eCommerce Limitations: COVID-19’s Effect and Retail’s Response

Sabrina Sedicot February 3, 2021

With retail industries unable to predict that a pandemic would sweep across the globe, many companies were unprepared for the harsh outcome that the crisis brought. Over 20,620 retail stores in the UK alone have been predicted to fold due to the virus, and will, if not already, be forced to shut down permanently.

With more stores than ever moving to a digital landscape, one may have thought that eCommerce would save every business, unfortunately that hasn’t been the case. Consumer behaviour has constantly been fluctuating since the start of COVID-19 creating eCommerce limitations. The havoc of customer habits seem to still be constant as new information about the virus is released daily. This article will touch on businesses’ eCommerce response to COVID-19 and how it has repeatedly had to readjust business plans in order to survive.

COVID-19 Effect On eCommerce

COVID-19 has brought to light many issues that eCommerce companies are now having to face. Smaller companies have not had to worry about their online sites as they may have focused on in-person sales as their main form of income. Widely known businesses have had to deal with shortages of inventory resulting in angry customers and a hurt reputation.

Below are a couple of examples of the eCommerce response to COVID-19 and the limitations it has created:

Tax Obligations – Countries collecting money through imposing taxes on in-store retail sales has meant a rise in taxes on eCommerce businesses to compensate. When it comes to international shipping relating to eCommerce, taxes can easily create large unexpected additional costs that consumers are not always willing to pay. In this situation, there is nothing an online retailer can do to fix this issue, making it a limitation that the company has no control over.

Supply Chain Spikes – In the US, it has been reported that nearly 75% of all companies have been interrupted by supply chain issues as consumer shopping increased in response to the pandemic. For eCommerce specifically, this has affected sales, created confusion, and anger with customers. Many consumers are now able to purchase items with a click of a button, however, companies haven’t always been able to keep track of inventory as a result of this ease as manufacturing companies struggle to organise themselves. Unfortunately, this has led to eCommerce businesses having to apologise to their consumers and ultimately lose trust from valuable consumers.

Site Crashes – Some eCommerce companies were unprepared for the large amount of traffic on their sites. This has led to site crashes, slow functionality and lost sales. Consumers in these situations are likely to leave, wary to use the site due the unreliability of it, thinking it may not be secure or even a legitimate shopping platform; once again limiting the growth and sales of eCommerce.

Low Security – Online shopping sales have also led to an increase in customer security issues such as fraud or other private information being shared relating to consumers. Many eCommerce businesses on the smaller side had never had to deal with large security issues, meaning they hadn’t spent much time or effort on security systems to protect their site. Consumers that have been affected by these security issues have affected online stores tremendously, as their websites are no longer looked at as a credible site by their audience.

Overcoming eCommerce Limitations

As time goes on, eCommerce sales are predicted to rise to over $ 2 billion by just 2021. With this increase, companies are discovering ways to overcome eCommerce limitations and provide better services for consumers.

Platform Utilisation – To avoid site crashes and slow loading pages, companies have started to take advantage of different social media platforms to sell their products and services. Platforms such as Instagram, Facebook, and TikTok are all great mediums to extend shopping options, even making the process easier, by allowing consumers to buy with only a couple of clicks.

Expansion – Another method of avoiding limitations through supply chain issues is to spread out distribution across several different manufacturers. Your own business can even choose to use manufacturers in different countries which will also help with spiked shipping taxes as customer purchases may no longer be considered international.

Internet Security – Many eCommerce businesses have been investing in different security programs and tech help options to create a safe platform for users to shop safely. With online shopping predicted to increase, improving online security should be a priority for all company site features.

Consumer behaviour amid Covid-19, as well as moving forward, will continue to change, whether its preferences on different platforms to shop, what will eventually be considered desirable, or even regarding future crises that will raise sales in certain items, eCommerce platforms will need to have the capacity to adapt quickly.

Conclusion

Although the Coronavirus’ impact of eCommerce has shed light on the limitations an online site has in respect to tax changes, supply chain spikes, low security and website crashes, it has the potential to create stronger, smoother shopping experiences for consumers and businesses. eCommerce will have to adapt quickly but, over time, the results will speak for themselves.

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