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Over 28 million infections and nearing a death toll of 1 million, the defining COVID-19 crisis of 2020 took the world by surprise, and has exempted no one from its ramifications. From bulk-buying supermarket groceries to indulging in one-too-many retail therapy sessions, it would be a complete understatement to say that the pandemic has sent consumers worldwide into an absolute frenzy. Equally, the global onset of city-wide lockdowns and social-distancing measures in March forced businesses to pivot operations online, bringing unprecedented levels of uncertainty and change across all industries. And while short-term orientation is key to survival, it’s the long-term vision of how we respond to the current crisis that will come to shape the societal and economic order of the future.
In the words of Albert Einstein “in the midst of every crisis, lies great opportunity” – and this holds true for the boom being experienced by the e-commerce industry amid the pandemic. According to statistics from the U.S. Department of Commerce, retail e-commerce sales rose exponentially by more than 30% between the first and second financial quarter. During the height of the viral outbreak, sales skyrocketed to over $211.5 billion US dollars (165.3 billion GBP), up from $160.4 billion (125.4 billion GBP) in the previous quarter.
Picture Source: Statista
Whilst brick and mortar retail continues to decimate in the hands of the pandemic, we have witnessed a paradigmatic shift in sales and marketing strategies as businesses desperately attempt to seek out alternative solutions and maintain steady income streams. With customers more motivated than ever to stay at home, work remotely, and turn to e-commerce for goods, this has opened up the perfect window of opportunity. From budding entrepreneurs and small enterprises to big-name brands, businesses at every calibre are shifting to the digital sphere, keeping operations afloat by launching and selling their products online.
This comes much to the delight of digital retail giants, with Chinese e-commerce companies Alibaba and JD.com having reaped significant rewards. Both exhibited robust growth, with an impressive year-on-year increase of 34% in revenues according to their second-quarter financial results. Stock prices followed in a similar suit, soaring to record-breaking highs for both companies.
Needless to say, the collective efforts taken to contain the covid-19 outbreak have resulted in different market needs, consumption patterns, and consumer behaviour. The increased need for adoption in digital solutions have allowed adjacent industries to benefit from the current consumer landscape. For example, a wealth of new mobile wallet technologies and contactless payment services have emerged this year, catering towards consumers’ accelerated need for FinTech solutions, to minimise contact and better protect themselves from potential virus transmission. The seamless shift made to contactless payment methods could indicate modern societies eventually moving towards a cashless society.
However, the sudden spike in demand for e-commerce coupled with radical changes in purchasing decisions under the volatile business environment have also led to major supply chain disruptions. With fears of economic downturn and unemployment looming over their heads, many consumers chose to reign in their spending on non-essential goods, instead prioritising household essentials. To the amusement of some, the pressures of lockdown combined with the threat of the virus bizarrely led hoardment of supplies, with news of people panic-buying hand-sanitizers, canned foods, and toilet paper, making headlines earlier this year.
The underperforming supply chains across both e-commerce and brick-and-mortar retail brings to light pressing supply-chain problems, forcing many businesses and industries to rethink their operational models. Fortunately, as advancements continue being made in technology over artificial intelligence (AI), internet of things (IoT), and cloud computing, this will pave way to greater, more efficient supply networks, making businesses more resilient against possible future disruptions.
The future of the economy remains uncertain as we begin to heal from the coronavirus pandemic. Whilst new societal trends continue to unfold along the retail landscape, we will undoubtedly begin to see a new normal emerge, forever changing the way we work, learn, shop, and interact with one another. Though crisis-induced shifts in demand for e-commerce are temporary, only time will tell whether the underlying shifts in consumer behavior we’ve witnessed so far, will result in permanent changes to the way business is conducted today.
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