Ecommerce and the Pandemic: 9 Trends and Learnings During Two Years of COVID-19
Between 2020 and 2022 we have seen a meteoric rise in the popularity of ecommerce. With shops closed during various lockdowns, more and more consumers found their way to the internet. What new opportunities and challenges have we seen for ecommerce during these pandemic years? Who benefitted? And which new trends and developments are here to stay? In the last months of 2021, ECC Poland organised an online debate to discuss the pandemic’s effect on (cross-border) ecommerce from both consumer and business perspectives.
Agustín Reyna
Director of Legal and Economic Affairs
The European Consumer Organisation
(BEUC)
Patrick Oppelt
Spokesperson
German E-commerce Directive
(E-Commerce-Verbindungsstelle Deutschland)
Jolanda Girzl
Senior Policy Counsel
The Swedish Trade Federation
(Svensk Handel)
James Waterworth
Director of EU Public Policy
Amazon.com
Wojciech Szczerba (Moderator)
Director
The European Consumer Center Poland
New players
1. New audiences benefit from finding their way to online shops
The share of people purchasing products online has been steadily increasing for years. The pandemic however, has caused an accelerated growth and has brought new audiences online. In 2020, 71% of the EU population made purchases online (opposed to 66% in 2019 and 64% in 2018).
Jolanda Girzl (Swedish Trade Federation): “Svensk Handel has done research and found the highest increase in online shopping in the segment of elderly consumers. Although Sweden did not go into a strict lockdown, many elderly consumers started shopping for groceries online, often with help from their children and grandchildren. The delivery and large online assortments are added bonusses for this group. Our expectation is that people who have crossed over to online shopping will continue to shop online, now that they have seen that this can be done safely when researched properly.”
Patrick Oppelt (German Ecommerce Directive): “Our ecommerce contact point receives feedback from both sides: consumer and trader. It should be noted that consumers definitely benefitted from the growing ecommerce sector during the pandemic, not just sellers.”
Agustín Reyna (European Consumer Organisation): “As member states had to restrict movement, consumers were forced to move online fulltime. For shopping, but for work and socialising as well. The question remains: will consumers go back to pre-pandemic scenarios once the pandemic is over? We say no. Ecommerce is here to stay.”
2: Lockdowns lead to new sellers and business formats
James Waterworth (Amazon): “We have seen that omnichannel retail is becoming more and more of a reality. New formats are increasingly popular. A third of these new formats involve a combination of a physical and online dimension. Think of combining an online order with a pick-up point at a physical location or returning items purchased online to a physical shop. Ordering and picking up groceries has seen an increase of 250% in some countries. Amazon is also making a move towards the physical world by opening 500 shops. As these formats become more intertwined, it will become harder to tell them apart.”
Patrick Oppelt (German Ecommerce Directive): “In these past few years we haven’t only seen growth with large ecommerce sellers, but with many new start-ups as well. It will be interesting to see if new online formats, such as food delivery services, will be able to survive outside of lockdown and restrictions.”
James Waterworth (Amazon): “Ecommerce has also enabled success for consumers, brands and merchants in more rural regions. We have for example seen a Polish sock brand on Amazon that in a short period of time has started selling in over 70 countries in the world.”
New problems
3: More ecommerce means more of the same problems
Agustín Reyna (European Consumer Organisation): “The pandemic exacerbated certain ecommerce problems that were already there, such as the sale of unsafe products online. Of course we saw many products with COVID-19 related claims. Some even promised to cure COVID. Threats like these online scams and unverified consumer reviews became more prominent during the pandemic.”
Patrick Oppelt (German Ecommerce Directive): “My opinion: overall growth will always mean an increase of problems as well. New shoppers will also mean new problems. However, the problems we saw were more or less the same as pre-pandemic problems, but on a larger scale.”
4: 2020 and 2021 saw situational scams and supply chain issues
James Waterworth (Amazon): “We saw two main problems regarding safe shopping during the pandemic: misleading product claims and unreasonable prices. Some sellers attempted to take advantage of the pandemic. This is not something Amazon wants, as such experiences will undermine customer and seller trust. Therefore Amazon introduced new measures to address fraud and price gouging attempts linked to the Covid-19 pandemic and this includes strict enforcement measures against sellers who fail to comply. Overall, only a small percentage are truly trying to commit fraud. We find these measures have been effective and products sold on Amazon are safe.”
Patrick Oppelt (German Ecommerce Directive): “Another problem that emerged during the pandemic was a disruption in the supply chain from China. Cases where consumers wanted redress caused issues for traders. This was not due to bad faith on the trader side, but due to global problems.”
Jolanda Girzl (Swedish Trade Federation): “In 2021 we also saw problems with regard to the cargo ship blocking the Suez Canal. A large Swedish furniture company had containers aboard the ship. Furthermore, we saw extreme price increases due to, for example, containers getting stuck in China. Consumer demands could not be satisfied as deliveries were delayed and goods could not be delivered on time. Also, businesses could not give consumers what they wanted in some cases due to limited supply.”
Patrick Oppelt (German Ecommerce Directive): “And let’s not forget about Brexit. This meant yet another disrupted supply chain. Consumers were not able to order what they wanted, mainly electronic products. Scam websites abused the situation by offering unobtainable products at high prices. We saw the same thing at the start of the pandemic: masks and hygienic gels were in high demand. Consumers would see a product on social media but did not know how to check if the product was real. Our challenge was to educate consumers. More advanced consumers also came to us with questions: can I buy facemasks from this website? Does this website look trustworthy? In many cases, though, it was already too late.”
New Solutions
5: Regaining consumer confidence is key
James Waterworth (Amazon): “Like I said, it is important that we are constantly on the lookout for new types of scams. For consumers, shopping with trusted retailers is imperative. It is a top of the list priority according to Europol guidelines for safe shopping. Amazon reimburses customers if they are unable to solve their issue with the sellers. We make sure that Amazon responds in cases where the third party seller does not. In the past two years being a trusted retailer has become even more important than before.”
Patrick Oppelt (German Ecommerce Directive): “The pandemic has made people hesitant, for example when it comes to booking travel. When all travel was cancelled due to COVID, consumers did not know how to get their money back. It proved a real challenge for this sector to regain consumers’ confidence and to convince people to travel again. Airlines started offering free cancellations, new insurance products emerged allowing travellers to cancel their trip in case they or their family members got sick: the pandemic led to new solutions that we had never seen before.”
6: Education, international cooperation and enforcement are needed
Jolanda Girzl (Swedish Trade Federation): “With everyone at home, consumers and businesses were actively phoning us for advice. Safe shopping is an education issue for both consumers and traders. During the pandemic we saw quite a few issues with counterfeit goods. Most of our members are small or medium sized companies. Some of these companies sold medical devices that turned out to be counterfeit. These companies thought they had the right documentation, but they did not, as the documentation turned out to be forged. Education is certainly an issue that works both ways.”
Agustín Reyna (European Consumer Organisation): “The solution always lies in a combination of measures. Education is important, but it is not a panacea. It is needed to make ecommerce more inclusive, for example towards the elderly and other communities, but you can’t always foresee all dangers that will present themselves. More needs to be done so that people not only feel protected, but so that they actually are protected by more consistent enforcement. European coordinated enforcement on issues such as dark pattens and misleading websites is important for both consumers and companies.”
Patrick Oppelt (German Ecommerce Directive): “Enforcement is very important. Not all countries know strong national enforcement, so we truly need to use the power that EU member states have together.”
James Waterworth (Amazon): “I think we all agree that digital sophistication is important for both consumers and retailers. Cooperation between consumer groups is also absolutely indispensable. The sharing of urgent cross-border fraud is vital to prevent unsafe listings. Together collective action can be taken, not just by one company, but by all companies selling the products that encounter issues.”
Jolanda Girzl (Swedish Trade Federation): “It is so important that we are talking about cooperation to receive more guidelines from the European Commission. This could help clarify grey areas for businesses as well as for consumers. At this moment we still see examples of how different rules in different EU members states can cause cross-border issues, like Spain’s decision to extend the right of withdrawal during the pandemic. The Commission and Member States must take measures to ensure a level playing field for EU companies.”
Other new developments
7. Focus on sustainability
Jolanda Girzl (Swedish Trade Federation): “It is important to consumers that companies work on sustainability and environmental issues. Consumers buy more local goods and sustainability is increasingly important.”
Agustín Reyna (European Consumer Organisation): “We have seen and identified in surveys that consumers put more focus on environmental considerations. Consumers are very concerned about climate matters, but do not necessarily trust the claims companies make about sustainability. Whenever consumers identify misleading claims, this leads to a lack of trust. Consumer behaviour however does not always tie in with their concerns, look at how successful SUV adverts are and at the amount of products ordered from China.”
8. Embracing new payments methods
Patrick Oppelt (German Ecommerce Directive): “Another trend we have seen is the rise of electronic paying methods. Before the pandemic, Germany was slow to embrace credit cards and Google Pay. Cash was king; Germans were wary of electronic payment technologies. During the pandemic we have finally started moving forward, since retailers and customers were trying to avoid contact with each other and thus preferred electronic paying methods.”
9. Growth in both luxury and second-hand markets
Jolanda Girzl (Swedish Trade Federation): “During the pandemic we saw a trend of increase in purchases from discount stores, but also of luxury products.”
Patrick Oppelt (German Ecommerce Directive): “On the other hand, the pandemic has affected the private sale market. When consumers were unable to buy the products they wanted in local shops, they moved online and to second-hand markets. We saw a continuation of this even after shops opened again due to the supply chain issues.”