The novel coronavirus has taken a toll over the global economy affecting all industries and sectors, be it travel and tourism, finance, or construction. At times like this, when the global economy is on a downfall, one industry that stayed afloat is the e-commerce industry. It would be safe to say that e-commerce is the only industry that has seen notable growth in the horrid times of a pandemic.

With consumers avoiding to step out to shop, the only way out is to resort to digital retail. Traffic on retail e-commerce websites has soared and has undergone a 6% increase between January and March 2020 as the global pandemic has prohibited people to step out.

The USA, like the rest of the world, has also witnessed an increase in traffic of online shoppers since people are staying indoors.

Online retail sales have multiplied this year, particularly for grocery shopping and other essential household items like toilet paper and other hygiene products.

With this article, we want to highlight some changes that e-commerce giants in the US brought about in order to address the changing times by either selling groceries or by evolving their business practices. We will also talk about businesses previously selling offline and how they adapted to these challenging times for survival.
This is not a comprehensive list but we have tried to jot down some popular brands and their revised business models.

Retail Giants

Two retail giants that have managed to effectively run their businesses worldwide are Amazon and Walmart. Being a primal e-commerce giant, Amazon has made changes to its business practices to adapt to the situation. Walmart, on the other hand, made changes to its business model to survive this pandemic.

Amazon

Let’s dive deep into one of the most popular e-commerce giants - Amazon. In the United States, almost 4.06 billion visitors shopped on Amazon as of March 2020. Amazon had to temporarily limit its delivery to essential commodities in some regions as a result of hoarding and panic buy by customers. As the e-commerce giant is catering to half of US’s online sales, a temporary delay in services would reflect poorly on the customer experience front. In order to curb this problem, the giant hired 175000 workers.

Recent study on Amazon suggests, “Though sales spiked in the quarter, rising by 26% to $75.5 billion, operating income fell from $4.4 billion to $4 billion due to additional investments, including higher wages, to accommodate the surge in demand. The company also said it would spend $4 billion in incremental costs related to COVID-19 in the current quarter, essentially wiping out all of the $4 billion in operating profits it would have otherwise expected.”

Amazon is not pocketing the windfall gains from the increased sales revenue but is using it to eliminate the risks which are likely to arise due to the pandemic. They have procured masks, thermometers, and thermal cameras in huge amounts to prevent the spread of the virus in their warehouses and Whole Foods stores. Amazon has also created a lab to test their frontline employees.

Running a successful business while also abiding by the health norms, Amazon is heading in the right direction.

• The giant has prioritized the sale of essential commodities
• It has taken steps to avoid price-gouging on the website
• It is aggressively expanding its grocery delivery capacity
• To increase the retention further, Amazon has revamped incentives for its Prime Loyalty Program customers.

Walmart

Walmart’s e-commerce sales have soared during the Covid-19 and speeding up their delivery process has taken precedence over everything else. Their express delivery option, which gives consumers the benefit of getting their delivery within two hours from placing the order, is now available at 1000+ stores. Walmart aims to double this number by June end. Furthermore, the firm's ship-from-store program has ramped up to 2500 stores.

While Amazon was already an e-commerce giant in the US, Walmart has made necessary changes in its business to survive the pandemic and emerge as another giant!

Furniture and Home Decor

Prominent furniture and home decor businesses in the US have also changed their business models to adapt to the current scenario.

As the pandemic has forced people to stay indoors, employees are now required to work-from-home. Therefore, they require office setups at their home.

In order of their popularity, Home Depot and Ikea have been quick on the uptake to provide consumers with products for both utilitarian and pleasure purposes.

Home Depot

Home Depot is not only taking online orders but has also kept its stores open. Home Depot is renowned for keeping its stores open irrespective of a crisis.

However, as the situation demanded they have made necessary changes in their working style.

The stores are now closing early to allow more time for restocking and sanitization. They are now allowing limited customers at the stores at a time. Home Depot has expanded delivery options as well on the orders placed via their website. Additionally, they have extended the return policy from 90 days to 180 days while also encouraging the customers to avoid returning the product. The brand also has limited services and maintenance to only essential issues.

Ikea

Ikea is continuing to offer online shopping with home delivery in select locations. The stores are closed for public shopping but are operational so that online orders and online delivery pickups can be managed.

Logistics Sector

As consumers are avoiding crowds, offline sales at supermarkets have been gravely affected. Tackling this situation required the retailers to get creative and hence, they have come with B-O-P-I-S aka “Buy-online-pick-up-in-store”. Needless to mention, the home delivery option always remains in the picture.

B-O-P-I-S or curbside pickup services are offered by Apple, HomeDepot, Kmart, Kohl’s, PetSmart, Lowe’s, etc.  National food and beverage chains like McDonald’s and Subway are encouraging customers to eat indoors by offering free home delivery.  Therefore, there has been an increase in downloads of apps like Instacart and DoorDash.

Instacart

Instacart offers its services via its website and mobile app. The company has seen a 218% increase in app downloads . Instacart has rolled out a new service “Leave at my Door Delivery”, allowing shoppers to receive grocery deliveries without being present, and has increased the app’s popularity. Instacart has partnered with local, specialty stores, pharmacies and membership only stores like Costco, BJ’s Wholesale, and Sam’s Club. The company has also partnered with major American retailers like Food Lion, Kroger, and Wegman, to name a few.  

During the pandemic, Instacart has come up with two new features- Fast & Flexible and Extended Order Ahead.

Fast & Flexible has increased the speed of delivery and the availability of products to the customer. Fast & Flexible feature matches the customer order with real-time shopper availability so that more orders are delivered in a short span of time. Order Ahead allows customers to now place their orders for two weeks in advance. This feature initially allowed customers to add products for one week in advance.

To ensure customer safety, Instacart is offering contactless delivery.

Instacart is particularly more famous in Boston, New York, Yonkers, San Francisco, Washington, and Chicago to name a few cities.

DoorDash

DoorDash is an on demand logistics based company that offers food delivery from restaurants to people’s doorsteps.

The company has adapted itself to the current scenario. Like Instacart, DoorDash is providing contactless delivery options as well.

Here’s how it works:

• The customer checks-out from the DoorDash website or app.
• They see “Leave it at my door” as the default option.
• They can fill in extra additional instructions (like apartment number and a photo of where the food should be delivered) so that the delivery is done to the right personnel.
• The food gets delivered with no contact whatsoever.

As their demand has increased, DoorDash is hiring restaurant workers as Dashers (delivery personnel) to keep up with the demand.

Under their Project DASH Initiative, they have partnered with the local government agencies and non-government organisations to provide food and other essential supplies to local communities.

It has gained more popularity in Phoenix, Houston, Charlotte, Portland, Austin, San Jose, Jacksonville, and Raleigh.

Sportswear brands

As sportswear and athletic apparel does not fall under the essential items category, their sales have been largely hit during this pandemic. Two MNCs that successfully adapted to the prevailing situation and grew during the pandemic are Nike and Lululemon.

Nike

If not the only company, Nike can be said to be at least one of the few companies which have beaten its sales estimates during Covid-19, even though its products do not fall under the “essential commodities” category. Nike’s CEO, John Donahoe says that  “at a time when people were confined to their homes, we moved swiftly to leverage our digital app ecosystem and Nike Expert Trainer network.”.  The remarkable engagement in these fitness classes has translated into an increase in the downloads of its apps.

Even though the corporation reported a loss in quarter 4, Nike’s digital sales increased by 75% by the end of the fourth quarter. Its e-commerce app has been downloaded over 8 million times since then. There has been a continuous upward trend in Nike’s digital sales, even after the retail stores were opened. Mr. Donahoe is hence committed to making e-commerce sales generate 50% of Nike’s total sales revenue “in the foreseeable future”.

Lululemon

Lululemon is an athletic apparel retailer. Its management remains confident in the long-term opportunities that the future holds for them, even during this time of crisis. Lululemon is positioned to survive this pandemic and continue to grow in the long run as the giant has a very strong balance sheet, and has shifted its financial resources to grow its e-commerce channel.

The company has been continually working on expanding its digital presence. With a broader e-commerce investment numbers, it’s using its series of stores as ship-from-store locations to fulfill e-commerce orders.

CEO Calvin McDonald has said that "Over the last several years, we have made significant investments in our supply chain and distribution network," and added, "I'm confident that we'll be able to further leverage these investments to help us navigate through the current situation."

Even though digital sales can not fully offset the loss of offline sales, Lululemon's digital business has picked up in a short span of time.

Like Nike, Lululemon has also started connecting with people by offering online fitness and training classes. During the first week of the temporary closing of the stores in the USA, approximately 170,000 customers joined Lululemon for its live classes.

Another major advantage for Lululemon is that its product line does not go out of style. They can sell it throughout the year without having to worry about offering steep discounts on the inventory in this crisis.

Food and Beverage

The food and beverage industry has taken a major fall, courtesy of the situation at hand. The out-of-house consumption has significantly reduced, thereby reducing the profit margins. One snack giant, however, went creative during the crisis and turned it around.

PepsiCo

PepsiCo has dominated the snacks market for decades. The company has many rivals but none of them could have bothered them as much as this pandemic did. In order to stay strong in the market, they decided to up their digital game. The snack giant has launched two online B2C websites: Snacks.com and PantryShop.com, which sells a wide assortment of PepsiCo’s food and beverages products.

On Snacks.com, consumers can purchase a variety of Frito-Lay products like Lay's, Tostitos, Cheetos, and Ruffles. PepsiCo has also added other items like dips, crackers, and nuts and will continue to add new items as per consumer preference. To encourage customers to buy from Snacks.com, they have also come up with an introductory offer, where shoppers can avail free shipping services with a purchase of $15 or more.

On PantryShop.com, consumers are given an opportunity to order a specialized bundle that contains PepsiCo's top-selling, pantry favorites from brands such as Quaker, Gatorade, SunChips, and Tropicana, within categories such as "Rise & Shine," "Snacking," and "Workout & Recovery." Before launching these pantry kits, PepsiCo undertook thorough research and designed the kits while taking into consideration consumers' needs during the lockdown such as work-from-home, exercising, and homeschooling.

Other businesses

Several other businesses are also working around their business models to adapt to the present situation. These small businesses are getting creative with their strategies to hold on to customers. Let’s take a look at some of them.

Sweet Farm, a California based animal sanctuary that previously used to bring in huge amounts of its funding through in-person visits, temporarily faced problems as their funds dried up due to pandemic. Eventually, the sanctuary came up with the idea of Goat-2-Meeting, a service where companies can pay to have a llama, goat or any other farm animal to make an appearance in their virtual meeting, to make it less monotonous. As eerie as it may sound, the company has been able to raise funds through this.

Camp, a new toy chain business has successfully set itself apart from other online retailers by doubling down on Camp's physical experience, hosting virtual birthday parties, and by creating curated gift boxes.

Politics and Prose, a popular Washington bookstore, when forced to temporarily close its store started to stream author talks online and offer a curbside pickup service. This way, they have managed to stay in business.

Similarly, {pages} bookstore run by business partners Linda McLoughlin and Patty Gibson, have started sending out email newsletters to their customers of the Los Angeles area bookstore, to inform them that books, puzzles, and gift cards can still be ordered online from their website . They also offer curbside pickups for books daily from 10 a.m. to 2 p.m.

Another interesting story is of a masala chai cafe, named Kolkata Chai- a food and beverage spot in New York.

Just like other shop owners, they too were forced to shut their outlet. The foundation of their business relied on the wholesome customer experience of enjoying the authentic taste of the South Asian drink at the outlet. The situation demanded a revival in the business strategies and they did exactly that.  Since delivery services were not accepting new vendors, the Sanyal brothers decided to create their own delivery infrastructure. Now, Kolkata Chai delivers on door-step chai and other store delicacies like samosas and Indian biscuits.

Kolkata Chai's weekly revenue increased during the pandemic due to online orders and gift-card purchases. Ani and Ayal also plan to offer a DIY Chai Kit, allowing customers to make their authentic Indian chai at home.  

Wight Tea Co. operated as a wholesale tea seller since 2016.  Due to the pandemic, Weight Tea Co didn’t only lose a majority of its wholesale orders but also couldn’t open their WhiteHall Market-based new stall in Baltimore. How did they manage? They shifted their focus towards online selling. Since the temporary shut down of the stalls, they have been investing in detailing their official website. The consistent online orders have helped them stay afloat and maintain their sales numbers.

Mobtown Fermentation was founded as a juice shop in  2015 and is one of the most successful businesses in Baltimore. Before the Covid-19 pandemic, Mobtown had $1 million in investments to offer their product in all WeWorks offices.  When all the cafes and Mobtown’s restaurant partners were closed, the company shifted its entire focus on grocery customers and home delivery services. The company was able to generate decent revenue and cash flow. They reportedly have “a lot of exciting contracts in the works”.

Conclusion

There is no denying the fact that post this pandemic, the short-term behavior the consumers have adopted will become permanent. This implies, having a digital presence and selling online is inevitable for any business, big or small in the future. Simply put, e-commerce is the future and the consumer behaviors have already changed according to the new reality.

The businesses mentioned above have survived or even grown during these unprecedented times because they adapted themselves with the current situation and changed their business models accordingly.

To further prove the point that e-commerce is the future, let’s rewind to the 2003 SARS epidemic in China. The epidemic infected more than 8000 people and approximately 800 people died. Social distancing was followed back then as well by taking precautionary measures like closing down schools, factories and shops. This led to an increase in digital shopping. Two e-commerce businesses Alibaba and JD.com steered their way to generating huge revenues by capturing the opportunity.

Although e-commerce is all the rage on a global scale. We still need to address a glitch in the domain that might be a road blocker now or in the near future. While retailers have figured out alternatives to offline selling, inventory management still remains an issue for many.  The global supply chains have never seen this much agitation since the second world war. The transportation systems have been strained, adding more to the gravity of the crisis. The entire supply chain management has been disrupted. However, balancing order demands and inventory needs can be managed with smart planning.

As per  J.E Hicks Distribution Company and Big M Supply, managing the inventory during the pandemic proved to be a major adjustment issue. This is attributed to bulk-buying over the widespread panic. However, they have managed to get through the situation effectively over time. While getting creative with marketing strategies is one way to go about it, handling situations at the inventory level is another smart option. There are a lot of feasible options available to handle the inventory right.

EasyEcom is one such option. We offer a complete ERP solution for every business model. When inventory management is dealt with, sellers can focus on optimizing their sales numbers.

PS- If there is another brand you know of that has successfully pivoted to a business model more suited to the times of the pandemic, please feel free to get in touch. Also, if you are a business owner and you were able to find a way through in these tough times, it would be a delight to learn about you.

Are you looking for an omnichannel inventory management solution with integrated B2B order management for your eCommerce business? Drop us a line at care@easyecom.io or directly sign up for a demo here.