Coronavirus and eCommerce: How is COVID-19 Impacting Online Businesses?
This week we will talk about the coronavirus and eCommerce and the effects that the pandemic might have on your e-commerce business.
Coronavirus and eCommerce: How are Businesses Responding?
Obviously, in a situation like this, everybody panics. We’ve just experienced one of the largest drops in the stock market across the board of our lives. While we’re specifically talking about e-commerce now, it relates to other industries as well.
What do you say to those people? What’s the first thing that comes to your mind?
The future is still uncertain. Don’t make any rash decisions. We need to plan out a lot before making any drastic changes. Now is the time to think ahead.
Consider the long run and what’s going to happen if this not only impacts your business but also when it stops doing so? Where is your business going to be then?
Look at the big retailers right now: Amazon, Walmart, and Mayfair. What are they doing? Are they pulling back? No.
Amazon is definitely not pulling back from its operations. If anything, they are looking for more suppliers and products because they understand the opportunity. An economic downturn is terrible, but the most amount of money is made during one.
If your industry is travel, hospitality or event management, you got to get creative. The same applies if your e-commerce supply or store depends on one of these industries that will be hit.
For example, if you’re only selling mirrors to hotels, start looking at other alternatives. Start getting creative. Many e-tailers are not pulling back. If anything, they’re trying to see how do we capitalize on this?
Effects of the Coronavirus (COVID-19) Pandemic Crisis on eCommerce Companies
From a business standpoint, who do you think has an opportunity in an environment like this? If we were talking to these industries, we would say, “You’ve got to pedal to the metal right now. You’ve got to start pushing your marketing, your optimizations, your operations, your supply.”
Any online retailer that sells any type of natural or organic health supplements, cleaning supplies or pet supplies will do well. We’re going to see an increase in online shoppers. People who don’t typically shop online will now be forced to start. People who shop online are going to shop more online because of social distancing and potential quarantines.
First, the ones that obviously have the most opportunity are going to fall into that necessity category. These include pet supplies and immune boosters. If you sell any kind of supplements for the elderly, I think your stuff is going to skyrocket. If you sell any kind of organic sanitizers … and we have a list here, and the list basically is the following.
These are the industries that we think are going to skyrocket. If you are in any of them, you have to really push it now, because people are panicking. Some smart competitors are not going to panic, but most people will.
When that happens, the ad spends and cost-per-click drops. Facebook ad worth suddenly becomes affordable. This is a great opportunity for you to steal market share from those competitors that you wouldn’t have been otherwise been able to catch.
Successful industries also include meal delivery companies, meal prep companies, natural and organic health supplements, immune boosters, organic creams, and any health products Remember, fear is the motivator.
At home exercise hardware and software companies like Mirror or Peloton have also seen spikes in profits. Soul Cycle is now coming out with their own bike, which makes them late in the game.
Any kind of organic hand sanitizer, cleaning supplies and chemicals will sell well. The biggest problem with this industry is that most of the stock comes from China or other Asian countries.
You’re not going to be able to get raw materials but the supply in Latin America is fine for now. If you need raw vinegar or hydrogen peroxide, you’re not going to get it from Asia. Turn to Latin America supplies right away.
With online pet supplies, people are going to buy these in bulk. Soon there will be no cat food, dog treats, or hamster pellets on the shelves. This is what we are predicting.
Creative Online Ideas for Businesses Suffering During Coronavirus
Remote teachers and remote education will increase in usage because schools are going to be stopped. Some companies are offering free subscriptions for children’s education, to give parents a break. Other places like Coursera and Udemy will see an uptick in interest for their formal and informal courses.
With that comes any kind of online streaming service and video games. People are going to attack the TV. You’re going to be stuck in your home, you’re going to have nothing else to do, and then this affects cleaning services.
Let’s talk about some of the creative ideas in these industries. Restaurants are screwed. What are they going to do?
Restaurants are getting creative. The other day I got an email from Perry’s Steakhouse saying, “Hey, get a to-go order. Pick up a to-go order.” They give you a coupon for your first to-go order, to get you to purchase food but not essentially dine-in.
Restaurants will conduct different means of trying to maintain their customer base. The takeout method is one. We’re going to see a lot more of that, as well as delivery. They’ll offer discounts, such as a three-course dinner for one at $49.
Encourage people to take advantage of this, because people are going to keep living. Restaurants will see a hit come from Uber Eats and Postmates because of that third party handling the food. People are going to feel a little bit more comfortable if they’re the ones picking up the food themselves. Restaurants are going to be able to actually make a little bit more money, not having to utilize Uber Eats and Postmates.
Short-Term Strategies for eCommerce Businesses Affected by Coronavirus (COVID-19)
I was just speaking to a friend the other day who runs a cleaning service. If you don’t have employees, there’s no cleaning service. Some of the stuff is going to be affected, and I was suggesting deep disinfections. I would take house disinfections once a week.
Things are not as bad right now as some of the cities in Italy are experiencing, but it might get there. You must see the opportunity and how to be proactive in this kind of environment. Panic is the worst thing for a business unless you’re in one of these industries.
Airlines should panic because nobody’s going to fly. The same goes for buses or event management. If you’re doing any kind of event management or events, you better start looking at options like doing webinars.
Moving online, what can I do? How can I get creative?
Most of the ideas you come up with for visibility will return to digital marketing. Digital marketing and eyeballs are more important than ever for visibility.
Digital marketing and visibility are more important than ever right now in this kind of environment. That’s exactly what we want to portray to people with opportunities, but if you’re in one of these industries that we mentioned — meal delivery, organic health supplements, at-home exercises, online streaming, video game, remote education, remote teachers, online pet supplies, you have a huge opportunity or a huge upside, increases of we already have clients in these industries that have increased with the current setup, maybe 150-160% in sales.
Anything else we didn’t cover?
Some e-commerce businesses may not fall into these categories or would be considered a necessity. Ask would be what would be considered to be luxury. The answer is apparel, toys, and whimsical gadgets.
We’re not seeing an impact on these stores yet. It’s still too early to assess what’s going to happen.
Do not make any rash decisions. You don’t know if this pandemic may blow over in a month or two. Act impulsively and you open door to all of your competitors. Then you may never reach that market share again.
Calm down. Take a deep breath, and talk with your team about the coronavirus outbreak. Settle down.
We run multiple operations. Optimum7 is not our only business. Thus, we assess how profitable each one is and how their performance is during emergencies.
You should always trim the fat every 90 days. Prepare to identify what “fat” is, however, in all of your practices. Marketing brings you revenue and helps you pay the bills. So do your e-commerce investments. These are not fat.
Fat is if you had this person in the office that is not really generating revenue yet. Cut that person because that’s important. If you have gym memberships for everybody in the office, nobody’s going to go to the gym. Cut that fat.
Don’t cut your marketing or technology investments that you have on your business, like e-commerce functionality, unless you go back to last year’s revenue and last year’s numbers. If you open up your analytics, compare the past 30 days to the previous year, and you start seeing that you’re dropping below that line of last year’s revenue, then you should start looking at making serious cuts.
Otherwise, we wouldn’t advise this. Remember that you got to be very strategic about this because we don’t believe that this is going to be a long- term situation, lasting more than nine to ten months.
We’re not medical experts, and in some areas such as Italy, the concern is legitimate. Don’t panic about your business, however. You have to be smart and strategic.
That’s it for this week. If you have any questions, let us know. We’ll talk to you guys next week.
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