The Impact of COVID-19 on E-Commerce

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Blue Crane Marketing
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Let’s take a look at the broad impacts of COVID on some of the most adversely impacted industries, consumer behavior and intent, ecommerce.

The COVID-19 crisis has forced almost every individual, government, business, educational institution, and beyond to rethink how things get done in their day-to-day activities and their long-term growth strategies. These developments show that having a digital presence is not only important but imperative to surviving the “new normal” that all companies will have to come to terms with to stay solvent.  In this article, we are going to take a quick look at the broad impacts of COVID on some of the most adversely impacted industries, consumer behavior & intent, e-commerce.

Early in March, the restaurant industry saw a sharp decline in YoY revenue. At the height of the pandemic, restaurants saw a 75% year-on-year drop in revenue, due to restrictions on regular (dine-in) operations. Even now the industry is struggling to regain some sense of normalcy. Many restaurants adopted curbside pickup and/or outdoor dining to continue operations, however, the impact on smaller establishments that don’t have the resources to offer outdoor dining or consistent delivery is yet to be determined.



Retailers (excluding those providing essential products and services) and health & fitness companies are experiencing a pinch (for some a wake-up call), calling for a push to bring more of their operations online or face being out-competed by their counterparts. JC Penny filed for Chapter 11 bankruptcy in May and has announced the closure of over 150 stores across 37 states (over 30% of its operating capacity). 24 Hour Fitness filed for Chapter 11 bankruptcy on Jun 15th of this year. It has also permanently closed 138 gym locations across 14 states, which accounts for almost 30% of their total gym locations nationwide before closure.

These examples constitute only a small portion of companies that have had to restructure their business as a result of the coronavirus impact. Many of the retail companies that filed for Chapter 11 primarily sold products via brick and mortar stores. Needless to say, all businesses across the spectrum have had to adapt their business models as a direct result of the cascading disruption COVID has brought on. Companies that are able to remain nimble in spite of this disruption stand reap the rewards of changing market dynamics.

Looking Ahead

During the same time period, Amazon’s International business segment experienced a Q2 2020 operating profit of $345 million, that’s about a 160% increase from the previous year’s operating loss of over $600 million. Amazon’s International business segment has been unprofitable for the past 3 years, but suddenly it has experienced a breakout success moment amid this crisis.  This tells us that consumers worldwide are making more of their purchasing decisions online than ever before.

By the same token, a 5-year Google Trends analysis on “Online Shopping” shows us that web user interest regarding the topic peaked in early April 2020, and although it has declined, it remains at a higher level than the last year’s peak. (Note: Interest in Online Shopping is particularly high in the Northeast region of the US.)

Consumer Behavior

According to a recent McKinsey survey, consumer behavior in the U.S. will radically change post-COVID-19. Here are a few key takeaways from the survey regarding developments during the pandemic and expected changes in consumer behavior:

  • Online shopping volume 30%
  • 45-65% of consumers intend to continue using “Contactless Services”
  • Over 75% of consumers have experimented with new:
    • Brands
    • Shopping methods
    • Store locations

McKinsey & Company. (2020). ‘McKinsey Survey: US consumer sentiment during the coronavirus crisis’ [online]. [SlideShare]. Available at: URL. (Accessed: 14 September 2020)

The survey also identified that over 70% of Americans expect the COVID-19 pandemic to continue for at least another 4 months.

Consumers are becoming more receptive to trying new brands and making more purchasing decisions online, and this trend will only continue.  These developments show that having a digital presence is not only important but imperative to surviving the “new normal”.

Companies with a user-friendly website with interactive features, sound content & social strategy, and targeted pay-per-click advertising campaigns are poised for success in the “new normal” times.  Given the financial setbacks that many businesses are facing, investing in paid advertising may be difficult, however, strong website UI/UX comes as a priority. We predict that digital marketing activities will become a larger part of firms’ overall marketing budgets across industries.

State of Ecommerce

Our own data analytics and reporting research confirm that e-commerce is growing and will continue to grow. Interestingly, although Q2 2020 total retail sales decreased by 3.4% compared to the same period last year, Q2 2020 ecommerce sales skyrocketed by over 44% YoY and surpassed $200 billion in quarterly sales for the first time (based on unadjusted data from the US Census Bureau) despite all the turmoil at the height of COVID.


Based on the 20-year trend of Total Retail Sales to Ecommerce Sales, we see that total sales have fluctuated, but e-commerce sales are steadily rising in terms of the total dollar amount (see E-commerce Sales Q2 2020 vs 2019 pie chart) and as a proportion of total sales. Based on the changes in consumer behavior during the coronavirus pandemic as well as the general economic outlook of select industries, it wouldn’t be wrong to conclude that the pandemic has accelerated the wider adoption of online shopping by at least a few years.

Although there are positives to the situation the fact remains that we aren’t out of the dark yet with the economy at a standstill, increasing job insecurity, record numbers of people collecting unemployment benefits (which many have exhausted), and additional aid being questionable. Given these facts, we forecast a drop in consumer spending in the short term if economic conditions don’t improve during Q3 & Q4 of 2020.