Boom, fizzle, BOOM: Navigating e-commerce in the post-pandemic world
Over the last couple of years, the e-commerce landscape has changed extraordinarily. The COVID-19 pandemic amplified e-commerce sales as consumers were forced to shop online due to lockdown restrictions. However, this rapid growth came to a halt after in-person shopping resumed. This resulted in multiple e-commerce companies laying off employees, including Amazon, which cut 27,000 jobs across 2022 and 2023, and Shopify, which laid off 10 per cent of its workforce in 2022.
The pandemic-era e-commerce boom may have ended, but the industry still shows promising growth and resilience.
Read ahead to learn about the past, present and future of the e-commerce landscape, including why many consumers are still gravitating toward e-commerce channels in a post-pandemic world.
The COVID boom
When the COVID-19 pandemic struck, most people were stuck inside due to local health restrictions that encouraged non-essential workers to stay home and avoid unnecessary travel. Despite in-person shopping stopping abruptly, consumer demand remained strong. The closure of brick-and-mortar retail outlets caused a massive surge in online shopping. In 2020, e-commerce sales in Canada grew more than 70 per cent. A year later, when public health guidelines loosened to encourage in-person activities, e-commerce sales only increased 14 per cent. Although the industry continues to grow, it is increasing at a more modest rate now.
Alex Nguyen, a Toronto-based dropshipping business owner, recalls the pandemic-era boom. He said that despite the negatives of the pandemic, he had never made more sales. He noted that most of his sales were driven organically and, for the most part, passively. However, his sales boom was short-lived because his business ebbs and flows depending on consumer demands.
Though dropshipping is a niche segment of the e-commerce industry, a similar increase in sales occurred across many other sectors, including electronics, books and gardening supplies.
Mobile commerce
Mobile commerce, or m-commerce, is a facet of e-commerce for mobile devices. In the first quarter of 2023, mobile devices generated 58 per cent of internet traffic. In Canada alone, there are almost 34 million smartphone users.
M-commerce is a new concept that has plenty of room to grow. According to Shopify, m-commerce will account for $620.97 billion of e-commerce sales in 2024, meaning consumers will make almost half of all e-commerce purchases on a mobile device.
M-commerce has various advantages, including enhanced user experience, easier store access for consumers and better cost-effectiveness for marketing strategies.
Nguyen explained that he regularly uses m-commerce, as many of his customers come from mobile shopping apps such as Amazon or Wish.
Artificial intelligence and augmented reality
Artificial intelligence (AI) has disrupted and transformed many industries around the globe, including e-commerce. Although these technologies are still new, they are expected to impact the e-commerce market significantly. According to an article by Tech Radar, when AI tools are integrated with e-commerce platforms, they can answer customer service requests, generate product images, optimize product listings and detect and prevent fraud.
Augmented reality (AR) shopping allows customers to interact with products in physical space via a smartphone, VR headset or AR glasses. Though this seems like science fiction, augmented reality has existed for several years and was popularized by the mobile game Pokémon GO.
One of the possible disadvantages of e-commerce is that, according to some research, many consumers prefer in-person shopping. A reason that some consumers prefer in-person shopping is being able to see and touch products. Augmented reality can allow consumers to see products in person in a physical space without leaving their homes. The VR and AR market was worth $28 billion in 2021 and is projected to grow to over $250 billion by 2028.
Grow with the times
E-commerce is constantly changing. Instead of viewing this as a frightening prospect, Nguyen suggests adapting to the times to try to leverage all the benefits. He tries to keep on top of all the trends so he can apply anything relevant to his business.
Consumers regularly shop on e-commerce platforms, and the habit is only expected to grow. PwC’s 2023 Global Insights Pulse Survey found that 62 per cent of global consumers use a mobile device to purchase goods at least once per month. Consumers prefer online shopping over brick-and-mortar retail because of the convenience, product availability, lower prices and the option to compare prices across retailers. The preference for online shopping is strong globally and is projected to grow consistently.
The pandemic may have boosted e-commerce sales, but the fact that they’ve continued to grow in a post-pandemic retail landscape demonstrates that e-commerce is here to stay. Monitor trends and changes in the e-commerce industry because, as the pandemic taught us, you never know when everything will change overnight.