Is the Online Shopping Boom Going to Continue Post-Covid-19?
Demand for online delivery and products shipped to your doorstep has increased with the onset of the pandemic, as many consumers have been forced to work from home. Questions that beg to be answered are: what kind of people buy products online, is this shift in consumer behavior temporary or will continue post-Covid-19, and how has demand changed? Research from the Rensselaer Polytechnic Institute in New York offers some valuable insights that could aid international freight forwarders and policymakers.
According to associate professor Cara Wang, the vast majority of people (over 90 percent) would return to their old familiar ways of shopping. The reason is that the increase in online shopping is likely due to external disruption /Covid-19/ and not market competition. Once this factor is removed from the equation, the gains made by online businesses would fall off at least to some extent.
Building on computer modeling and surveys, professor Wang found that consumers fall in four categories: permanent new, temporary new, and prior adopters and non-adopters. Also, consumers mainly buy items in four product categories: home goods, food, groceries, and other items.
Additionally, the study suggests that the use of e-commerce and delivery services varies by product category. Grocery deliveries have the highest share while other or nonessential goods have the lowest share. What this means is that the health crisis has a more significant impact on essential goods purchases. And while grocery deliveries have skyrocketed by over 110 percent due to the 2-year pandemic, nearly 50 percent of new adopters are unlikely to be shopping online post-Covid-19.
Implications for Shipping Services
Researchers and transportation experts have shared the view that shoppers would still use e-commerce platforms once the pandemic is over. Yet, it becomes clear that the shift to digital and technology adoption are more complex and dynamic during crisis periods. Seniors aged 65+, for example, shifted to digital in increasing numbers while other risk groups such as disadvantaged minorities and low-income households fell behind, most likely due to lacking resources.
One explanation here is that the income gap widens during crises of such proportion, making it unlikely that low-income households would adopt online delivery services. This is mainly associated with the cost of delivery for small shipments, including driver tip, handling fee, service, fee, delivery fee, and so on. Due to the high cost of delivery, many low-income households would be left with no choice but shopping in-store even at the risk of infection.
The take for forwarders is that the increased demand for online deliveries is mainly associated with the pandemic. The popularity of online delivery is likely to be short-lived due to heterogenous shopper behavior. Not only there are shifts in consumer behavior during a pandemic but multiple factors play a role, including demographics such as age, ethnicity, and income level as well as psychographic factors such as behavior and perceived risk of infection.