As e-commerce merchants, it’s important to be tuned in to the shifts in markets to understand the sentiments of our customers and be ready for fluctuations in sales activity. If we do this well, we can use tactics to minimize the downside in bad economic times or even maximize sales when the economy is booming. With the Coronavirus crisis very much front of mind for many all over the world, we asked ourselves: what will the impact be on e-commerce?

So far, the biggest impact to us has been the cancellation of Adobe Summit / Magento Imagine – the latter traditionally being one of the largest e-commerce trade shows of the year. But with a growing sense all around that we’re just at the proverbial tip of the iceberg of this thing, and with global financial markets reeling from the uncertainty, we feel compelled to weigh in on what we believe we will see happening in the world of e-commerce this year.

So here are some key questions about the crisis and e-commerce and how we are currently answering them

Q: Is the Crisis Going to be Good or Bad for E-commerce?

A: It will be the same as it will be for the economy as a whole; e-commerce is such a pervasive part of the global economy... we’ll see the good (innovation) the bad (short term pullbacks, hesitations and postponements of business initiatives) and the ugly (increasing risk, and a lot of “out of stock” notices). As of the week of March 9, we’re in the “shock” phase where the virus is just spreading in the US. It’s hard not to push the pause button on initiatives but those who have the fortitude to keep going and to keep innovating are going to come out on the other side of this in great shape.

Q: Will B2C Retail E-commerce Sales Benefit from the Coronavirus Crisis?

A: There’s a theory that the growing fear of being in public retail settings and crowds might bolster e-commerce sales as people opt for the online alternative to high streets. This isn’t necessarily true. The problem is that e-commerce, which reduces time, distance and touches between the factories and consumers, may actually have the capability of exacerbating the supply chains that are interrupted by this crisis. There is less friction in the economy with e-commerce. So although it’s easy for consumers to sit home on their couch and order on their phones, the products might not be available because a lot of the resources in the supply chain that produce the items are not working and producing as they normally do.

Q: Is the E-commerce Industry Going to Change Based on this Crisis?

A: We think there are going to be a lot of opportunities for marketplaces, apps, extensions that help companies avoid supply chain disruption. This will essentially point to solving the need for supply chain diversification from a company’s vendors’ manufacturing floors right through to inventory on their (b2b) customers’ shelves.

Marketplaces

Affiliate programs

Make-to-order manufacturing

Customized manufacturing

Also more controls on inventory and shipping will be in demand in order to account for future economic events where scarcity comes into play.

Q: What E-commerce Verticals Will Benefit From the Crisis?

A: It’s pretty clear that the industries in e-commerce that will benefit from the crisis include entertainment software and just about anything that streams or is downloadable. We expect gaming and entertainment to see the most lift over the next six months. We also think there might be a bit of a run up in demand for other types of products that support entertainment at home. As long as they can be produced, speakers, home theater products will get a boost from people moving their money from vacations to STAYcations. It’s obvious that travel is getting killed short term but assuming this is a 6-12 month problem in an economy that is overall performing quite well get ready for travel to explode in 2021.

Q: With a Temporary Downturn in the Economy, How Will E-commerce Software Platform Companies Fa...