By Katie Evans
Source: www.digitalcommerce360.com, April 2020

And merchants are launching promotions and putting investments on hold in a response to the coronavirus.

As consumers remain at home due to the coronavirus pandemic, retailers are moving their stores to the web, according to new data from ecommerce platform provider Shopify Inc.

Shopify says the number of new online stores across the globe on its platform increased 20% week over week for each of the last two weeks of March.

Additionally, from Jan. 1 to March 30, Shopify merchants created more than 27,000 discount codes related to or referencing COVID-19.

Coinciding with the launch of gift cards for all Shopify plans on March 20, the number of merchants selling a gift card online for the first time is at an all-time high. Shopify did not reveal how many merchants are selling gift cards but said the number is higher than it was on Black Friday or Cyber Monday. Merchants selling food, beverage and tobacco-related products are experiencing the most gift card sales, Shopify says.

Sales by category

Food, beverage and tobacco sales grew 14% week over week for the week of March 2 for Shopify merchants. Sales for those merchants continued to grow the week of March 9, increasing 46% week over week and grew another 4% the week of March 16. Sales for Shopify merchants selling apparel and accessories fell 11% week over week for the week of March 9, and another 16% the week of March 16. But for the week of March 23, the category began to pick back up again, growing 21%.

Sales of goods to replace commonly out-of-stock products are also growing, Shopify says. “With supermarkets running low on essentials like toilet paper, we’re seeing a growth in sales for alternative products like attachable bidets in the month of March,” Shopify writes in an email.

Specifically, toilet paper, water filters and baby formula were some of the most popular products, Shopify says.

Also in March, sales of “work-from-home” products such as computer accessories or office equipment, as well as fitness products (workout gear, adjustable dumbbells, resistance bands) and entertainment products (video games, paint sets, play tents) all began to increase, Shopify says. Other popular product categories in March include greeting cards and novelty gifts showing people are looking for special ways to stay connected during this time, whether it be for holidays such as Mother’s Day in the United Kingdom on March 22 or just to spread love and cheer, Shopify says.

Additionally, as of March 30, merchants installing local delivery and in-store pickup apps from the Shopify App Store have increased, with some such apps generating an 800% increase in weekly installs for the last two weeks of March, Shopify reports.

Retail ad spending surges

For the week of March 16, Shopify merchants increased their ad spend to reach levels similar to holiday 2019. “This is likely due to brick-and-mortar merchants moving online and existing online businesses trying to boost sales,” Shopify says.

Other research from consultancy Forrester Research Inc. and logistics vendor Narvar Inc. finds that 30% of retailers have closed stores or reduced their store hours and plan to stay closed for a while, while another 42% have done the same but plan to reopen as soon as possible. The research is based on a survey of 99 of Narvar’s retailer clients conducted from March 17-25.

Ecommerce seems to be a bright retail spot during the coronavirus pandemic. 50% of retailers expect ecommerce to fare somewhat better than the rest of their business during the crisis, and 20% expect it to fare much better.

However, merchants are treading cautiously when it comes to investments. 15% of merchants plan to put all of their capital investments on hold as a result of the crisis, 28% plan to put a few on hold and another 28% are considering pausing investments, according to the Forrester and Narvar study.

The largest percentage of retailers (40%) think retailer and shopper activity will resume as normal in 1-3 months, 35% say 3-6 months and 15% say 6-12 months, the survey finds.

In addition:

  • 23% of retailers plan to hire or shift resources to ecommerce
  • 40% have relaxed return policies
  • 42% are pausing pick up in store and store return availability
  • 28% are experiencing fulfillment delays. 53% of those experiencing delays are notifying shoppers about them via text message or email
  • 28% of retailers have laid off employees
  • About one third (32% of retailers) have experienced challenges in staffing distribution centers due to workers calling in sick or unable to get to work. The same percentage is routing more calls to contact center staff working at home
  • 77% are changing marketing campaigns to reflect current customer sentiment

The consumer perspective

Another survey of 5,000 consumers by consumer intelligence firm Resonate finds that 31% of consumers are extremely concerned about the economic-related consequences of the coronavirus, and 25% are very concerned. Additionally, 17% of shoppers say they plan to increase online shopping by a moderate extent over the next 90 days and 11% plan to increase it by a large extent. 11% plan to increase online grocery shopping by a moderate extent and 9% by a large extent.

12% of shoppers say their reliance on a delivery service such as Amazon in place of shopping in stores will increase by a moderate extent over the next 90 days and 6% say it will increase by a large extent.