Many marketing experts predict that e-commerce sales will only increase as COVID-19 infections soar, social distancing becomes standard practice, and more people choose-or are required-to stay home. However, sellers aren't so optimistic. In fact, 36% of sellers predict thein sales will actually decline due to supply chain issues, product shortages, shipping delays, and the potential for demand to drop as the economy fluctuates. Here's what sellers can expect during this turbulent time, as well as tips from e-commerce experts on how to protect your online business and make the most of this opportunity by connecting with your customers. There are a lot of unknowns right now: how far the coronavirus will spread, how the market will respond, and what the overall impact of the pandemic will be worldwide. Though no one truly knows what will happen, these predictions will give sellers an idea of what to expect. Almost half of retailers expect some economic downturn due to the pandemic. However, preliminary data from Quantum Metric shows that e-commerce has recently experienced an average revenue weekly growth rate increase of 52% and an 8.8% increase in conversion rates compared to a year ago. This may reflect a suddem increase in demand as more consumers turn to online shopping. Nearly 75% of U.S. internet users say they plan to avoid in-store shopping because of the pandemic. And with brick-and-mortar retail accounting for 85% of U.S. retail sales, this is shifting day-to-day shopping to online marketplaces. However, this increase in demand will cause other issues, which we'll explore in detail below. Overall, total retail traffic fell 9.1% last week, though, according to Morgan Stanley, and analysts don't believe that e-commerce will fully mitigate these declines. And while consumers are spending on essentials like groceries, sellers of nonessential goods have seen their sales drop by 40% to 60% on Amazon lately, as shoppers limit discretionary spending. With the popularity of Amazon Prime and its free two- day shipping, modern consumers expect fast delivery and will often opt for the product that will arrive fastest. But demands on inventory and shipping delays have made it difficult for even an e-commerce giant like Amazon to deliver on this promise. This means online shoppers are more likely to convert on products they need, even if they have longer delivery windows, to avoid going to brick-and-mortar stores, where inventory may be low on even nonexistent. This has both pros and cons. It's likely to bring in more paid search dollars. However, as supply chain issues increase, third-party sellers will look for ways to limit the impact, such as reducing ad spending. Reference: Ugino, M. (20200). Coronavirus Impact on Ecommerce: Is your store safe?. Adapted from https://www.business2community.com/ecommerce/coron. avirus-impact-on-ecommerce-is-your-store-safe- 02295819 Questions: Q.8. Summarize the case in your own words. 0.9. Explain the impact of Coronavirus on e-commerce.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Many marketing experts predict that e-commerce sales
will only increase as COVID-19 infections soar, social
distancing becomes standard practice, and more people
choose-or are required-to stay home. However, sellers
aren't so optimistic. In fact, 36% of sellers predict their
sales will actually decline due to supply chain issues,
product shortages, shipping delays, and the potential for
demand to drop as the economy fluctuates.
Here's what sellers can expect during this turbulent time,
as well as tips from e-commerce experts on how to
protect your online business and make the most of this
opportunity by connecting with your customers. There
are a lot of unknowns right now: how far the coronavirus
will spread, how the market will respond, and what the
overall impact of the pandemic will be worldwide.
Though no one truly knows what will happen, these
predictions will give sellers an idea of what to expect.
Almost half of retailers expect some economic downturn
due to the pandemic. However, preliminary data from
Quantum Metric shows that e-commerce has recently
experienced an average revenue weekly growth rate
increase of 52% and an 8.8% increase in conversion rates
compared to a year ago. This may reflect a sudden
increase in demand as more consumers turn to online
shopping. Nearly 75% of U.S. internet users say they
plan to avoid in-store shopping because of the pandemic.
And with brick-and-mortar retail accounting for 85% of
U.S. retail sales, this is shifting day-to-day shopping to
online marketplaces. However, this increase in demand
will cause other issues, which we'll explore in detail
below. Overall, total retail traffic fell 9.1% last week,
though, according to Morgan Stanley, and analysts don't
believe that e-commerce will fully mitigate these
declines. And while consumers are spending on
essentials like groceries, sellers of nonessential goods
have seen their sales drop by 40% to 60% on Amazon
lately, as shoppers limit discretionary spending.
With the popularity of Amazon Prime and its free two-
day shipping, modern consumers expect fast delivery and
will often opt for the product that will arrive fastest. But
demands on inventory and shipping delays have made it
difficult for even an e-commerce giant like Amazon to
deliver on this promise. This means online shoppers are
more likely to convert on products they need, even if
they have longer delivery windows, to avoid going to
brick-and-mortar stores, where inventory may be low or
even nonexistent. This has both pros and cons. It's likely
to bring in more paid search dollars. However, as supply
chain issues increase, third-party sellers will look for
ways to limit the impact, such as reducing ad spending.
Reference:
Ugino, M. (2020). Coronavirus Impact on Ecommerce: Is
your store safe?. Adapted from
https://www.business2community.com/ecommerce/coron
avirus-impact-on-ecommerce-is-your-store-safe-
02295819
Questions:
Q.8. Summarize the case in your own words.
Q.9. Explain the impact of Coronavirus on e-commerce.
Transcribed Image Text:Many marketing experts predict that e-commerce sales will only increase as COVID-19 infections soar, social distancing becomes standard practice, and more people choose-or are required-to stay home. However, sellers aren't so optimistic. In fact, 36% of sellers predict their sales will actually decline due to supply chain issues, product shortages, shipping delays, and the potential for demand to drop as the economy fluctuates. Here's what sellers can expect during this turbulent time, as well as tips from e-commerce experts on how to protect your online business and make the most of this opportunity by connecting with your customers. There are a lot of unknowns right now: how far the coronavirus will spread, how the market will respond, and what the overall impact of the pandemic will be worldwide. Though no one truly knows what will happen, these predictions will give sellers an idea of what to expect. Almost half of retailers expect some economic downturn due to the pandemic. However, preliminary data from Quantum Metric shows that e-commerce has recently experienced an average revenue weekly growth rate increase of 52% and an 8.8% increase in conversion rates compared to a year ago. This may reflect a sudden increase in demand as more consumers turn to online shopping. Nearly 75% of U.S. internet users say they plan to avoid in-store shopping because of the pandemic. And with brick-and-mortar retail accounting for 85% of U.S. retail sales, this is shifting day-to-day shopping to online marketplaces. However, this increase in demand will cause other issues, which we'll explore in detail below. Overall, total retail traffic fell 9.1% last week, though, according to Morgan Stanley, and analysts don't believe that e-commerce will fully mitigate these declines. And while consumers are spending on essentials like groceries, sellers of nonessential goods have seen their sales drop by 40% to 60% on Amazon lately, as shoppers limit discretionary spending. With the popularity of Amazon Prime and its free two- day shipping, modern consumers expect fast delivery and will often opt for the product that will arrive fastest. But demands on inventory and shipping delays have made it difficult for even an e-commerce giant like Amazon to deliver on this promise. This means online shoppers are more likely to convert on products they need, even if they have longer delivery windows, to avoid going to brick-and-mortar stores, where inventory may be low or even nonexistent. This has both pros and cons. It's likely to bring in more paid search dollars. However, as supply chain issues increase, third-party sellers will look for ways to limit the impact, such as reducing ad spending. Reference: Ugino, M. (2020). Coronavirus Impact on Ecommerce: Is your store safe?. Adapted from https://www.business2community.com/ecommerce/coron avirus-impact-on-ecommerce-is-your-store-safe- 02295819 Questions: Q.8. Summarize the case in your own words. Q.9. Explain the impact of Coronavirus on e-commerce.
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