COVID-19: Could the coronavirus change consumer behaviour forever?

It has been well documented that the coronavirus pandemic has made a dramatic changes to consumers’ behaviour. With lots of retailers having to close their stores, people are turning their attention to e-commerce. Will this growth in e-commerce continue in the post-virus times?

The e-commerce growth trend was already happening before the pandemic, with the online retail sector growing eight times faster than the brick-and-mortar market. E-commerce in New Zealand was forecasted to grow more than 20% to $9.7 billion in 2023, according to a report from EFTPOS provider Worldpay. Many economists and advisers are expressing strong belief that COVID-19 will precipitate an even more rapid increase in e-commerce activity.

More online shopping

In a recent Forbes article, “9 Future Predictions for a Post-Coronavirus World,” Bernard Marr, strategic business and technology advisor to governments and companies, notes: “After COVID-19, businesses that want to remain competitive will figure out ways to have online services even if they maintain a brick-and-mortar location, and there will be enhancements to the logistics and delivery systems to accommodate surges in demand, whether that’s from shopper preference or a future pandemic.”

According Paul Martin, UK Head of Retail at KPMG, COVID-19 will precipitate a rapid increase in e-commerce activity. “Online is an increasingly important channel in the UK, and we know there is a penetration of about 20%. I would argue this pandemic will significantly increase these penetration rates: individuals who have not interacted with online [businesses] on an everyday basis will now, in many cases, be forced to do that. I also think it is very likely we will see an acceleration of the demise of the physical store.”

The scope of industry-specific growth

The level of growth in e-commerce activity in the post-virus times will likely depend on the industry. One of the industries where we can foresee behaviours changing most dramatically is grocery shopping.
Guy Elliott, Senior Vice President, Retail & Consumer Products EMEA & APAC at PublicisSapient says, “The thing about online grocery shopping is that for the most part, once people get into the habit of doing it, say after three or four purchases, it becomes a routine, and you don’t go away from it easily. I believe if this continues for a while, we will see a significant sustained shift to online purchasing, even post-virus.”
There is a high chance that New Zealand will follow recent trends in Europe, where e-commerce is seeing exponential growth. According to Eurostat, a quarter of Czechs made at least one online grocery purchase last year, comprising the third highest share. (In the Netherlands, it was 35% and 30% in the UK). Quarantine has brought massive growth in demand for online food purchases, and spending has increased by 215%. Purchase of ready meals from restaurants increased by 120%. Europe is also experiencing a significant increase in online fashion shopping, which is up 129%. Stores offering household equipment are enjoying a 162% leap in business.

Cash all but set to disappear; mobile payments are the future

The pandemic will also increase the adoption of online payments. Data from the Czech Republic show a greater preference for paying by card or mobile, as demonstrated by a one-third reduction in ATM withdrawals. This shift to electronic payment will favour the predicted increase in e-commerce. A report from Worldpay showed Kiwis are already moving towards shopping on their phones, with 42% of all online purchases last year done via mobile. That figure was estimated to grow to 59% percent by 2023.
mobile payments

Use innovation to grow your business

COVID-19 might be taxing our systems and patience, but it’s also building our resilience and driving us to develop new and innovative solutions out of necessity.
Implementing e-commerce as part of your business strategy might be the right step forward.

We are currently running a special on e-commerce websites starting at $1500 + GST.

Please get in touch to discuss the right solutions for your business!

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