BENEFITS OF ONLINE TRADE
E-commerce is providing a silver lining amid the dark pandemic – Sanjeewaka Kulathunga
The COVID-19 pandemic has drastically limited the economic activities of consumers, retailers and companies, and many other stakeholders in the world of commerce. Traditional business models are being challenged and replaced by companies that have a strong presence in e-commerce.
These retailers have been able to keep their eyes on new market opportunities emerging from the massive change in supply and demand patterns around the globe.
Accordingly, contemporary health challenges due to the global pandemic have motivated retail businesses to reassess their operational networks and act swiftly to manage costs with novel sources of revenue.
Traditional bricks and mortar stores have had to close their doors because of lower customer patronage and inventory turnover. Though this health hazard has floored some retailers with questions about their economic survival, a considerable number have been able to shift their focus to electronic business models and generate online sales.
Increased demand by consumers whose willingness to spend online while staying at home during the pandemic has benefitted e-commerce enormously.
In the US, average daily online sales for groceries had doubled by mid-March compared to the beginning of the month. E-commerce is gaining retail market share because the pandemic, which has led to the closure of bricks and mortar retail companies, is pushing customers to purchase their goods online.
The overall performance of electronic businesses will enhance the performance of the retail economy.
Whether it’s bricks and mortar, or bricks and clicks companies, they will all have to rely on online orders and offline distribution to assist service delivery. However, limited logistics and distribution capabilities have seriously impacted the free flow of goods and services, and caused bottlenecks for these companies.
Further, an acute shortage of employees for delivery services is another challenge that regular retail companies are facing as they seek to expand their online sales.
During this challenging period, electronic retailers should focus on their capacity to deliver goods, logistics and timely delivery. In this scenario, online retailers are urged to evaluate their current business conditions to develop and execute effective logistic strategies.
It’s important to plan warehousing and logistics in the context of consumer needs, based on their requirements for different goods and services.
Collaboration with third party logistics providers should be explored to approach consumers efficiently.
Diversification of marketing scenarios will be helpful for a business to accelerate its digital transformation with upgraded online features and amenities. The incessant growth of online access has been showcased by livestream platforms such as YouTube, Facebook and so on during the COVID-19 outbreak.
This situation has also caught the attention of many international and local brands.
Due to the home quarantine stipulations in these times, consumers worldwide are inclined to opt for home delivery services – and the demand for such services will continue to thrive in the future.
Drone deliveries operated by AI will be a viable option for retail companies that seek to minimise person-to-person contact in the event of similar global pandemics in the future.
The digital transformation of business will remain a top priority for the survival and growth of retail companies in the near future. Companies with a solid digital foundation and strong supply chain management capable of addressing weak points in the retail value chain – from information to capital flow – are more likely to survive and grow during this crisis.
Indeed, the COVID-19 pandemic has been pressing retail companies to embrace and accelerate their digital transformation to reach consumers in a reliable manner.
Further, online businesses should be ethically responsible and pursue conservative business strategies for the benefit of consumers, by striking a balance between people, profit and planet. Corporate leaders of online companies should ensure that there’s adequate cash flow to handle such crises as well as focus on establishing consumer confidence in their brands.
This is a great opportunity for various electronic business platforms that operate around the world to redefine and rebuild their customer relations by interacting with them at a deeper level through innovative digital approaches.
Online businesses that are more agile – and willing to adapt, embrace and develop robust digitisation, and supply chain management strategies – will gain a competitive advantage in the retail value chain during any future events such as the coronavirus pandemic.