E-commerce Continues To Be A Way Of Life—Is Your Brand Ready?

August 18, 2021

Digital transformation was already creating an ecosystem where brick and mortar stores were being forced to shut shop. Blockbuster filing for bankruptcy in 2010 due to Netflix winning their customers over is a classic example. 

The Covid-19 pandemic has put this growth and dominance of digital on steroids. It has fast-tracked the growth of e-commerce and also fast-tracked the rate of physical outlet closure across retail segments.

Brands like Amazon and Walmart, which were already household names have risen to become a part of every consumer’s life. From creating loyalty programs like Prime offering free shipping to a wide range of payment options to building a seamless shopping experience, retail brands have risen to the occasion to make the shift to digital easy for the consumer.

On the other end of the spectrum, retailers have closed more than 9,500 stores. Since the start of the pandemic. Among those who filed for bankruptcy since the pandemic started, the majority are household names – Francesca’s, Guitar Center, Century 21, Stein Mart, and J.C. Penney. While their business models were struggling pre-pandemic they just couldn’t absorb the impact brought on by the pandemic shift in consumer habits to digital.

How Are Digital Brands Impacting Lifestyle 

Before the pandemic, e-commerce was an option; now, it has become a way of life. The consumers of the new normal are shopping for everything they need from daily essentials to vanity items, through e-commerce platforms. 

Trends analysis shows that the industry achieved growth targets predicted for 10 years in 3 months due to the changing customer behavior. 

During the pandemic consumers who risked going to retail stores found themselves exposed to the risk of contracting coronavirus and saw shelves empty for some essential items they needed. In many cases, they had to wait in lines to enter the stores due to the limit on the number of people allowed inside stores. And despite going to the store and waiting in line finally when they reach inside the store to see items they needed being out of stock, a waste of time and energy.

All these challenges forced consumers to go digital. They went online and bought everything from e-retailers like Amazon: masks, hand sanitizers, groceries, and clothes. Even if the same items like sanitizers and masks were unavailable online, at least they didn’t have to drive all the way to the store to find out.

On June 29, 2021, Amazon announced a net sales increase of 27% to $113.1 billion. Other brands that did the same, were Walmart and Exxon. Both exceeded the $100 billion mark in revenue.

Consumers not only bought essentials online, they even bought items like gym equipment, workout clothes, furniture, and home improvement products. As a result, brands like Home Depot increased their revenue by $9.2 billion. The lockdowns and restrictions have driven consumers towards e-commerce and now that they have enjoyed the convenience of online shopping, these consumers will not return to traditional offline shopping.

Brands have had to match this growing comfort with digital shopping by updating their interaction mediums and communication. Investments in ICT (Information Communication and Technology) and DX (Digital Transformation) have increased multifold.

Amazon focussed on streamlining its delivery system and consumer communication. And although restocking was a challenge for some brands, they made sure to update their processes to meet increasing demands. 

But it is not only big brands that rose to the occasion. Local brands also updated their supply chains and communication to meet increasing demands. For example, Bisou NYC, a beloved bridal wear brand for South Asians, now gives online tryout options in addition to in-store customization. Trader Joe’s increasing its line of Indian food quintessential to family meals, like yellow Tadka Dal to Madras Lentils is another example of brands choosing to become part of their audience’s lifestyle.

For brands, this is a signal to revisit the drawing board and check whether planned strategies can address the new consumer behavior. And to do that brands should understand the new segregation of customers. 

The New Consumers and What Brands Need to Offer Them

According to the report “How will COVID-19 change the consumer” there are five new types of consumers in the new normal:

  • The “On The Edge” Customer

This accounts for 20% of the overall population. They are extremely cautious, uncomfortable with visiting public places, and 40% likely to cut down personal spending. Health, financial status, economic situation, and job security are their primary concerns. 

Brands targeting these kinds of customers need to highlight their economic benefits and safety. The consumer should be given the understanding that using their brand will give them the financial and physical security they need.

  • The Tentative Returner

Consisting of 23% of the population, these consumers are similar to their “on the edge” counterparts. They are likely to cut back on spending and are skeptical of returning to public places. However, this segment is open to interacting with brands they trust and know. 

For brands that have a customer base like, showcasing how their brand has taken steps to make their shopping experience safer is crucial. Loyalty programs to keep them on board are also crucial to increase repeat business.

  • The “Me. Reinvented”

This is a segment emerging brands need to keep an eye out for. These customers are ready to transform themselves and try out new e-commerce shopping experiences. 

11% of the population, these consumers are likely to buy more locally-sourced products. Local brands need to have the digital and supply chain infrastructure ready to address their curiosity.

  • The Stubbornly Seeking Normal

Making up 28% of the consumers, continuity is the basic need of this segment. Their goal is to return to a life that mimics a time before the pandemic. However, they are less likely to spend on non-essential items.

Brands need to have facilities that deliver familiar experiences to their customers. Online try-on, virtual walkthroughs, and choice of in-store products are key aspects to keep in mind.

  • The YOLO

This segment makes up 17% of the population and is not fettered about the present situation. They are open to new technologies and ready to try all the new features that the e-commerce industry is coming up with.

To win these customers, brands need to promise new possibilities and innovations that will upgrade their e-commerce experience. Technology like virtual reality and 3D simulations will be key to winning these customers.

Responding to the Situation

The pandemic exposed a critical business reality, a fact that the retailers that had already deployed digital solutions fared much better than those that were not digital-ready. Businesses now truly understand that the continuity of their operations critically depends on their digital transformation and capabilities. 

Brands need to strengthen their bottom line and reimagine process flows to address the changing behaviors. There needs to be a flat hybrid approach to working where customers are provided with omnichannel experiences of their choice. To do this, brands will need nimble and skilled teams that specialize in their work.

To meet the growing demands of consumers looking to upgrade their homes, brands like Home Depot and Lowe’s revamped their digital strategy. As a result, digital sales rose by 80% for Home Depot. For Lowe’s, digital sales doubled and year-on-year revenue rose by 106% when they focussed on digital medium. 

Peloton is another brand that responded to the lockdown and the consumer’s demand for fitness extremely well. Their business model was already built around a digital-first approach. And when the pandemic hit, all they needed to do was update their supply chain strategies to continue serving customers.

Execution of interaction strategies will also be key in attracting new customers or retaining existing ones. Scrumptious Wicks nails their communication by tapping into a strong emotion prevalent among the consumers in the new normal—comfort and family. Their message of “Relax and unwind with the scents of South Asia…” promises an escape from the uncertain cloud of the pandemic. Their message of bringing family together for relaxing activities is also well received. They have set a clear expectation that all products will be delivered within 7 working days in terms of operation. This setting of timelines is crucial and gives the buyer assurance of Scrumptious Wicks’s trustworthiness.

Soma Ayurvedic is another wellness brand that has lucrative offerings for its potential buyers. First, their products promise long-lasting ayurvedic benefits, whose demand has risen during the pandemic. And second, they provide free shipping to destinations in the U.S. They have set up the infrastructure and business model that can meet these guarantees.

Becoming Ready for the New Normal

E-commerce is here to stay. The convenience factor has made consumers stick to it for the times to come. And to stay relevant, businesses will need to understand buyer demographics.

1 in 3 South Asians in the U.S. logs on to FrontAd’s digital platform. Analysis shows that they are ready for a digital-first approach that meets their lifestyle. Just as the iPhone became a quintessential part of life for most Americans (especially South Asians) every e-commerce brand has the opportunity to emulate the same level of brand stickiness. 

67% of consumers are planning to socialize with people in person again in the new normal. However, the affinity to e-commerce brands they developed during the pandemic is predicted to last for a long time. Trust will be a key factor to retain these customers. Local brands, national or international brands the winner of consumer confidence will be one that provides trust and impeccable service. Is your brand digital ready to cater to the lucrative South Asian audience?