How COVID-19 Is Impacting Online Business And What You Can Do
Are you an e-commerce business owner? If so, then you need to read this. As Shopify Partners for e-commerce in Ireland, we have an intimate understanding of Shopify requirements, challenges, and solutions. As COVID-19 continues to impact our world, many online businesses suffer for it.
In this article, we’ll explore how shopping behaviour has changed in the past few months, who’s impacted, and how to protect your business.
THE CURRENT SITUATION
Our interconnected world has changed dramatically in the past two months. We went from under-appreciating the freedom of being able to stroll out our front doors whenever the mood struck us, to spending uncountable moments gazing out the window yearning to go anywhere.
Everyone has to be flexible, and everyone has to adapt. But for online business, major adjustments - and in some cases complete overhauls - are the only way to survive.
ONLINE SHOPPING BEHAVIOUR
People who didn’t buy online before are now. They’re also buying in bulk because they’re afraid of scarcity. Our collective natural instinct has been to over-prepare, especially in light of conflicting information from various media sources. When the crisis first erupted, many nations made swift moves to stock-pile essentials items, which inspired a domino effect on the rest of the world and resulted in a collective agenda to panic-buy and hoard.
We all experienced that fear to some degree, and it likely influenced our buying decisions whether or not we realise it. While you may not have experienced the classic signs of panic in the buying moment, chances are your subconscious consumer wheels were turning.
According to Paul Marsden, a consumer psychologist at the University of Arts London, our three psychological needs underride panic buying:
Autonomy (the need to have a sense of control over our lives)
Competence (the need to feel capable of making the right buying choices)
Relatedness (the need to sustain a connection with important people in our lives).
None of those psychological dispositions seem to signal anxiety but rather a desire to maintain a sense of power over our lives.
The global lockdown is beginning to lighten as many countries adopt a staged approach to opening up, but we’re still reeling. Our sense of safety and security has been threatened in a way that’s impossible to forget, and it continues to influence our buying decisions.
But because we’re capable of adapting to nearly any situation we’re confronted with, fear has morphed into boredom in a matter of weeks. We’ve shifted from the panic-buying phase to the boredom-buying phase of this COVID-19 pandemic. The “new normal” world is frightening both in its contrast to 2019 and in its familiarity after only a few months.
Since the onset of the pandemic, we haven’t just changed how we’re buying, we’ve also changed what we’re buying. That’s creating either a crisis or welcome boost for online retailers.
Perhaps one of the most striking observations in this strange new world is the contrast in consequences for businesses and individuals alike. Depending on what you do professionally or in business, the COVID crisis has either sucker-punched you in the face or generously rewarded you. And it’s completely random in the sense that no one could have predicted this (other than Bill Gates perhaps).
A report by former tech investment banker Mary Meeker explains the impact of the coronavirus on economic activity, technology, and buying behaviour:
Companies in the most favourable position use cloud technologies, sell essential products, have a strong online and social media presence, and increase the efficiency of other businesses.
Who are they? Restaurants, online education, software companies, and health care providers.
Transport and travel companies like Uber and Airbnb have been hit hard, whereas grocery delivery services and telehealth agencies are booming.
The reality is that most of us are feeling the strain, especially small business and e-commerce owners. We don’t have to sit back and wait for this all to be over but that doesn’t mean we can just continue on, business-as-usual. It’s more about meeting at that in-between point where normalcy and chaos meet and hanging out there for a little while.
Let’s look at some actionable ways to keep your online business up to scratch.
HOW TO PROTECT YOUR BUSINESS
In our current context, protecting your business is synonymous with adapting business. As a Shopify marketing agency, we know that change has always been the one certainty in life, and that’s even more relevant now.
As an online business, the ability to adapt is easier than for in-store retail venues. That said, you may have to take a couple of financial blows to keep your customers buying from you.
Give Your Customers The Power To Choose
Based on what we know about the basic psychological mechanisms behind buying, we recommend giving customers a choice whenever possible. Putting your customers in charge of their buying experience fosters a sense of buying agency and competence. It also instills trust in your brand.
Here are a few ways to help people get what they need and keep you in business:
Increase Cash Flow
- Bundle your goods. People love themed bundles, they’re like gift baskets they can give to themselves, and it makes them feel like they’re getting a deal (they are). It also supports the psychological need of competence.
- If you’re a Shopify store owner, create a digital gift card. Click here to learn how.
- Shopify recommends performing an ABC inventory analysis to categorise stock. Heavily discounting, bundling, or selling off C-stock, the low-value products, to liquidation retailers can inject some cash flow into your business.
- Offer limited-time free shipping. It can influence customers to buy from you versus the competition. It also supports the psychological need of autonomy.
- Offer discounts with codes that show support and solidarity. It also supports the psychological need of relatedness.
Adapt Your Marketing Strategy
- Adapt your social communication. Now is a critical time to switch up the usual focus on you and acknowledge the current culture more consciously. Not every social post has to encourage people to buy.
- Create affiliate relationships to attract new customers
- Extend your return and exchange policy.
Create a Culture of Care
- Initiate some local partnerships with community charities, and offer customers the choice to make percentage-based donations. This strategy also supports the psychological needs of autonomy and relatedness.
- Show care for the community. Buyers are always happy to see that the brand they love has a heart. Thunderpants of NZ created an thoughtful initiative to show support, engage their community, and spread their brand:
HANG IN THERE
Sometimes, we just need words of encouragement. That’s part of creating the culture of care we mention above. Things are improving, even though business may take some time to catch up. Putting forth your best efforts now will go a long way to keeping your business breathing, and hopefully, thriving.
If your online business is powered by Shopify or any other e-commerce platform, we can help. A free consultation with Shopify Partners might be all you need to implement a few strategies. A simple reframing of your marketing approach is always useful, whether or not the world is caught in crisis. Schedule a free call to determine the best way forward for your business.
May 26, 2020