and convenience of online shopping. A huge opportunity exists for ecommerce businesses that can correctly gauge the impact of COVID-19 on their specific business sectors and take the right steps to capitalise on the new trends.