The coronavirus pandemic sent shock waves through the enterprise and economy, affecting all industries, but especially retail. With brick and mortar stores forced to close their doors or reduce accessibility, shoppers opted for online orders and curbside pickups to get necessary items.
SEE: The new normal: What work will look like post-pandemic (TechRepublic Premium)
“The impact of COVID-19 on the retail industry has been profound. Even as essential retail businesses such as food/grocery/consumables that remained open through the crisis saw a topline boost in demand, the sector incurred huge escalations in operating costs that dented their profitability,” said Sandeep Unni, senior research director at Gartner.
“For other discretionary segments, the impact has been pretty devastating due to continued closures of physical stores and decrease in consumer spending,” Unni said. “For many of the first casualties of the crisis such as Neiman Marcus, JCPenney, J Crew or Lord & Taylor, the pandemic proved to be the last straw for businesses that were already struggling pre-crisis.”
As a result, online shopping took off, especially in the US, said Omri Traub, founder and CEO of Popcart, an e-commerce browser extension.
“[Coronavirus] has transformed the way we shop,” Traub said. “Some people believe that the whole e-commerce adoption in the US has been accelerated by five to 10 years.”
The major items consumers turned to online were associated with essential goods, such as household cleaners or toilet paper.
“One of the main changes we have seen in consumer shopping behavior is the shift of spending towards more essential categories,” Unni said. “There has been a spike in digital activity even in historically underpenetrated segments like grocery.”
“For example, pre-crisis online penetration in grocery was only 2-4% of total sales in the US market, and has lagged behind other markets such as China or even the UK. The sudden rise in demand driven by the crisis has further amplified pain points in last mile execution and delivery,” Unni noted. “Anyone that has ordered grocery online would have likely experienced logistical challenges such as availability of/delays in delivery windows, item availability and substitutions. We’ve also seen price inflation particularly in online channels.”
However, developing technology, like Popcart, is stepping up to the plate to help with these issues.
Tech and online retail issues
Traub echoed the same problems with retail that Unni mentioned, particularly the supply issues and surge pricing.
These problems were what inspired his creation of Popcart, an online internet extension that compares prices of items across online retailers and locates the lowest one.
Popcart is similar to the other popular browser extension, Honey, however, Popcart doesn’t only search for coupon codes, but rather the overall lowest price, Traub said.
Surge pricing often happens on Amazon, Traub said, and people looking for an item for the first time may not realize that the offered price is really high.
“If you’re just shopping on Amazon, $29, $89, $87, or whatever it is, could look like a good price,” Traub said. It’s only through comparing prices that you’re really benchmarking what is a fair price for this? And it turns out that at Walmart [the item] is available for less than half the price.”
Popcart does all the work, tracking price fluctuations at different stores, comparing them, and then presenting the options to the user.
Prices also fluctuate when third-party sellers swoop in. Many large online retailers offer sales by third party sellers, and these sellers sometimes ratchet up the price of items to make a bigger profit. Popcart helps avoid users falling into that pitfall by also comparing those third-party sellers with other stores, Traub said.
The online extension tool can even help users when e-commerce platforms run out of supply.
“We call it the Supply Finder by Popcart, which looked specifically at the hard to find items, like masks and disinfecting wipes and toilet paper, during the period where there was the most severe shortage. And there’s still a significant shortage of many of these,” Traub said.
“We tailored the way our system worked to offer you a real-time feed of when these products come back into stock,” he added.
While the pandemic has made getting important, and desired, items difficult, technology is helping to mitigate those problems.
For more, check out COVID-19: Five business continuity challenges coming to the retail industry on TechRepublic.