New research from 2Checkout reveals COVID-19’s negative impact on more than 60% of online businesses but also points to ways companies are responding positively and highlights several sectors that actually grew their sales in the past several months.
Biggest business challenge is sales
The biggest business challenge is sales during the pandemic for online sellers. 60% of businesses expect a significant negative (32%) or critical impact (28%) on sales as the pandemic continues, while 21% anticipate a limited impact on their business and 8% do not foresee any impact.
An estimated 12% of companies actually see a positive impact on their business during the pandemic, mostly by companies involved in the sale of essential products and services such as medical, groceries, home improvement, and online streaming services.
Demand for digital goods showed an overall increase of 15% beginning in March and into May including multimedia tools (+40%), collaboration software (+22%), and end-point security products (+15%).
18% say it is more difficult to find and close new sales during the pandemic and another 17% are struggling with stagnant or restricted sales channels. Online sales of services such as advertising or business services declined by 11%.
Forecasts for lower sales span a wide range of industries including manufacturing, resource management, consumer electronics and hardware, marketing and advertising, technology, and consulting as both consumers and companies begin to control costs, conserve resources, and reduce spending.
Other COVID-19 challenges growing
Sales are only part of the puzzle going forward. 21% of companies had logistical challenges for their businesses including fulfillment issues, supply chain delays, warehousing, and shipping problems. Many don’t expect logistics to improve in the short term.
Particularly hardest hit were retailers selling physical goods, consumer products, and hardware. Just walking around a nearby Walmart, Home Depot, Bed Bath & Beyond, and local grocery stores show empty shelves as well as limited inventory and reduced selection.
An estimated 15% of businesses saw an increase in chargebacks and rate of product returns and 9% experienced a higher than normal churn rate in their business. A worrying trend that needs careful management.
Worker productivity and focus are also seen as problems for 16% of businesses surveyed as work-from-home, social distancing, health concerns, and stress take their toll on employees. Call-center and remote service support workers are carrying a heavier than usual workload and many consumers are annoyed at long lineups, lengthy call waiting delays, or simply the ability of a business to cope with new capacity demands.
Life in the “new normal” is anything but normal for both business and consumers.
How businesses are responding
“To counteract challenges and adapt to the new “world order,” brick-and-mortar companies see the online channel as a must-have, a trend which emerged at a faster pace than before the pandemic,” said Erich Litch, 2Checkout’s President and Chief Operating Officer.
“At the same time, companies are looking to innovate and improve their offerings through new packaging, better client service, optimized processes, and improved communication. A strong digital commerce strategy is critical, and 2Checkout is positioned to help ease the transition as well as optimize and grow existing online operations,” Litch added.
Running promotions and special offers (40%), launching new products (38%), and increasing customer lifetime value (28%) are just some of the ways businesses are responding to the pandemic challenge according to the 2Checkout survey of more than 800 businesses internationally.
Other key tactics include reducing churn and maintaining customer loyalty (24%), expanding into new countries and markets (22%), optimizing ordering experience and conversions (17%), and focusing on product development and internal efficiencies (17%).
Running a profitable business is never easy but during these challenging times, businesses need to move faster, be more responsive, and maintain sales and customer service in every channel. Hopefully, within several years we’ll be able to look back at how much we learned and how businesses are even stronger by having coped with the COVID-19 crisis.
Meanwhile, there is much work to do.
You can see 2Checkout’s infographic at this link if it’s not visible below on your device.
LET’S CONNECT