6 Ways in Which the Coronavirus Affected Online Businesses

Our habits have changed substantially because of and during the Coronavirus pandemic. Around the globe, people’s lives are affected in many different ways, and the business sector makes no exception. While a lot of business owners are hit hard by the COVID-19 lockdown and their sale volumes are plummeting, online businesses are struggling to cope with huge demand increase. Throughout this article, we’ll take a close look at the changes that online businesses are going through amidst this unique situation:

B2B Companies selling non-essential products are facing difficulties: Many online businesses are forced to adjust their eCommerce operations and tactics daily - and even hourly. Online channels are going to play an essential part in the next phase for many B2B manufacturers and distributors. Nevertheless, online businesses that sell non-essential products and equipment such as restaurant furniture have seen a decrease in sales opportunities since the Coronavirus outbreak by even 50%. The effect of Covid-19 in the service industry, including online businesses like restaurant furniture suppliers and appliances; revenue was devastating. Many customers postponed existing orders and purchasing decisions. Nobody wants to refurbish his venue or dining space with new chairs, bar stools or restaurant tables that is closed and is losing money daily, risking shut down. This means that their cost of customer acquisition (CAC) doubled and they have to come up with new strategies to survive the outbreak.

Digital marketing is on the rise: Traditional marketing is becoming obsolete. Businesses that relied on traditional marketing are cutting back on their budget. As a result, the ad industry could see a 10.6% decline in revenue, losing nearly $26 billion. Companies are quickly realizing that slashing marketing budgets leaves them with a large amount to spend elsewhere. Investing even a small portion of that amount towards a modern-day marketing strategy can help them stay relevant and push through hard times. According to eMarketer forecasts, Amazon’s U.S. ad business is expected to grow by 50% this year, accounting for 8.8% of the digital ad market. Google’s ad business still occupies 37.2% of the market, although its share is slowly declining. Marketers are investing more of their budget towards Amazon, preferring the platform’s ability to link advertising to a point of sale.

There’s a huge global increase in online shopping for B2C companies – It shouldn’t come as a surprise that when shopping malls are closed, people will still find ways to spend their hard-earned cash. Because people have to deal with more and more restrictions, they have more time to browse the internet. And when people have too much free time, they shop. This means that many digitally mature B2C companies that invest in eCommerce are seeing an increase in sales volume. Are you wondering what people bought online during the COVID-19 pandemics? You might be surprised to learn that the food and beverage sellers had an increase in sales volume of 7.2%, the apparel and accessories sellers 14,3%, Toys and Games 7%, and Home and Garden 8.4%.

So, even if the supermarkets were still open, it seems that a lot of people preferred to order their groceries online. This rise in online shopping is a global phenomenon. A study conducted by Ipso-Mori found that over 18% of UK shoppers choose to buy things online.

Furthermore, it seems that in countries that were hit hard by the coronavirus, internet shopping is even more popular (Vietnam saw a 57% increase in online shopping, India a 55% increase, China 51%, and Italy 31%). This sudden change in people’s shopping habits meant that a lot of companies found themselves in a unique position and are now struggling to cope with the huge demand. For instance, so many people are buying things from Amazon, that the company is currently recruiting 100,000 additional staff, making its current employees work extra hours, and raising wages.

Another area that saw sudden and substantial growth is the use of grocery shopping apps. In the US, these apps are being downloaded at an unprecedented pace. For instance, an app called Instacart was downloaded in March three times as much as it was in February. The Walmart app saw a similar user behavior as it saw a download increase of 160%.

The online gaming sector is thriving - What used to be a narrower market predominantly supported by young people, is now becoming more and more popular. When people are forced to stay indoors for weeks and maybe months, they get bored and start to look for ways to entertain themselves and what better thing to do than to play video games? But online gaming isn’t the only service that’s benefiting from the COVID-19 lockdown, as retailers of downloadable video games are also seeing an increase in sales and subscriptions. For instance, over the past few weeks, the popular PC gaming platform Steam has seen the highest number of users ever, with traffic spikes of over 20 million players.

The demand for streaming services is growing at a faster rate – As millions of people are getting more and more bored as they are locked in their homes, they turn to stream services to keep them entertained. Therefore, the most popular streaming services are witnessing growth in the numbers of new customers that have finally decided the watch Game of Thrones and in the amount of time that people are binge-watching their favorite series. To ensure bandwidth capacity, Netflix was forced to reduce its picture quality by as much as 25%.

This substantial increase in streaming services demand means that in the US, Netflix is estimated to double its expected growth in new subscribers. If their expected growth rate was 1.6% before the COVID-19 pandemics, it now reached 3.8% - and we are talking about a region where most people are already using these services. Internationally, the platform’s growth rate might exceed 30%.

But this phenomenon isn’t just benefitting Netflix, other streaming services such as Hulu, Amazon Prime Video, and Now TV are also doing great. And for newer platforms like Britbox, BB-ITV, or Disney, this situation might prove to be a great opportunity to increase their user base.

Contrary to popular belief, online holiday bookings are not doing so badly – Yes, traveling is out of the question for millions of people at the moment. But think of it this way, while most avid travelers are aware that they won’t be going too far this summer, they will start to make plans for next year. While this doesn’t mean that the travel industry isn’t suffering because of the pandemics, the fact that people are willing to book trips further into the future might help holiday booking platforms to take deposits. This might help them with their current cash flow problems. Needless to say, this whole process is happening online.

It is safe to say that the devastating and unexpected coronavirus pandemics are affecting consumer behavior and online businesses in many different ways. For instance, many businesses are having a tough time staying afloat, while others are expanding their workforce and doing everything they can to meet the huge demand.

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