As of the end of March, 2020 one third of retail e-commerce sellers recognized that COVID-19 crisis challenged them to update their marketplace strategies to improve their Amazon UK sales. Interestingly, they are planning to do further updates due to Amazon’s fulfillment restrictions on shipment conditions for various product categories too. That’s why it is important to see what has changed in consumers’ behavior and sellers’ conditions to be able to react effectively to the changes in e-commerce.
Impact of COVID-19 on e-commerce
Recently we experienced that COVID-19 outbreak turned to be a significant challenge for both consumers and businesses in several different ways:
- There are changes in consumers’ behavior in the whole world; customers are changing what they’re buying, when, and how. Moving from proactive to reactive health-minded purchases and stocking up on essentials. This is mostly because of crowd mentality and not because of need. Restricted shopping affected many people negatively, especially in areas like restaurants and travel (which were cast away or furloughed). In the end, this will lead to “normal”, but greatly modified consumers’ behavior;
- The global supply chain has been affected by the ongoing coronavirus crisis mostly caused by consumers’ behavior changes. Consumers moved from bulk-buying to BOPIS (buy online, pick-up in store). However, in reality, Amazon UK sales aren’t higher far and wide. There is a considerable increase in the sectors providing essentials like groceries, household goods, and medical supplies. According to survey data, during the COVID-19 crisis people are spending up to 30% more time online. This opens up a good perspective for online sellers in the above industries. Consequently, especially after that the World Health Organization stated that it’s safe to receive packages. Packages that have been moved, traveled, and were exposed to different conditions and temperatures. As a result, lots of offline stores were forced to close. Low demand and offline shopping also reduced due to store closures. Merchants with online selling capacities became more profitable especially those that helped people to stay fit at home.
Effect on Amazon UK sellers
For sellers it means that their Amazon UK sales activity and profit trends depend on the category of items as well as Amazon’s fulfillment services. It makes their uncertainty even worse. Amazon’s marketplace fulfillment restrictions badly affected some sellers’ merchant activity and they had to look for alternatives. They’re facing lots of uncertainty trying to support their consumers’ needs. As a result, a large part of businesses had to update their marketplace strategies and budget to be able to survive.
For Amazon, COVID-19 crisis is a time of comparatively significant concentration of customers’ needs on household goods and groceries. People who never felt comfortable to deal with Amazon, they made it a habit to purchase consumables online. However, as demand grew, shippings were delayed and Amazon was forced to focus preferentially on essentials to be delivered ASAP. For this reason, Amazon’s website is now saying “We are giving priority to items that our customers need the most. You may experience shipping delays. As for a number of non-essentials, Amazon quotes delivery guarantees of a few weeks. A lot longer than a usual delivery – that usually takes about 2 days.
Contrary to most retail sellers, Amazon has hired more than 100,000 new employees for their warehouse, shopping, and driver positions to be able to handle the increase in demand. As a result, even more consumers turned to Amazon for goods. During the month of March 2020, the number of total daily visitors has increased by 9.4%. In comparison to the same period in 2019 (from 69 million in March 2019 to 75.51 million visits in March 2020). During the 1st quarter of 2020 Amazon’s direct e-commerce revenue was $34.76 billion, which is 18% higher than in the previous quarter.
However, it would be fair to say that a recent jump in demand isn’t something incredible and outstanding for Amazon. For example, 31st March 2020 (it was the highest-traffic day in March) the number of daily visits on Amazon.com was comparatively less than the peak days in 2019 like Prime Day in July or Cyber Monday in December.
6 ways for higher Amazon UK sales
There is a belief among economic researchers that people will go back to offline shopping after the economy reopens. It means there will be a second stage for the e-commerce industry to progress. This will be beneficial for Amazon too, which is hardly trying to adapt to changes in demand. It spent lots of resources on 1-day Prime delivery prior to the coronavirus. Now, it is hiring numerous warehouse staff, drivers, and also dealing with AWS traffic spikes during the COVID-19 crisis.
The general question is how Amazon sellers can survive in these challenging times when there is a limited possibility to sell products remotely? Or,
alternatively, how they can adapt to the rapid changes caused by COVID-19? Is it possible to achieve higher Amazon UK sales during the COVID-19 crisis? To answer these questions let’s see 6 recommendations on adapting and improving Amazon UK sales during COVID-19.
- It would be safe for Amazon sellers to look for the alternatives because of Amazon’s restrictions in terms of warehousing. Therefore, one of the solutions is searching for cooperation with third-party logistics companies to store inventory. It would let the sellers stay afloat until Amazon allows shipments from all merchants to FBA warehouses again.
- Try to be as lenient as possible to your consumers in these cruel times. Remember that it might be putting them at risk to go to the post office or even outside. Therefore, buyers appreciate any prolongations of discount programs and more lenient return policy due to COVID-19.
- One of the most important things to remember is that the crisis won’t last forever. It’s common to see marketing operations shutting down by lots of firms until further notice. However, this decision delays business recovery. These businesses will have to fight for their previous level of merchant activity instead of enjoying the benefits of higher demand once the economy reopens. It might sound a bit unnatural under the current conditions, but the recovery will take place after all. Businesses should be ready to go.
- Try to evaluate the advertising costs and inventory losses. If ad costs seem high, then compare it with the losses caused by inventory damages. It can be especially serious for destructible goods and merchandise that becomes out of date. Sometimes these losses can be noteless but costly. If there are no supply issues, then increasing ad costs might be a good push to gain a larger market share in the relevant category.
- Create a blog or portal where you can publish relevant information on your response to COVID-19. Keep your customers up to date as the situation develops. Show how cautious you are about visiting the office and monitoring workers. How you’re keeping your employees safe, and how you’re handling and delivering the products. Last but not least, show how you fight the problem wisely and calmly. This will help you improve your relationship with your customers in the process.
- On the other hand, people are truly tired from negative reports related to the economic crisis and mortality. It’s the best time to get in touch with blog-writers and journalists. Ceate interesting stories that are different from the dominating mainstream media.
We hope some of the above ideas will help you turn the current situation around and improve your Amazon UK sales. If you are at a stage, where you need help keeping on top of your finances, at What a Figure! eCommerce Accounting, we will be happy to help you.
If you are an eCommerce seller, what strategies helped you during the current crisis? What worked? What hasn’t? Please share with us, we would love to hear it!
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