How COVID-19 has Impacted E-commerce
Oct 06 2020
Stuck at home, bored and online shopping? Since the outbreak of the novel coronavirus and mandatory stay-at-home orders affecting millions of Americans, e-commerce has skyrocketed. With retail brick-and-mortar shuttered, many have turned to buying goods online that they would have otherwise bought in stores.
For many, stay-at-home orders began in March, and in April e-commerce grew to 27% of all retail sales, up from 19% at the end of 2019. We’re all guilty of buying more online since the outbreak of COVID-19; we are supporting businesses and keeping the economy moving, after all. However, this increase in e-commerce has caused issues that resonate throughout the supply chain, and ultimately have a negative impact on the environment.
Amazon was not prepared
For the first time in years, Amazon Prime is taking more than two days to deliver products to its customers. Amazon publicly stated that it would prioritize certain goods over others, with some products remaining consistently unavailable while others are garnering high prices as price-gouging third-party sellers flood the platform. The increased demand for goods online has led to shipping constraints and affected supply chains. Employees that are integral to the successful continuation of supply chains, like truck drivers, are feeling immense pressure as their incomes plummet. Lack of financial relief has made many choose to stay home instead, as every time they leave they are putting themselves and their family at risk. If freight drivers stop making deliveries the entire country would buckle, e-commerce is no exception to the economy’s reliance on them.
Sellers on Amazon are having to make adjustments; 22% of third-party retailers on Amazon say they are making changes to their marketplace strategy as a result of the coronavirus pandemic. Those adjustments are different for each merchant; some are sending more products to Amazon to meet demand, while others have shifted sales to their own websites where they have a higher profit margin since they don’t have to pay Amazon extra fees and commission.
Opportunity for small businesses
This change in Amazon’s distribution and fulfillment capabilities has led many consumers to seek products elsewhere. Small businesses are having more opportunities to catch customers that would otherwise shop on sites like Amazon.
Small retail businesses are experiencing higher volumes of web traffic and more visibility due to everyone being home and shopping online. Social media has been a huge advantage, as everyone is online at home, they’re seeing spending more time online. This means seeing more ads and social media posts from small businesses. There has also been a cultural push to support small and local businesses during these difficult times. Many people have no option but to shop online when they have to, or choose to, stay home and quarantine. They may also be struggling to find the products they want in-store as retailers can’t handle the demand.
Small businesses also have the benefit of not necessarily being hampered by stay at home orders. These orders demand that non-essential businesses close. This means that your favorite non-essential company, say cosmetics company, may not be able to go into their warehouse to ship out their orders since they have to close down as they are not deemed an essential business. Many small online companies are run out of homes and are one-person shows rather than large distribution centers that would be subject to stay-at-home orders, this gives them the opportunity to continue shipping out orders.
In-person shopping has lost its allure
The malls and shops that haven’t closed, or are reopening, have done away with the cornerstone of retail shopping: lingering. The safety measures implemented by cities, counties, and states are designed to make the whole shopping experience safe, quick, and efficient.
Gone are the days of testing samples, and looking at products we don’t need, but somehow always buy while waiting in line to pay. Many stores are taking temperatures at the door, or only allowing customers in by appointment only. Others are closing off restrooms and fitting rooms. These alterations take away from the experience of shopping in person, making it downright unenjoyable for some. Many stores are only open for pickup of online orders which further blurs the line between shopping in-store and shopping online, with the main difference being same-day pickup is available for businesses with brick-and-mortar stores.
The experience of shopping in person has been important in separating it from online shopping and keeping customers coming through the door. While these policies are done for the safety of everyone, they also make the switch to online shopping easier and pragmatic for consumers.
More e-commerce = more carbon emissions
At the end of the day, more online shopping means more carbon emissions. All aspects of the e-commerce supply chain contribute to carbon output. From the manufacturing of the product, to excess and non-recyclable packaging, distance traveled, and mode of transportation
Retail stores, especially large chains, benefit from volume and receiving lots of different products at once. This brings down their carbon emissions as it’s more efficient than online ordering which is low-volume. Each order has an individual box, product packaging, and delivery route. The waste and environmental impact of these low-volume orders add up in comparison to the high-volume retail supply chain.
We all want our new products as fast as Amazon has accustomed us to, but at what cost? That overnight delivery is not doing any favors to the environment – it’s time we recognize that and do something about it.
Combat carbon emissions while maintaining business
Becoming a sustainable company is a sure-fire way to combat the carbon output associated with doing business, particularly e-commerce.
This is where EcoCart comes in. Available in the Shopify app store, EcoCart was designed to mitigate the negative impact of e-commerce. It allows for both businesses and consumers to feel confident in their purchase and how it contributes to the state of the environment.
EcoCart works by empowering consumers to make their orders carbon neutral at checkout. The exact amount needed to offset that specific order—from manufacturing to shipping—is calculated, offered to the buyer at checkout, and donated to independently verified carbon offsetting programs if selected. Learn more at ecocart.io, or find EcoCart in the Shopify app store.
Get started on reducing your carbon output today.