Summary: During the pandemic, the great demand for goods and services caused many sectors to benefit, experience significant gains, and increase their market presence and size. The pandemic changed how customers shop, so brands had to pivot their marketing strategies to stay competitive. All this e-commerce boom created an expectation of constant and significant growth. But the future e-commerce growth post-pandemic has been impacted, and it is time to rethink your future growth.

Government recovery measures in many countries, mostly in 2022, especially the United States, increased consumers returning to physical stores, impacting e-commerce growth. Physical stores have attempted to improve the shopping experience to get customers to leave their online comfort zone and return to in-store purchasing. This situation surprised many because business owners did not expect that circumstances would change so quickly and that the development of their businesses would be affected by the resurgence of physical commerce.

Stacey Mason - Director of Optimization

Author: Stacey Mason

7 min read

This Post is Part of E-commerce Series

This article will discuss five e-commerce growth post-pandemic facts to continue thriving amid the physical retail recovery in 2023

Table of content:

        1. Online Presence is Critical
        2. Shopping via Social Media
        3. Spending Amid Inflation Increases
        4. Consumers’ Trust is Critical
        5. Supply Chain Issues
     

1. Online Presence is Critical

The number of online purchases will be maintained at a different rate than in 2020. This action will directly affect how companies manage goods’ demand and make their stock. Many companies in 2020 did not calculate the impact of the quarantine measures and were overwhelmed by customer demand.

By April 2021, there had been an almost 23% rise in online spending, according to MasterCard data, proving that the pandemic-related e-commerce boom was no coincidence. The digital future is here to stay.

Sales growth in 2020 vs. 2021 in apparel (90.7%), Department Stores (202.7%), and Jewelry (255.7%) are just a few of the categories where e-commerce share continues to be higher than the overall retail spending (19.9%). 

As companies adapt to the pandemic, their sales will not only be maintained but will also increase. Businesses need to ensure their mobile user experience is fast, clean, and reliable. Mobile applications have become the main line of communication between companies and customers. That’s why customer experience is essential to maintain sales. 

A poorly performing website will cause more problems than benefits for your company. Maybe your business website and landing page need testing to improve speed and design for more conversions. Get quality testing ideas and the process and strategy to upgrade your website performance and user experience. Our conversion analysts employ quantitative and qualitative approaches to inform, improve, and validate the user experience on your website.

 Also, growth hacking is a great option to boost sales and e-commerce growth post-pandemic and physical sales recovery. Through growth hacking, your business can gain traction and scale quickly. We can help you implement growth hacks for rapid user acquisition, increased activation, and improved retention.

2. Shopping via Social Media

Did your company change direction during the pandemic? Many changes came, and businesses had to understand the significance of employing a variety of digital marketing channels. 

Digital marketing allows companies to share their brand’s narrative online, increase sales and maintain the same growth as during the pandemic. Social media influences the way consumers buy. A study states that 95% of consumers switched to e-commerce due to the pandemic. 

Digital channels stayed as one of the preferred among customers through the 2020-2022 period. In March 2022, e-commerce grew by 27 percent annually; overall, e-commerce penetration increased by 33 percent from the pandemic’s start. 

The enormous task for companies is to keep encouraging their customers to continue shopping online if they want this growth to continue through 2023.

Unsurprisingly, online platforms significantly influence younger people and particularly impact categories connected to beauty, including cosmetics and sportswear.

Social media integration with e-commerce has been a decisive factor in the e-commerce growth post-pandemic. Social media used to refer users to different e-commerce websites in the past, but nowadays, social commerce has evolved into a practical choice for customers. Consumers can immediately complete their purchases on social media sites, referred to as social commerce. They may, for instance, buy a dress from an influencer’s post or an Instagram buying website.  

When it comes to attention, research, comparison, and purchases, social commerce help to save time; social media feeds have become increasingly influential, and more individuals are starting to use them as a platform for online purchases. Facebook and Instagram are the two leading platforms where people buy products.

More social media companies are thinking about including e-commerce functionality in their platforms. TikTok debuted a few shopping functionalities in 2021, and one of the accounts in the cosmetics industry completely sold out of all of its items. The hashtag #TikTokMadeMeBuyIt quickly gained traction. 

Along with using social media for sales, optimizing your website will increase the effectiveness of digital channels. Conversion Management (ongoing optimization) is one of the programs aimed at boosting conversions through constant analysis, best practices, and suggestions. You will experience an improvement in your conversion rate and results as a result of optimization. 

3. Spending Amid Inflation Increases 

The inflation rate has been one of the aftermaths of economic politics during the pandemic in many countries, including the United States. Many businesses suffered during lockdowns, many jobs were affected, and families suddenly lacked the needed income. Congress passed a massive aid package to benefit millions by providing relief. It’s believed that stimulus checks during this period probably caused a gradual increase in inflation.  

Businesses may assume that the customers’ spending capacity has lowered due to this economic phenomenon, but statistics show the opposite. This graph shows how customers continued to spend amid a historically increased inflation rate. 

 Consumer spending experienced slow growth despite the inflation. United States consumers continued to open their wallets in early 2022. The United States saw its most significant inflation in a decade from May 2021 to March 2022, rising to about 8.5 percent in March 2022. Nonetheless, US consumers spent 18% more in March 2022 than they did two years before and 12% more than expected to purchase based on the pre-pandemic trend. 

Although there was evidence of atypical economic growth in 2020, the economy remained strong, as might have been expected once the government lifted the pandemic’s restrictive measures. Consumers saved significant money and did not hesitate to dip into those savings. But customers not only used their savings; many also used credit cards that maintained this spending trend during these months of the year. So, although spending growth slowed, it dropped less than many might think. You can rest assured that even though the inflation rates are still increasing, you will experience e-commerce growth post-pandemic. 

4. Consumers’ Trust is Critical

Over the past two years, several big-box and mid-sized businesses have focused on developing customer trust. People found a new practical manner of making deals as a fresh wave of digital clients flooded their websites. However, companies discovered during the pandemic that establishing trust online posed fundamentally different difficulties than doing so in a physical location. Factors like supply chain issues made customers’ loyalty plummet. eMarketer said that more than 80% of customers reported buying a different brand than usual in the middle of 2021, a trend that began early in the pandemic.

The sudden move from in-person shopping to online was definitive for losing the affinity with customers. So making the customers feel comfortable again is a challenge for online companies as they are in an in-store environment. Building customer loyalty again is an enormous challenge. Consumers are difficult to regain after they have left. If a customer had changed brands in the last three months, more (44%) than (36%) would choose to repurchase the new brand even if the original preferred brand was available again. 

What motivates customers to make these decisions? More than 65% of consumers were influenced by alternative products’ lower costs, while 51% of customers wanted to switch because the original brand was out of stock. 

According to Amazon, one of the brands with the best customer service in the industry, consumers are conducting more research than ever before to make purchases confidently. In fact, according to their study, 87% of Canadian customers say they conduct more research now than they did five years ago before making a purchase. All customers want is trust. They want to feel assured and confident about the products they are searching for. 

What can your company do to regain the trust of customers? Provide outstanding customer service. Taking care of a comfortable experience should be the primary objective of maintaining your company’s e-commerce growth post-pandemic era. Customers need to feel they have someone from the company to solve their problems, just like if they were in a brick-and-mortar store. You can remove all obstacles that prevent your customers from having a superb experience.  

We provide conversion optimization best practices, analytics, and heatmaps to uncover and address specific barriers to your customer experience through your website. Are you curious about an audit? SiteTuners will review and teach you how to optimize your site with proven UX best practices in about 90 minutes. Take your customer experience to the next level!

  5. Supply Chain Issues

During the pandemic, one of the main challenges for supply chain companies was focusing on production rather than updating technology to predict demand. The supply chain sector has been experiencing relatively constant growth (post-2011), but unfortunately, at unpredictable times like this, specific prediction tools, such as time series models, have proved ineffective. 

E-commerce grew by 50% during the pandemic despite supply chain issues. That means the growth will continue to increase steadily if your company can cope with unexpected events. Building resilience in the supply chain should be your primary focus. Dealing with risks in your supply chain is challenging, but once you identify them, you can rotate your sources or store essential supplies or products.

Develop a varied supplier base. The apparent solution to excessive reliance on a single medium- or high-risk sources, like a business, provider, or area, is to increase the number of references in the regions that are not exposed to the same risks. 

Flexibility in the supply chain is imperative. Traditional supply chain management methods can be more flexible, making the chain adaptable to daily cyclical changes.

Companies with intricate supply chains and production methods must carefully manage the number of their inventories. Keeping a safety stock will provide the best experience for customers and improve your business’s trust.

Conclusion

2020 was an unprecedented year for the growth of many companies due to the pandemic. However, as restrictive measures are lifted, this growth has been affected. This situation is driving many businesses to continue doing their best to continue growing in the future. It is a time when companies must adapt to the circumstances knowing that everything is given to implement the best strategies and expand their e-commerce growth post-pandemic.