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Effects of Global Pandemic on Digital Businesses

Discover the contemporary issues and covid-19 pandemic impact on digital businesses and e-commerce.
© Coventry University. CC BY-NC 4.0

So far this week, we’ve discussed how digital technologies have changed industries, business performance and enterprises. The digital business landscape is still rapidly evolving and managers and decision makers need to be able to respond to emerging issues and challenges.

Over the next few steps, we’ll discuss three contemporary issues that impact on digital business and e-commerce:

  • The covid-19 pandemic, which has forced all industries and sectors to move to a new business model
  • Security issues that threaten e-commerce performance and reliability
  • Social media and the emerging opportunities it presents for business growth

Pandemic

Covid-19 has significantly changed the behaviour of consumers and the competitive landscape for businesses. Consumers of all industries are experiencing severe financial uncertainty, which presents a challenge for businesses and companies whose ‘cost structures rely on their ability to command a price premium’ (Knowles et al, 2020).

Covid-19 offers opportunities for new e-commerce brands that can meet changing customer needs and provide more economic products or services. There are a number of factors that will influence a consumer’s decision to purchase from a new brand/company, from value and convenience, to availability, quality and purpose.

This diagram taken from a report by McKinsey & Co (2020) demonstrates the importance of these factors in different countries.

Chart with different countries listed at the top, and various reasons for trying a new brand listed on the left hand side. The countries are US, Mexico, Brazil, South Africa, UK, France, Germany, Spain, Italy, India, Japan, China and Indonesia. The reasons are availability, convenience, value, quality/organic, purpose driven, and health/hygiene. For all countries, the top reason for trying a new brand is value. Availability is the second reason for the US, UK, Germany and Italy. Convenience is the second reason for South Africa. Quality/organic is the second reason for Brazil, France, Spain, India, Japan, China and Indonesia. Purpose driven is the second reason for Mexico and South Africa. Availability is the third reason for Mexico and Indonesia. Quality/organic is the third reason for the US, UK, Germany and Italy. Purpose driven is the third reason for Brazil, France, Spain, India and China. Health/hygiene is the third reason for Japan.

While it is estimated that e-commerce has grown by nearly 20% in 2020 (World Economic Forum, 2020), not all industries have shifted to e-commerce. The following diagram, adapted from Common Thread Collective (2020), shows data on e-commerce shopping behaviour during COVID.

Chart showing e-commerce consumer sales during COVID-19. Medical sales is 500%. Baby products is just over 350%. Cleaning products is just over 200%. Food and beverage is just over 150%. Work from home is just below 100%. Health and fitness is just below 100%. Toys and games is just over 50%. Pets is 50%. Household, beauty and care, outdoor, electronics, and sports and fitness are all just below 50%. Jewelry and luxury, fashion and apparel, auto or tools, and bags and travel are all below 0%.

Your task

What do you think the future holds for digital business and e-commerce as a result of the current COVID-19 pandemic? Share your thoughts below.

References

Knowles, J., Richard, E., Lynch, P., & Dollens, J. (2020, May 5). Growth opportunities for brands during the COVID-19 crisis. MIT Sloan Management Review. Web link

McKinsey. (2020, October 26). Consumer sentiment and behavior continue to reflect the uncertainty of the COVID-19 crisis. Web link

Orendorff, A. (2020, December 9). Coronavirus ecommerce trends, data & strategies: online shopping in the age of COVID-19 [Updated]. Common Thread Collective. Web link

World Economic Forum (2020). COVID-19 pandemic accelerated shift to e-commerce by 5 years, new report says. Web link

© Coventry University. CC BY-NC 4.0
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