What Long-term Consequences Might COVID-19 Have on eCommerce

It’s been over a year since Boris Johnson announced the first national lockdown to try and control the rapid spread of an infectious virus. One year later, we are in another lockdown, but feeling more optimistic due to the plan to lift government restrictions over the coming months. While the short-term effects of Covid-19 are clear, the long-term consequences are open to some debate. In this article, we’ll speculate on how the eCommerce industry might have been permanently changed by the global pandemic.

More Online Shopping

A widely accepted consequence of the global pandemic is that it’s changed customer shopping habits in a big way. Millions of consumers turned to online shopping during the first lockdown, which opened the eyes of many who had previously relied on retail stores for all their shopping needs. With 58% of consumers now expecting to do more online shopping after the pandemic than they did before it, many eCommerce stores are expecting to continue receiving more online orders than they did before the pandemic erupted. Discovering the simplicity of online shopping, these newly converted consumers will help spark further growth in the eCommerce industry.

Growth of the Industry

Over the course of 2020, online sales increased by 46%, which is the largest growth of the eCommerce industry in over a decade. The largest increase was achieved by online food sales, which grew by 79.3% according to the ONS. The growth of the eCommerce industry has been driven by increased online shopping and supported by struggling retailers desperately setting up an online store. In July 2020, over 85,000 onlines stores were set up in response to the UK’s first national lockdown, giving online shoppers more choice than ever.

To protect their businesses, many retailers explored new avenues in the eCommerce industry to survive lockdowns where their retail stores were closed. For instance, one study into the impact on retail found that 31% of participants introduced in-store pickup, while 26% chose to introduce home delivery. The global pandemic has not only shown consumers the benefits of online shoppers, but shown retailers why having an online presence is crucial.

Growing Courier Companies

Due to the global pandemic, UK courier companies were forced to quickly ramp up their operations and expand their infrastructure to ensure they didn’t suffer a huge backlog of deliveries. This expansion of fleets and workforces is likely to remain in place even after lockdown rules are lifted due to the growth of the eCommerce industry. Courier companies and the eCommerce businesses they serve need assurance that they can manage any further spikes in demand brought on by another wave of the virus or any other economic changes that may trigger an increase in eCommerce sales.

Here are some statistics which show how courier companies responded to the pandemic:

  • DHL invested £17.5 million in expanding its operations
  • DPD added over 20,000 people to its network
  • Hermes invested £30 million to expand its capacity, including hiring over 10,000 new staff

Due to the growth of online shopping and a hectic festive period, the final quarter of 2020 proved to be the busiest in Royal Mail’s history. On the delivery company’s busiest day, workers delivered 11.7 million parcels, 32% higher than the busiest day during the first national lockdown, showing remarkable growth. As a result, Royal Mail has decided to expand its workforce by retaining nearly one third of the temporary staff it recruited during Christmas. 

Summary

Overall, experts are optimistic that the global pandemic will have a positive impact on the eCommerce industry in the long run. Due to retail store closures, online sales skyrocketed and the growth of eCommerce has accelerated. Many consumers have seen the benefits of online shopping and many retailers have now invested in online stores in a bid to survive a challenging period for high street retail. The growth of the eCommerce industry may slow down when national restrictions are lifted and retailers can open their doors again, but online shopping will remain strong.

If you’d like to partner with a third-party logistics warehouse that will efficiently manage your order fulfilment process, please contact us.

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