At the beginning of the pandemic, it looked like online retail would collapse, similar to stationary retail, during the Corona crisis. But the opposite is the case: Corona has given online retail a strong growth spurt. In particular, everyday goods have been increasingly bought online since the crisis.
These include groceries, drugstore products and pet supplies. And that, although drugstores and supermarkets, delicatessens and pet and pet supplies stores remained open during the Corona crisis. Experts assume a lasting development: “E-commerce has established itself as an additional supply infrastructure in the second quarter”, explains the managing director of the Federal Association of E-Commerce and Mail Order Germany eV
Growth In Numbers
Overall, the e-commerce sales increased from April to June compared to the previous year by a whopping 16.5 percent to over 20 billion euros. The big winners are online marketplaces like Amazon and eBay. Amazon’s sales jumped 40 percent to $ 88.9 billion in the second quarter. The profit even doubled to 5.2 billion – the highest value since 26 years of existence. eBay also grew strongly with sales of $ 2.9 billion (plus 18 percent). Profit increased 85 percent to $ 740 million compared to the same quarter last year.
Good News For Small Traders
But not only the super department stores benefit from the development. According to a survey by the French online advertising platform Criteo, almost every third consumer has discovered a new online shop for themselves. In the case of the younger generation Z, every second person. 77 percent of these consumers will continue to shop in their newly discovered online shops in the future. This is good news, especially for small retailers who have previously shied away from entering e-commerce. The virus works as a digitization accelerator and now is the right time for many retailers to shift their business to online sales or to start a completely new business in e-commerce in order to address new customer groups.
Entry Into E-commerce
Getting started in e-commerce is not child’s play, even if this is suggested by the large number of inexpensive ready-to-use shop systems. In Germany alone, around 500,000 online shops vie for customer favor. Including a number of “garage shops” that hardly differ from one another and will disappear from the scene over the next few years. The pressure of comparability, prices, availability and delivery speed is too great.
The chances of survival of an online shop increase if the following requirements are met: a clear niche strategy, a digital management team and excellent processes. In the transparent Internet, it is difficult even for the second best in a segment or a niche to convince the customer to buy. The competitor is only a mouse click away and offers, Compare prices and delivery speeds quickly.
Differentiating yourself from the competition by means of a product alone is not very promising – unless the retailer is also the manufacturer. Rather, it is important to avoid comparability with other dealers. For example, through specializations such as “We are the time trial bike experts” or additional service, repair or delivery options á la “We’ll get you every component” or “We’ll assemble your bike for you”.
There are two basic options for getting started in digital trading: Participation in an online marketplace or (and) your own online shop. Your own shop offers significantly more options for design than a marketplace, but it is also associated with significantly higher investments, especially if the launch is to go off quickly. Once your own online shop has been set up, it must be properly marketed. Often this topic is not recognized in its challenge and the costs are calculated incorrectly. The sun places on Google are highly competitive and visibility in the social web does not come for free. Free virality is an illusion.
Marketplaces Continue To Advance
Marketplaces continue to gain in importance and account for the lion’s share of e-commerce sales: Amazon alone generates 70 percent. Such super department stores offer the technological prerequisites so that the customer can search and shop comfortably. The development is similar to the concentration processes in stationary retail. Marketplaces are the fastest way to start selling online, offer legal security and simple fulfillment processes.
This makes them an interesting option, especially for small traders in the Corona period. Dealers can sell goods here without having to set up their own shop. The truth, however, also means that the sale of the entire range is not worthwhile, as the commission to the marketplaces eats up the already low margins.
Regardless of which model the retailer chooses: It is important to have a well-thought-out strategy in order to differentiate yourself from the competition. You also need a sustainable marketing concept and staying power: If the online shop is live, it can take years for the investment to pay for itself.
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