E-Commerce: The To-Be Norm of Post Covid-19

After the initial impact of coronavirus, companies are now slowly adapting to a more technological and touchless world. With many being unable to perform simple presential day-to-day transactions, they are forced to evolve their methods of performing business. In this article, we will discuss the rise of e-commerce.

According to Forbes, there are 4 business trends allowing companies to capitalize on innovation and technology:

  • Mobile commerce and no-touch alternate payment options
  • Leveraging software (all-in-one personal databases)
  • Automation
  • Faster delivery

These can hardly be described as new, since companies like Amazon, Alibaba, JD and eBay have been utilizing these aspects and making them possible for years. True change comes when a generalized movement occurs within society, as what is “regular” is now related with different practices. It can primarily be seen when looking at medium and small companies, examples being when the local fruit seller allows for orders through a website or administrative staff now works from home.

More interesting are the companies whose services provide support to the final sellers. These companies a have a symbiotic relation with traditional ones when the general sales method shifts to an online one, meaning that the more a retail profits from e-commerce, the more it is expected to invest in it, and consequently in the firms that provides those services.

One such example is Stackline, a retail intelligence and software company that optimizes e-commerce marketing performances and works with over 2000+ brands, such as Sony, Google, HP and Nestlé. Even though it is a private company, it is a good example to study.

Stackline has constructed a set of strategies for costumers to improve their sales amidst the outbreak, providing data, guidance and support, setting itself as an even more valuable partner to work with, and as such one can expect it to continue to grow.

The company compiled the top 100 growing and declining categories in e-commerce in March compared to the same period last year. The growing categories are mainly related to products to use at home, such as bread machines, whose sales grew 652%, computer monitors and office furniture and supplies, along with fitness products and sanitary ones. With so many people working from home, afraid of the disease, not being able to go to a restaurant or the gym, it was predictable that products which can be used where you now spend more time and replace services that are closed would have an impactful increase of sales. Contrarily, products that related to traveling, outdoor activities and fashion have seen a decrease in their sales, as now they cannot be used as before, and there is no true prediction to when such use will be possible.

In conclusion, for the near predictable future, companies that focus on products and services that do not require much or at all traveling or contact of any form are expected to grow and thrive more than any others, and as this trend is set to be the norm, these firms will take over the market and can be considered a rather safe and profitable investment.

Published in our April Newsletter

David Tita, BSc in Management

Published by lisboninvestmentsociety


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