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The COVID-19 Effect on the E-commerce Vertical Market

How industries are choosing to respond, if they can at all, and how some thrived.

The coronavirus pandemic has made everything from revenue forecasts to marketing styles to scheduling employee vacations a bit of a mess. And while e-commerce has fared well compared to brick-and-mortar retailers, it hasn’t been easy for anyone.

Here’s a slice of who fared best and worst in the online vertical marketplace, and a few insights on what helped some increase market penetration.

 

Let’s get the bad news out of the way: diversified banks, retail real estate, and airlines suffered the most, and the forecast is still uncertain at best. Their models cater to niche markets that abhor empty storefronts, unpaid leases, and stay-at-home orders. You can’t expect low interest rates or booking a ridiculously cheap ticket to address the effects of a global pandemic on your bottom line if you can’t get people back to work or on planes.

 

Air travel remains at roughly half of its normal rate and vaccinations are increasing, so there are signs that a pent-up demand could spark a travel recovery this summer. The outlook for banks and retail real estate remains dire until late this year when stay-at-home orders and limited capacity venues might be a thing of the past.

 

Now for the sort of good news. Vertical e-commerce had some astounding outright winners over the last twelve months, but at what cost to other industries and how did they manage it? Did they create an integrated disaster response or rely on an infrastructure already in place and luck?

 

It is no surprise that software innovators were some of the top performers.  If you had tech that enabled or enhanced remote work and e-commerce for shuttered offices and brick-and-mortar store fronts, you saw huge gains at every level of your niche business. Having the resources available to meet high demand of your product or services was the key to success, and many did.

 

But it begs the question of whether your product was in the right place at the right time, and the moral conundrum of profiting off a deadly pandemic without also offering something more altruistic than a sales platform to suffering consumers. Unfortunately, these are concerns that only a post-COVID reflection can decide.

 

The other obvious winner was online retail. Everyone grew used to hearing the delivery truck outside and wondering whether it was the groceries or a new at-home printer arriving. E-commerce played a vital role in keeping economies from suffering greater damage.

 

Market penetration by some online retailers like streaming services was because we could not use commonplace venues like malls and theaters to spend our money. It remains to be seen if streaming a first-run film on television is a profitable angle given the still thorny subject of how ticket revenues and promotional fees are allocated.

 

All things considered, the e-commerce vertical marketplace forecast looks strong. Customers are not ready to give up in-person retail, but they do value convenience, so online retail will continue to present a good investment for businesses looking to prosper. Here is hoping it is under less dire circumstances.

 

 

Source: Industries Most and Least Impacted by COVID-19 from a Probability of Default Perspective – September 2020 Update
Industries Most Affected by Coronavirus (Top Performing and Hardest Hit)


Author: Greg.B

Executive with 25 years of proven success in revitalizing business units. Proven career record of producing
multimillion-dollar profits through pinpointing operational inefficiencies and encouraging the revitalization of
employee moral and corporate culture change.