The Digital Metamorphosis: How Coronavirus Is Reshaping Commerce

Jun 16 2020 | PayPal Editorial Staff

Digital transformation has arrived. What does it all mean for your organization? Learn how you can leverage the biggest trends in the post-coronavirus ecommerce landscape.
If necessity is the mother of invention, coronavirus is undoubtedly the mother of digital transformation. Gone are the holdouts. Late adopters, on both the consumer side and the business side, are racing to join the connected economy. There's no other choice. 

What does it all mean for your organization? Let’s dig into some of the biggest trends in the post-coronavirus ecommerce landscape. 

Accelerated digital commerce investment

Forty-three percent of U.S. consumers are planning to do more shopping online due to the coronavirus1 – and that means they must quickly adapt to new technologies. Enterprises will need to ramp up digital commerce investment to meet these rapidly changing expectations. 

Virtual communication is here to stay. More than 16 million people have started working remotely since mid-March.2 Zoom has record user numbers as friends and families connect for virtual happy hours and birthday parties. Livestream music events attract millions of viewers. The trend is clear: Consumers are creating digital habits that will last well beyond the current climate.  

More consumers may catch up with the trends. Older adults are attending virtual doctor’s appointments, video chatting with the grandkids, and ordering groceries online. 13% of baby boomers say they’ll order food delivery more often in the current climate3 – and they’ll likely use an app to do it. As digital technologies become more embedded in culture, new markets could open up in unexpected demographics. 

More opportunities for challenger brands

People aren’t just shopping online more – they’re giving new brands a chance: 43% of U.S. consumers will now consider purchasing from brands they’re less familiar with.4 This is a huge opportunity for challenger brands willing to step up their game. 

Smaller businesses could increase market share. As large grocers in the U.K. became overwhelmed with increased online demand, consumers turned to lesser-known brands like Big Barn and curated food services like Farmdrop. Smaller retailers that are prepared for unexpected demand will have a head start. 

Direct-to-consumer will thrive. As communication becomes vital, customers are engaging directly with their favorite brands. Businesses will need to open new channels over social media to build relationships and ensure their direct-to-consumer experience is seamless and secure. 

Race to innovate new buying experiences 

A fast, smooth online ordering process is only half the battle in the post-coronavirus era. To truly differentiate themselves from the competition, enterprises must create the buying experiences consumers want. 

New verticals will leverage curbside pickup. Grocery stores are capturing demand with curbside pickup, but they’re not the only ones who can utilize this experience. BOPUS (buy online, pick up in store) has been on the rise for years, driven – perhaps surprisingly – by Gen Z. Now, it definitely isn’t going anywhere. 

Subscription services could get a boost. From toilet paper to meal kits, consumers are realizing the convenience of subscriptions: 18% of U.S. consumers now say they’ll sign up for a subscription service.5 Savvy enterprises with the right tools can set themselves up for success using this model. 

Increasingly streamlined business operations

Consumers aren’t the only ones adjusting to the post-coronavirus reality. Social distancing, supply chain interruption, and volatile markets will make a lasting impression on enterprises’ operations.   

Processes that don’t involve staff will rise in popularity. We’re living in a 6-foot-distance world, and many consumers are hoping to eliminate human contact altogether: 87% of shoppers currently prefer stores with self-service options,6 and contactless payments such as QR codes are becoming more popular.7 These trends are likely to last, meaning we’ll see effects on in-store payments as well as online. 

Cross-border commerce will become essential. While the current situation is global, some areas are more affected than others. Businesses are realizing the importance of diversifying their portfolios and expanding to new regions in case a single market is heavily impacted. And those who already operate internationally are beginning to see how restricted they are by manual processes and inefficient legacy systems. 

Accelerated adoption of real-time payments

Instant payments were already on the rise: In 2019, nearly 52% of consumers said they want to receive government or business disbursements instantly, up from 32% just a year before.8 Now more than ever, consumers and businesses alike need their money immediately – but they don’t want to go to a physical bank location to cash a check. This will drive several trends. 

Consumers will ask for instant payments. In an uncertain economy, receiving payment instantly can be the difference in making rent or paying bills. We’ll see more use of P2P apps like Venmo. And industries that lag behind in real-time payment adoption, like insurance and government, will feel more pressure from consumers. 

Late adopters will come to the table. Real-time payments don’t just benefit consumers. They can decrease uncertainty and improve cash flow for organizations. Governments, insurance companies, and healthcare providers are beginning to understand the benefits of improved cash flow, seamless payouts, and a better customer experience. 

Non-profits will realize the benefits. Non-profits on the front lines also stand to benefit. 25% of donors planned to increase giving in the face of the pandemic.9 Healthcare institutions and other organizations are quickly realizing the advantages of payments that they can instantly put toward much-needed supplies. 

Increased focus on reliable, flexible vendor partnerships 

The current climate will have long-lasting impacts on what businesses look for in partnerships, and how they assess vendors and suppliers going forward. 

Digital-native vendors will have the advantage. Enterprises are likely to learn many lessons from this pandemic, and chief among them will be the need for vendors that fare well in crisis and can work remotely. They will look for vendors that ensure their tech is backed-up and hardened to reduce risks and improve adaptability, and they will increase focus on nimble supply chains built around partners with efficient, adaptable tools and strategies. 

Enterprises will see the need for flexible solutions. It isn’t just toilet paper – some of the top growth in ecommerce may surprise you: refrigerators, hair coloring, ping pong, and chocolate, just to name a few. Companies that were prepared with scalable, agile solutions have been able to reap the benefits, while others haven’t been able to keep up with demand. On the flip side, organizations that are struggling are realizing the benefits of agile platforms that allow them to easily pivot and enter new markets. 

The many ripple effects of the coronavirus on the ecommerce landscape are still unfolding. Enterprises need a partner that can help them adapt, scale, and capture new markets as they arise – or help them pivot, diversify, and find efficiencies to weather the storm. PayPal has the tools and expertise they may need. Learn more about quick changes PayPal Enterprises are able to make to help position themselves for future success. 

 

 
The content of this article is provided for informational purposes only. You should always obtain independent business, tax, financial, and legal advice before making any business decision.

Sources:

1 COVID-19: Consumer Trends by Generation & Geography, Yotpo, March 2020. 
2 Remote Work in the Age of Covid-19, Slack, April 2020. 
3–5 COVID-19: Consumer Trends by Generation & Geography, Yotpo, March 2020. 
6 Shoppers Prefer Touchless or Robust Self-Checkout Options, Business Wire, April 2020. 
7 Impact of COVID-19 on Contactless Payments, The Futurist Group, March 2020. 
8 Disbursement Satisfaction Report, PYMNTS, October 2019. 
9 COVID-19 and Philanthropy, Fidelity Charitable, March 2020. 

Was this content helpful?

We’ll use cookies to improve and customize your experience if you continue to browse. Is it OK if we also use cookies to show you personalized ads? Learn more and manage your cookies