Expected Impact Of Covid 19 Pandemic For Online Business

Impact of COVID-19 on online business [2Checkout Study]

Although some traders in certain eCommerce niches have seen increases in online sales since the COVID-19 pandemic began, many more have been affected by the pandemic and consider the overall situation a significant threat to their businesses.

Only a small proportion of traders (12%) who participated in a study conducted by 2Checkout estimate a positive impact in the context of the global situation caused by the COVID-19 pandemic.

Covid 19 Impact Scale Expected In Online Business
COVID 19 Impact Scale Expected In Online Business

Multimedia software manufacturers, middleware and some entertainment service providers are among the privileged, whose businesses have prospects for growth this year.

At the same time, almost a third of traders surveyed (32%) expects the current pandemic to have a significant negative impact on their business, an influence it hopes to mitigate with a well-developed crisis response plan.

The industries where such a major negative impact is predicted are those where the activity is directly related to production (management of production resources, electronics and hardware for consumers), but also those that depend on consumption habits that are now changing profoundly (marketing and advertising, human resources management).

Only 8% of study participants anticipate that the current global situation will run out of effects on their own businesses, and 21% believe that the effect will be minimal on this year’s revenues. The decrease in sales is expected to occur in several areas and in several markets.

Traders have also found it difficult to find new customers or sign a new contract (18%) and that everything happens much slower (17%).

While most of these challenges can be improved through better planning, some need better and more intensive communication between companies and current or potential customers.

#1. What challenges online companies face

Covid 19 Challenges For Businesses
Covid 19 Challenges For Businesses

#1.1 Slowing down sales

The most important challenge online traders face is slowing sales – 60% of respondents face this situation. The decrease in sales is expected to occur in several areas and in several markets.

Traders have also found it difficult to find new customers or sign a new contract (18%) and that everything happens much slower (17%). While most of these challenges can be improved through better planning, some need better and more intensive communication between companies and current or potential customers.

Companies in various fields are experiencing slowing sales. From production companies to communications agencies, all recorded a decrease in sales in the first half of the year. The struggle to find new customers is also a common problem in consulting, marketing and technology companies.

#1.2 Supply chain delays

Traders of electronics and hardware, physical goods, manufacturers and delivery managers are particularly faced with problems related to supply chain delays. 21% of them are late, with traders most affected by physical goods.

#1.3 Productivity

Labour productivity has also decreased, albeit to a lesser extent, in industries that have continued to operate even after the pandemic has been triggered. Call centres, software developers, and online content producers are most affected by this.

The different attitude of consumers, which often translates into refusals to pay or requests to return the money, is a problem reported by 15% of respondents, especially by traders selling digital goods, such as multimedia software or other software.

#2. What are now the priorities in Business?

Business Priorities For The Next Period
Business Priorities For The Next Period

#2.1 Launching new products and promotion campaigns

To deal with the new reality, traders are seriously considering launching new products (38%) promotional offers (39%). Promotional campaigns are an option, for example, for software manufacturers.

The development of new products is a solution for traders in areas such as communications or for legal service providers. In addition to developing new products and launching promotional campaigns, 28% of respondents will also prioritize strategies to upgrade and increase long-term profitability indicators.

#2.2 Increased customer retention rate

Loyalty and retention of existing customers are options taken into account by 24% of merchants, especially by desktop or Internet software manufacturers, hosting providers and middleware.

#2.3 Expanding into new markets

22% of respondents are non-conformists and indicate that they aim to expand their business in other markets in search of new customers. Companies that sell consumer electronics or provide online educational services show a particular interest in this approach.

#2.4 Optimization and marketing tactics

17% of survey respondents say they will take the opportunity to optimize the online customer experience while making orders.

At the same time, 13% of the online businesses that participated in the study say they aim to work on positioning, making new offers and pricing policy to adapt to the current, dynamically dynamic situation.

For more information on the survey findings, view the infographic on 2Checkout’s survey on Expected Impact of COVID-19 Pandemic for Online Business.

This report was based on a survey conducted in April and May 2020 on a global basis with 843 respondents from more than 50 countries around the world.

About 2Checkout

2Checkout is the leading all-in-one monetization platform for global businesses. It was built to help clients drive sales growth across channels and increase market share by simplifying the complexities of modern commerce like global payments, subscription billing, merchandising, taxes, compliance, and risk, so they stay focused on innovating their products and delivering exceptional customer experiences.

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