The presence of e-commerce in the U.S. has grown on average from 13.7 percent to 33 percent in terms of sales revenues throughout the coronavirus disease (COVID-19) pandemic, said Francisco Quevedo, an assistant professor in the Department of Marketing.
Several Rutgers professors and an industry professional discussed the effects of the pandemic on e-commerce and how it has shaped changes in the marketing industry as well as consumption.
Quevedo said that factors such as stay-at-home mandates and fear regarding contracting COVID-19 have played an important role in the rise of e-commerce as they have increased the habits of individuals to consume online.
“In a corporate study we performed, fear continued to be a determining factor in consumer behavior once stay-at-home measures were lifted,” he said. “The pandemic added to the natural growth of e-commerce due to changing demographics and psychographics, and advancing technology.”
Stacy Schwartz, a professor in the Department of Marketing, said the pandemic has led to an increased presence of omnichannel retailing, which allows consumers to purchase goods in the physical world but still be connected to the digital world in order to make informed decisions or purchases.
“The commitment to digital being an important input, making (companies) more resilient to changes in the economy and changes to demand is still there,” she said. “So while they might not want to over-emphasize the e-commerce channel as the main channel, they definitely want to invest in e-commerce so that it does a good job of complementing their in-person channels.”
Elysa Strug, director of digital marketing at Party City, said the growth of e-commerce and omnichannel retailing was a significant change of pace compared to their pre-pandemic marketing strategy. This was mainly due to the fact that the company did not previously have a significant online presence and also emphasized in-person customer service rather than online.
Quevedo said that many companies have experienced similar trouble in adapting to this rise in e-commerce as well.
“While supermarket sales did not get affected, except for shortages at the beginning, many restaurants have closed, as have many retailers who did not keep up and are in deep trouble,” he said. “(The) firms which have not been able to adopt omnichannel strategies … are obviously losing ground to e-commerce.”
Though, he also said that companies such as Amazon, Zoom and UberEats have all been able to adapt well to and benefit largely from this rise in e-commerce throughout the pandemic.
“While many brick-and-mortar stores have closed … Amazon posted four consecutive record quarterly profits, attracted more than 200 million Prime loyalty subscribers and recruited (more than) 500,000 employees to keep up with surging demand,” Quevedo said. “The company’s revenue growth rate jumped in the 35 percent to 40 percent range from what had been a 20 percent to 21 percent range during the pre-pandemic days.”
Strug said that the increase in services such as curbside pickup and delivery have resulted from the pandemic since people could not or did not want to go into the store. She said these services have allowed for customers to conveniently shop without having to worry about any health concerns.
“Specifically, what I'm seeing is a lot more companies are realizing that their e-commerce channel needs to be an experience unto itself, not just a place where you do a fast transaction when you know what you're looking for,” Schwartz said. “(Companies) are realizing that online is really an extension of the store. And the store is an extension of online.”
Companies will likely begin to improve their technologies in the future to make online shopping more accessible to consumers, she said. A physical retail presence will remain, but e-commerce will work closer toward developing company resiliency in the long-term to change the role and function of physical stores.
Quevedo said that e-commerce is the future and predicted that more than half of worldwide sales will soon be online. Additionally, he said digitalization will be a permanent presence due to the growth of digital and social media marketing and the development of artificial intelligence.
“As more (and) more of the new generations begin and end their purchases through their cell phones, banks and insurance companies … airlines, and many other industries will have to find ways to blend their sales processes with omnichannel strategies just as well,” he said.
While no more large jumps in e-commerce growth are expected, unless another crisis emerges, Quevedo said he believes that the growth trend will still remain faster than pre-pandemic.
“Look at Rutgers, it continues to expand its offer of online and hybrid classes and programs. That should signal something about the future,” he said. “Many companies strengthened their digital platforms because of the pandemic, and that will facilitate e-Commerce after it all passes.”