There is a lot of uncertainty in the global market right now due to COVID-19. Everybody has been impacted by it – on both a personal and professional level. Businesses are temporarily shutting their doors, people are required to self-isolate in their homes, and eCommerce stores are facing additional challenges to accommodate new demands.

We know there are many unknowns in this current situation for eCommerce businesses. Over the past few weeks, we’ve been analyzing reports covering the European eCommerce market and comparing that information with Arvato’s financial data. In doing this, we’ve uncovered some significant trends that could impact the shape of the eCommerce landscape for years to come.

In this article, we’ll share those trends along with a rundown of COVID-19’s short- and long-term impact on European eCommerce, what this means for merchants, and how eCommerce businesses can proactively respond to these changes.


What’s Been the Immediate Impact of COVID-19 on Traditional Retail and eCommerce Stores?

It’s crucial now more than ever to understand where your market is and how you are selling to them. So, let’s start by digging deeper into the current state of European eCommerce, and the impact COVID-19 is having on day-to-day operations.

Limitations in multiple European countries are impacting how consumers and businesses behave. Traditional retail in these countries is seeing a sharp decline, which isn’t surprising given that:

  • Offices across Europe are closing, and workers are being sent home.
  • Financial situations of both businesses and consumers are being reevaluated as everybody faces an uncertain length of disruption.
  • Perhaps the most obvious – consumers are staying home. They’re not going out to shop.

With all that in mind, it’s natural that foot traffic is dwindling. But the need for goods and services certainly hasn’t. Typical retail shoppers aren’t stopping their shopping habits – they’re just making those purchases online. As a result of COVID-19 shutting down retail stores and businesses across Europe, our data shows a dramatic increase in eCommerce transactions – upwards of 30% in some categories!

Now, it’s true that some of this increase is due to panic shopping. People are stocking up on supplies above and beyond what is recommended or necessary. Keep in mind that these striking online sales figures are short-term reactions rather than a sustainable trend, so don’t change your existing web store or product offerings as a response to this.


What Do These Short-Term Online Sales Increases Mean for the Long Term?

We know that the eCommerce numbers we’re seeing are a result of social bans and temporary closures of public stores. People are still shopping; they’re just doing it online right now. It makes sense to wonder then, won’t things go back to normal when these social bans are lifted?

In some areas, they will. But many of the changes we’re seeing in the way people are shopping will continue after the spread of COVID-19 has stopped, as will the new approaches both merchants and vendors are developing to accommodate them. This is the first step toward a substantial, long-term disruption to the eCommerce space.


What Does the Long-Term Impact from COVID-19 Mean for Merchants?

As traditional retail slows down, people are beginning to rely on eCommerce in ways they hadn’t before. Not only are existing consumers buying things online they had previously purchased at brick-and-mortar locations, but consumers who typically avoided the eCommerce space are now being forced to turn to the Internet to shop.

These developments are causing retail, web shops, and supply chains to reevaluate their priorities. And when multiple aspects of a business model begin to react to the same occurrence, so begins a shift to the status quo.

The bottom line is: Shoppers who never previously shopped online – or did so rarely – are now doing it regularly. And those habits form quickly. This new reliance on eCommerce will rapidly change the way the world shops… and we’re right in the middle of this evolution.


What’s Next? How Can eCommerce Merchants Be Proactive Right Now?

The precautions put in place by many European countries to slow the spread of COVID-19 have done more than temporarily increase online sales. People are forming online shopping habits right now that are likely to continue long after social bans are lifted, and brick-and-mortar stores reopen. Even those reluctant to turn to the Internet for shopping have entered the space.

What this means for eCommerce merchants is that now’s the time to make your online shopping experience as frictionless as possible for customers. This means optimizing your web store to meet the demands of these new online shoppers.

Unfortunately, there are no silver bullets to accomplish this. The best course of action is to take advantage of some of the ongoing trends that are starting to surface.


Here’s What Our Data Shows – And What You Can Do About It

  • There’s been a substantial shift in the top eCommerce categories over the past few weeks.
  • Unique customer purchases have increased.
  • We have seen a significant increase in the use of Payment-After-Delivery (PAD).

If you’re not familiar with PAD – also known as Open Invoice or Buy Now, Pay Later – it typically accounts for more than 40% of online revenue in some European countries. The use of this payment method has grown considerably over the last few weeks, with our data reflecting as much as a 30% increase in some eCommerce categories!

The most significant cause of this growth? We’re living in uncertain times. COVID-19 has impacted businesses across every industry. Right now, customers appreciate the added flexibility of 14-30-day payment terms, free payment pausing, and the ability to make payments in installments.

As we said, there is no guaranteed process your eCommerce store can take to capture new customers and see sustainable sales increases right now. However, keeping these trends in mind, you can consider branching out in the payment methods you accept.

If new shoppers are turning online – and current online shoppers are increasing spending – now’s the time to figure out what they need and offer it. Often, what they need is a payment method they’re familiar with and prefer over others. That might be credit or debit cards (standard in the U.S.) or PAD, which is standard in many European countries. By allowing online shoppers to make purchases with their preferred payment method now, you can secure more customers for the long-term. The landscape of eCommerce is changing – and you have a fantastic opportunity to be part of that future.

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