Dropshipping and Ecommerce in 2020 During and After Lockdown

As the Coronavirus pandemic continues to shape our world, it’s caused a fundamental shift in consumer behavior towards online channels. Emerging data shows that these attitudes are unlikely to disappear once the pandemic ends.

While scores of retail businesses have been struggling to survive in the face of lockdown measures, the crisis has also presented an unprecedented opportunity for bold companies and entrepreneurs to capitalize on the explosive uptick in demand for online retail.

Ecommerce by The Numbers

Over the last few years, there’s been a steady trend in the number of consumers moving away from physical retail towards digital shopping. However, according to new data from IBM’s Retail Index, the pandemic has accelerated the shift by roughly five years.

According to IBM’s report, the bastions of traditional retail, department stores, have been particularly hard-hit by the change in consumer behavior and unfavorable conditions experiencing declines of up to 75% in the second quarter of this year. Several stalwarts of the retail industry such as JC Penny Co., J.Crew Group Inc, and Brooks Brothers have filed for Bankruptcy.

At the same time, data from U.S Census Bureau report that eCommerce sales reached a record high of $212bn in Q2 of 2020. Such a figure represents a 31.8% increase from Q1 and a 44.5% increase year-over-year.

Indeed, one needs to look no further than the performance of existing eCommerce titans. Amazon’s Q3 2020 financial report confirmed a whopping 36% increase in sales year-on-year totaling almost $100bn. While Ebay’s Q3 financials revealed its revenue rose by 25% to $2.61 billion compared with the same period in 2019.

In addition to astronomical industry growth, the pandemic has impacted the nature of the ecommerce industry too. We’ve seen new consumer segments emerge, new products come to the fore, and new businesses springing up and gaining rapid traction.

For instance, a recent global consumer survey from McKinsey suggests that new shoppers (i.e shoppers who had previously never ordered online) were responsible for 50% of the increase in online grocery orders, medicines, cosmetics, and toiletries.

What’s interesting is that analysts predict such changes in the retail landscape are likely to continue for many years. The thinking goes that if each wave of the virus brings more restrictive measures, current consumer purchasing habits will become ever more ingrained. Online shopping may well become the modus operandi for millions of consumers worldwide, even once the pandemic is a distant memory.

Coupling such consumer trends with other factors such as enhanced logistical infrastructure and the roll-out of low-cost high-speed internet across the developing world means there’s little sign the industry’s growth will slow down soon.

This is especially true given the myriad of low-cost tools that have democratized the eCommerce space. eCommerce platforms like Shopify coupled with dropshipping software and marketing tools have all made it easier than ever for anyone to start their own online business.

In all, the coronavirus pandemic has tossed a barrel of fuel on the fire of the already rapidly growing online retail sector. For entrepreneurs and ambitious companies, this opens up the opportunity to capitalize on shifting consumer behavior and favorable market conditions.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes