Covid-19 and the digital ecosystem
Undoubtedly, 2020 will always be remembered as the year Covid-19 shook the world, changing almost all aspects of our lives, from the way we socialise to the way we work down to the way we shop.
Pandemic and the way people shop
Covid-19 change will remain long after the pandemic is gone, altering the way people shop forever.
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The e-commerce rush
As brands scramble to consolidate their digital presence in order to meet consumer demand, Mastercard SpendingPulse registered a 49% increase in online sales, year-on-year.
The realisation that e-commerce has become an essential pathway to commerce permeated the world of business, up to the higher echelons. This autumn, the French Ministry of Economy launched a call for projects in order to make a census of existing solutions that could help local businesses carry out their digital transformation (Le Figaro).
In fact, not only smaller shops but also larger, affirmed brands have been put in serious jeopardy by the pandemic: in the highly desirable Champs Elysées in Paris, sales have dropped a staggering 51% during the first semester of 2020 (Procos).
The winners
As people were forced to spend more time at home, one of the categories that most reaped the benefits of the pandemic-induced lockdown were homeware and related items such as DIY tools, decoration and furniture (Usine Digitale).
During its Black Friday sales, ecommerce giant Amazon saw a spike in such products as well as in the loungewear clothing category.
Amazon: the elephant in the room
As TechCrunch elegantly puts it “Amazon has continued to reap the rewards of a society increasingly dependent on e-commerce — a trend further fueled by the COVID-19 pandemic.”
A shake-up in Luxury
Pre-Covid19, online sales were still a marginal phenomenon in the worldwide Luxury business, accounting up to 12% of total transactions (BCG).
In parallel, Luxury giants LVMH, Yoox-Net-a-Porter and MatchesFashion have all carried out consequential changes in their e-commerce executive teams, which reflects the evolving priorities in the Luxury ecosystem (BoF).
As most countries are facing a second, or third wave, and most are upholding social distancing and responsible shopping practices, e-commerce will undoubtedly cover an increasingly central role in the lives of luxury shoppers, and thus in the company strategies of brands wishing to cater to them.
The bottom line
“The key principles for managing change will be flexibility and agility, alongside operational resilience — a critical capability in an uncertain environment.
To inform decision-making, we expect data and analytics to play an increasingly important role, helping companies to track shifts in demand across geographies, categories, channels and value segments.” (BoF-McKinsey).
In such endeavor, online Marketplaces can prove to be a key point of contact between brands and consumers.