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COVID-19 Exposes Which Brands Have Been Slow To Embrace E-Commerce

  • June 26, 2020 at 8:30 AM EDT
  • By David Zinberg, Bids.com
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After safer-at-home mandates and social distancing protocols forced many brick-and-mortar retailers to shut their doors, consumers have redirected their discretionary spending habits away from vacations, dining out and cosmetic extras like facials and haircuts and toward the online retail space. As a result, e-Commerce is now soaring, with a report from Salesforce indicating that in Q1 2020, the volume of unique digital shoppers has increased by 40% compared to the same period in 2019. The report also states that this growth has even outperformed the pre-COVID-19 holiday shopping season, which until now was viewed as a very strong season.

As such, it’s fast becoming clear that retailers that have fully embraced e-Commerce as part of their sales strategy are better equipped to weather the COVID-19 storm. But what does this mean for the brick-and-mortar retailers late to adopt an e-Commerce strategy? And what does this mean for the future of in-store retail as a whole?

The Decline Of Half Online, Half In-Store

The unprecedented spread of COVID-19 has thrown retailers at all ends of the spectrum into a tailspin, with those most equipped for the pandemic proving to be stores that are either completely online, or those with showroom-style brick-and-mortar locations like Modcloth or Jack Erwin. These brands offer consumers the opportunity to try on or trial products in person before directing them to complete the final purchase online.

While it was considered good business sense in a pre-pandemic world to offer a combination of in-store and online purchase options, the COVID-19 crisis may be the catalyst in forcing these brands to focus on solely online sales, and we’re already starting to see the shift. Well-renowned retailers like JCPenney have been forced to close over 100 stores in an effort to redirect resources to their flagship stores and e-Commerce, and smaller retailers like Naples Soap have completely closed their retail locations and moved entirely online — seeing their sales grow threefold as a result.

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With this in mind, it’s likely that more and more nonessential retail stores will permanently close down their brick-and-mortar locations throughout the course of COVID-19, with no plans to reopen after the pandemic is over.

A Silver Lining

While the pandemic has thrown a wrench into the annual brick-and-mortar retail cycle, it’s also highlighted the brands that have the ability to quickly pivot and create innovative marketing measures to retain customers and even increase sales. In fact, an analysis from Measured has identified that the brands that have aggressively pushed ahead with new marketing and promotions throughout the pandemic are seeing unprecedented year-over-year sales growth, with sales figures seeing a 70% increase when compared to the same time in 2019.

Brands like Faherty, which are donating 2% of sales to COVID-19, and Madewell, which have donated 75,000 single-use face masks to healthcare providers, are reaping the rewards of these innovative, and somewhat aggressive, marketing strategies — with Faherty’s sales figures growing more than 50% in comparison to the same period in 2019. These figures offer an important lesson: despite trying circumstances, if a brand can identify the silver lining, they can come through the other end relatively unscathed.

The Sole Option For Housebound Consumers

With available discretionary income and lots of time to kill, some consumers have explored purchases they would otherwise not have pursued online, like large-scale furniture upgrades or materials for home improvement projects. The reason for this shift in behavior is that consumers who were previously too nervous to purchase items without seeing them in person are now taking the leap of faith — especially if the returns policy is right — because they physically can’t visit stores to see items in person. Depending on their experiences, this push potentially means this consumer behavior will continue long-term.  

So what does this mean, exactly? With government officials promising a ‘return to normalcy’ is just around the corner, it’s likely that we’ll see a flurry of in-person customers the first week for either the novelty of in-person shopping, or to flood returns counters, and little to no foot traffic after that. This trend will be especially prevalent in larger cities, where travel and person-to-person interactions will likely remain restricted until a vaccine becomes available.

Mom And Pop Retailers: A New Opportunity

Smaller retailers like specialty shops, small hardware stores and other mom-and-pop shops that create jobs and lend unique character to cities have been hit especially hard by both COVID-19 restrictions and the recent riots. Some projections even suggest that as many as 75% will not survive the current set of crises. With riots causing chaos and destruction, online stores become a safe and convenient place for consumers.

While both COVID-19 and the riots may drive more customers away from physical shopping experiences and onto online platforms, a potential opportunity for the smaller players is revealed. With fewer physical big box retailers in operation, we could see a proliferation of mom-and-pop style stores begin to dominate the in-person retail landscape. However, to forge this future, it’s imperative that shoppers recognize the importance of prioritizing these smaller stores over big box retailers, to aid mom-and-pop retailers to survive in the long-term.


David Zinberg is CEO and Founder of Bids.com. He rose from a pawnbroker to become chief executive of a successful online retailer site. He has over three decades of experience in the jewelry, merchandising and online auction marketplace, and has aggregated the most effective e-Commerce trading strategies so that buyers and sellers have an unparalleled online selling and shopping experience. Zinberg is an accomplished domestic and international multi-business CEO/founder with a proven track record of raising notable amounts of financing for business ventures. Bids.com recently announced the completion of its first round of funding.

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