Shifting E-Commerce Strategies in Reopening Economies


As economies shift into various stages of reopening, the world of retail is experiencing another wave of change. Stores are reopening, stay-at-home orders are loosening, and many of us are holding our breath to see what happens next.

COVID-19 accelerated the adoption of e-commerce two-to-four years into the future in a very short amount of time, leaving the rest of the retail industry sprinting to catch up. E-commerce penetration in the US has risen from 16% at the end of 2019 to 27% as of the end of April. To put that in perspective, it took nearly a decade for US e-commerce penetration to rise from 5.6% to 16%. That same amount of change just happened in less than half a year.
It’s difficult to say whether or not that growth is here to stay. Even if all of that growth doesn’t stick, e-commerce will now exist alongside brick and mortar in a much more prominent way than it did pre-COVID-19. Shoppers have adopted e-commerce into their daily routines and habits, and many of them will continue to shop online in some capacity.

To meet the shift in consumer behavior, many businesses will need to change the way they approach e-commerce. How those businesses need to change differs depending on the retail sector. COVID-19 didn’t affect each retail sector equally. Between March and April, spending on footwear, apparel, and jewelry dropped more than 50%. Other retail sectors boomed. Vitamins, minerals, and supplements experienced between a 20%-140% sales growth.

Both the booms and busts present separate challenges for brands recovering from COVID-19. Retail sectors that surged will need to focus on becoming more efficient and better aligning traditional and digital retail strategies. Retail sectors that declined will need to focus on better catering to their online audience.


Strategies Must Shift to be Highly Consumer-Centric

Fashion took a significant hit once brick-and-mortar stores closed. Part of that hit came from stay-at-home orders and a general lack of discretionary spending among consumers, but there’s another reason the fashion industry wasn’t prepared for an e-commerce-dominant environment. Fashion — especially luxury fashion — has long focused on creating a perception of value around high-end products. That value hasn’t transitioned well from brick and mortar over to e-commerce, and as a result, brands are missing their audience. Every brand can learn something from that result.

E-commerce is more about just selling a product, it’s about delivering an experience. Amazon understands this better than anyone, which is why so much of the marketplace is centered around making things convenient for shoppers. Fast shipping options, extensive product details, customer reviews, frustration-free packaging — all of these things are designed to deliver the best possible experience for shoppers at every touchpoint, and they work.

Taking a page out of Amazon’s book, brands need to put customers at the center of their strategies to succeed online. When you put the shopper at the center of your retail strategy, your brand becomes “consumer-centric.” Consumer-centric strategies benefit brands in multiple ways:

  • They create a greater sense of value for the consumer. Putting the shopper at the center of the buying process means tailoring everything around what that customer needs. Innovating around the customer’s needs ultimately increases the perceived value of the product to the customer.

  • They create value for the brand. Consumer-centric strategies require brands to put the shopper at the core of their identity and culture. When brands fully align themselves with their audience at the core level, they have a better chance of resonating with their messaging and offerings. Consumer-centric strategies don’t just drive conversions, they drive relationships and create brand advocates.

  • They lower customer acquisition costs. Putting customers at the center of a retail strategy leads to a better understanding of who that customer is — how they shop, what they’re interested in, and so on. Once brands have that understanding, they can better target their audience and cut down on wasted marketing efforts.


Economies of scale are critical

Unless it was baked in from the beginning, brands can sometimes sloppily integrate e-commerce with the rest of their supply chain. Having your e-commerce infrastructure just sort of bolted-on is bound to create all kinds of inefficiencies. It may be easy to overlook inefficiencies when there’s only a small amount of volume, but when volume surges, those small inefficiencies become costly problems. This is where identifying “economies of scale” becomes important.

Brands can take this same concept and find opportunities to apply it within their own systems and processes. Maybe those opportunities are in packaging design, or maybe it’s in warehousing. Whatever the case may be, there are plenty of opportunities to create efficiencies and savings throughout multiple aspects of a supply chain.


Traditional and digital retail strategies need to be fully aligned

Shoppers expect the same experience regardless of the channel they’re shopping on. Because so many new shoppers are adopting e-commerce, there’s a lot more crossover between brick and mortar and e-commerce than there used to be. To deliver the same experience to everyone, brands need to take a look at their traditional retail strategy and align it with their e-commerce strategy.

Marketing, pricing, and data all need to be unified and aligned so customers get a seamless experience across every channel. Aligning these elements also benefits the brand. When e-commerce and brick and mortar work together, brands gain a better understanding of who their customers are, which leads to better targeting, marketing, and customer retention.


Brands should take a hard look at their weaknesses

COVID-19 brought out the strengths and weaknesses of each brand’s retail strategy. If brands had any existing weaknesses in their infrastructure, those weaknesses have been made very clear over the last several months. Even with economies reopening, those weaknesses will need to be assessed and dealt with — the sooner, the better. E-commerce is going to be more prominent than ever in post-COVID retail, and the learning curve only gets steeper from here.