Coronavirus Shapes the Stay-at-Home Economy
How Can Retailers Protect Their Sales?
The current health scare has made people understandably wary about crowded public spaces, such as department stores and malls.
According to research by Coresight, traffic to brick-and-mortar stores has dropped significantly. Consumers are turning to online shopping, which presents a unique growth opportunity for businesses. But how to use it effectively?
Brick-and-mortar stores are losing their clients
More than 25% of U.S. respondents told Coresight that they’re avoiding public areas, and 58% said they plan to do so if the outbreak progresses. Of those who have already made lifestyle changes, more than 40% are “limiting visits to shopping centers/malls” with more than 30% skipping stores altogether.
The situation will also impact duty-free sales in airports. While GlobalData previously forecasted APAC duty-free sales to reach $43.4 billion this year, the firm has cut that by 19.1% to $35.2 billion, due to the COVID-19 crisis.
The fact that people are hesitant to go out to crowded shopping centers will inevitably lead to the widespread adoption of e-commerce. The coronavirus could be the catalyst that kicks overall digitalization into gear. The question is: Who will take advantage of the opportunity?
Amazon, for example, has been offering free one-day shipping since mid 2019, but has recently accelerated its same-day shipping in a number of big cities.
“[The] emerging epidemic will be like adding jet fuel to an already exploding <online> segment of retail. Amazon and a handful of others will be the beneficiaries of a windfall,” says Doug Stephens, author of “Reengineering Retail: The Future of Selling in a Post-Digital World”.
He also adds that “many luxury players ‘will be the big losers’, because they haven’t fully embraced e-commerce”.
Recent history as proof
Looking back at the 2003 SARS crisis, we can see that difficult times often bring about massive transformations. Consider the challenges that Alibaba faced in 2003 and how it overcame them — and that was back in the early days of China’s emerging e-commerce industry.
Because of SARS-related travel warnings, foreign businessmen suspended their trips to China, and many of them turned to Alibaba’s online services to source Chinese goods instead. As a result, starting in March 2003, Alibaba’s B2B e-commerce business added 4000 new members and 9000 listings each day, seeing a 3–5x increase over the pre-SARS rate.
Don’t take it lightly
One of the most prestigious names in Silicon Valley’s investment scene, Sequoia Capital, issued a gloomy warning about the impact of the novel coronavirus. It suggests that companies pay close attention to their cash runway, headcount and marketing budgets. It also predicts that customers’ spending habits will change.
“It will take considerable time — perhaps several quarters — before we can be confident that the virus has been contained. It will take even longer for the global economy to recover its footing,” the note says. “False optimism can easily lead you astray and prevent you from making contingency plans or taking bold action. Avoid this trap by being clinically realistic and acting decisively as circumstances change.”
How to be on top of your e-commerce game
The spread of the virus is causing temporary stores closure. Shoppers who would have gone to a mall before now have to switch to online shopping. To stay ahead of the game, retailers must create an outstanding online experience for customers, displaying a product as comprehensively as possible. For example, integrating 3D imagery into your online store could be highly beneficial.
Unlike product images or even videos, 3D content doesn’t just describe the product. It replicates the in-store experience by giving customers what they want — engagement, interactivity, and having their doubts about a product addressed. With a 3D product image, the client can look at the product from all angles and make a confident purchase decision. For that reason, an interactive product demonstration is effective for sales.
B2B might also benefit from 3D technologies. Due to transport restrictions imposed by the virus, buyers cannot check the quality of the products in person. Armed with 3D images, they can examine the products, no travelling required.
Cappasity allows you to create hundreds of interactive 3D images for your website per day. Want to try it yourself? Fill out the form to get free access.
If the coronavirus outbreak expands, the number of shoppers in malls will decline by a crucial 74.6%, according to research by RetailDrive. However, wise e-commerce planning and advanced levels of product presentation may not only reduce the losses, but even increase sales.
The next move is yours.