How E-Commerce Businesses Can Play Covid-19 Situation for Their Benefit

Farokh Shahabi
Nov 25, 2020 · 8 min read

E-commerces experienced a weird year in 2020. Some of them boomed and made a fortune, and the others almost bankrupt. At the first glance, the winners and losers looked identical, but at a closer look, there is a secret to their growth.

The general reaction to the covid-19 era was that the e-commerce industry will boom and grow to a new level, and for the most part, for bigger players like Amazon, Wish, AliExpress, etc. it was true, but for smaller e-commerces, this did not happen.

Just as an example, the company, Wish, is revealing $1.7 billion in revenue for the first nine months of 2020, up 30 percent year over year. And for Amazon's growth, just look at their stocks.

Data snapshot May 6th from — Emarsys created to help businesses by drawing from the eCommerce and retail data of more than one billion consumers and 2,500 brands worldwide to provide an up-to-date view and trends of the economic impact of the COVID-19 pandemic on online retailers.

However smaller players, like most of the local e-commerces, did not experience a growth at all, and in many cases, they saw a huge dip in their monthly order numbers and the average amount of each order.

Most of the e-commerce businesses blamed this on the global economy. People are more conservative with their money, a lot of businesses cut back on their business and they’re making smaller purchases and even cancel their future orders (we saw this more in b2b e-commerces).

For example, if a business is providing food & beverages for local cafes and restaurants, and there are lockdowns, quarantines, and normally fewer people out there having fun, they consume less food & beverages, so they will order less frequently and less amount.

This is true but not for the majority of e-commerce businesses, and even for those b2b e-commerce businesses, there is a way for growth even in this situation.

Pre-Covid Era vs Post-Covid Era

There will be fewer people in offices, remote working is here to stay and will grow in the future, the business trips will decrease by huge numbers (even 50% based on bill gates predictions) and businesses in malls will be forever, different. So it’s very unwise to ignore this new, changed world.

But how can we fit our business for this new era? And more importantly, how to grow, even more now, using the new post-covid era to our advantage?

The Cost of Acquiring New Customers vs. Retaining

E-commerce businesses usually tie their growth with new customers and don’t pay enough attention to their existing customers. That’s why they spend a lot of money on online advertisements on Google, Facebook, etc. In fact, retails, is the biggest online advertising industry in the world, spending around 18 Billion Dollars a year, just in the USA.

© Statista 2020

This shows how much e-commerces value getting new customers, but how much do they spend on keeping their existing customers? how much they value their current customers? What do they do to get their customers to order again, more than sending them annoying newsletters or blind discounts with no value?

The fast-growing e-commerces discovered the value of their existing customers long ago, and they benefit greatly from them. Today, in this era, it’s more important than ever.

There are two very underrated rules of e-commerce that everyone should pay attention to:

it’s 6–7 times more expensive to acquire a new customer than it is to keep a current customer.


80% of your future profits will most likely come from 20% of your existing customers.

You might think that these rules are obvious but the majority of e-commerce businesses, spend more than 90% of their money and time, on acquiring new customers and pay little to no attention to their existing customers. Do you know who doesn’t do that? Amazon, Wish, AliExpress, and every other e-commerce business that’s booming.

So they should spend less on online advertisements, and more on their existing customers.

How to improve your customer retention

Retention comes from “Customer Loyalty” & “Customer Satisfaction”. Customer satisfaction is easier. You only have to deliver good products, have great customer support, and really care about “the quality” of your business, your brand, and the products that you sell.

There’s no quick workaround for growing your customer satisfaction. The only and best way to do it is to provide great products and great services, and that’s the easy part.

The big problem is that a lot of e-commerce businesses are great and their customer satisfaction is really high, but they lack “customer loyalty”.

Customer loyalty is when your customers choose you instead of your competitors, when they really care about your brand and when they become your free ambassadors, and advertise you wherever they can. And it’s much harder to get it than customer satisfaction.

There is a famous quote that even the movie, the wolf of wall street, used. It says: Sell me this pen. And it supposes to show you the power of sales, marketing, whatever.

But aside from being a really powerful image, it’s not applicable in the real world of business. In reality, you shouldn’t sell the pen blindly, you’re not an annoying seller.

The golden rule of sale

You should be selling your products to the one that needs or wants your products, when they need it, or even before that. The price of your product should be whatever your customers are willing to pay and pay again in the future.

This is a heavy rule and a lot of hidden messages. This rule will crack customer loyalty in your business. Let’s break it down:

The one:

Every one of your customers should experience your e-commerce business, differently. It should be personalized just for them.

Not only your website, or all of your sale channels, but every communication with your customers should be personalized, even your newsletters, discount messages, and even the list of products that you show to each individual.

With personalization, comes “Targeting”. Your sale channels will always target each and every customer, in the best way possible. This will boost your conversation rate and the average of every order. Segmentation & behavioral tracking can achieve this, but more on them later.

The Need:

Successful businesses create the need or the craving for their products and more importantly, they target the right customers, and your existing customers, are your target customers. Existing customers create “patterns” and show you what they want next.

The cherry on top? Selling the product to the one before they even realize they need it or want it. This is achievable by tracking the behaviors and needs of your customers, based on previous orders, support tickets, their clicks, their visits, and every data-source that you have on them. This can be done by customer insights provided by most CDPs (Customer Data Platforms).

And last but not least, this solves the paradox of choice. Barry Schwartz defined the paradox of choice as the fact that in western developed societies a large amount of choice is commonly associated with welfare and freedom but too much choice causes the feeling of less happiness, less satisfaction and can even lead to paralysis.

If you’re wondering why every e-commerce business is struggling with a large number of product visits but a very small number of orders (on average 60+ visits per order), it’s because people get frustrated because they can’t choose, because you should be offering a perfect product for each person, not showing them millions of products so they choose. They won’t and you lose.

The Pricing, Special Sales & Discounts

This is called blind pricing and the only outcome is that you lose money, even if the sale is successful, you’d lose more money than necessary.

The special sales and discounts, like the other aspects, should be personalized and targeted. Your customers have different budgets, willingness to pay, and different priorities. So if you want your customers to come back and order again, you should offer them a discount that is most tempting for them and at the same time, you’ll lose the less amount of money possible. This is the perfect discount.

This amount of discount is different per customer, per product, and even per session of purchase. To calculate this you need data analytics & gamification in your e-commerce platform. The combination of gamification with data analytics will provide you the perfect amount of discount at the perfect time for each and every customer. So your ROI is at the highest level possible.


The approach to improve your customer loyalty, to get your existing customers to come back and order again, and again, is by analyzing them and their needs. This way you can personalize your business, your product, and your approach for each and every one of them.

The best way to have this personalized approach in your business is with Customer Data Platforms. CDPs are fully automatic, simple to understand, and flexible for different businesses. With a CDP you realize what is the current status of your business and what are the routes to growth, by analyzing all data from their “existing customers”. In summary, the CDP provides very straightforward answers to these questions:

Who are my best customers?

Who am I losing as a customer? Who is about to leave?

How to stop my customers from leaving me for our competitors? How to never lose another customer?

How to increase customer loyalty & engagement?

How to profit more, from each & every one of our customers?

And a great CDP provides a simple answer to each of these questions and provides you with the next action: The recommendations on what you should do, as a business, to grow.

Thank you for reading this story, I would love to hear your feedback and your experiences regarding it. If you want to contact me or ask me any questions, here is my LinkedIn, I would be happy to hear from you.

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Farokh Shahabi

Written by

Co-founder & CEO at Formaloo | Helping online businesses grow | TEDx Organizer

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