Subscribe to the podcast that delivers in-depth conversations with industry leaders and innovators about the global trends reshaping the world of tomorrow. those in public care homes) and consumers that lack the required skills to participate in e-commerce. LinkedIn. And for now, flexibility, communication and sustainability top the wish list. allowing restaurants to increase their terrace space and creating additional biking lanes (e.g. For example, while in the United States the share of e-commerce in total retail had only slowly increased between the first quarter of 2018 and the first quarter of 2020 (from 9.6% to 11.8%), it spiked to 16.1% between the first and second quarter of 2020. based on loyalty schemes and customer accounts. To ensure an efficient e-commerce landscape that delivers for everyone, policy makers should further foster the enabling environment for online transactions in areas such as digital connectivity, (international) logistics and trade,7 including in digital goods and services. Humans are highly adaptable creatures, and we’ve seen great innovation across industries in light of the current pandemic. Reduce bottlenecks in the enabling environment for e-commerce, including areas such as connectivity, trade, logistics and postal services. Source: OECD’s elaboration based on Google Trends and Oxford COVID-19 Government Response Tracker. ← 4. The COVID-19 Emergency Eviction and Foreclosure Prevention Act places a moratorium on residential evictions until May 1, 2021 for tenants who have endured COVID-related hardship.. A new Micro-Cluster Strategy is addressing COVID-19 hot spots that have cropped up across the state. After brick and mortar stores around the country underwent lockdown, many retailers became concerned about their ability to ride out the challenging financial times posed by COVID-19. [1] OECD (2020), “COVID-19 and the retail sector: impact and policy responses”, OECD Policy Responses to Coronavirus (COVID-19), OECD Paris, http://www.oecd.org/coronavirus/policy-responses/covid-19-and-the-retail-sector-impact-and-policy-responses-371d7599/. For example, the elderly, a segment of the population that would particularly benefit from e-commerce-enabled physical distancing, have persistently been lagging behind in terms of e-commerce participation in many countries (OECD, 2019[4]). In Korea, where official statistics are available, the e-commerce transaction value rose by 15.8% between July 2019 and July 2020. To control the epidemic, the most important measure is to cut off opportunities for human-to-human transmission. To continue meeting heightened expectations, we’ll see e-commerce retailers consolidate their tech stack and streamline everything from marketplace channels and carrier management to inventory organization and automated, post-purchase customer communications. Since the outbreak of the COVID-19 crisis, UNCTAD’s E-Commerce and Digital Economy (ECDE) Programme has engaged with a diverse network of stakeholders and carried out a survey to better understand the magnitude of the impact on e-commerce businesses across developing countries and least developed countries (LDCs), identify key trends and challenges faced by e-commerce … Organisation for Economic, OECD Policy Responses to Coronavirus (COVID-19), The COVID-19 crisis is likely to have long-lasting effects on e-commerce, There has been a shift in demand from brick-and-mortar retail to e-commerce, Figure 2. Given that businesses will take some time to get back to the normal pace of a pre-Covid-19 era, we must ensure this survival. Relevant measures in this regard include targeted information campaigns, trust building initiatives, adult training, or public-private partnerships that target the participation of low-income households and those in rural areas. Despite the efforts of some governments to foster e-commerce during the COVID-19 crisis, persistent digital divides imply that not everyone has been able to participate. For example, the Japanese Ministry of Economy, Trade and Industry provides Interpretative Guidelines on Electronic Commerce and Information Property Trading since 2002, a good practice that could help to provide specific and simplified advice to firms transforming their business models in response to the COVID-19 crisis. Many countries have also conditioned the opening of stores on reserving dedicated shopping hours to vulnerable groups, a practice that could be extended to home delivery. Note by all the European Union Member States of the OECD and the European UnionThe Republic of Cyprus is recognised by all members of the United Nations with the exception of Turkey. For consumers, systemic challenges related to connectivity, financial inclusion, skills and trust (e.g. Most people with mild cases of Covid-19 will lose their sense of smell, but only for up to six months, a new study finds. Estimates therefore represent an upper bound. Corrigenda to publications may be found on line at: www.oecd.org/about/publishing/corrigenda.htm. Upfront transparency provided to customers when they visit a digital storefront can mitigate long-term, negative brand perception. As detailed above, the COVID-19 crisis accelerated an expansion of e-commerce towards new firms, customers and types of products. 27 member countries of the European Union. In Italy requirements became even stricter the 20th of March. Related platform-to-business regulation has, for example, been recently enacted in Japan and is being applied in the EU since July 2020.6. While much of this might sound obvious, the reality is that many retail brands don’t adhere to these customer experience basics. This is particularly relevant in times of the COVID-19 crisis, when firms have to adapt to limitations on physical interactions or supply chain disruptions, accommodating new business functions and logistics solutions, to ensure their economic survival. This work is published under the responsibility of the Secretary-General of the OECD. The credit card usage of around 10 million credit card holders in Japan suggests that the increase in the share of online purchases in credit card transactions was highest for users in their 60s (from 15.4% in January to 21.9% in March 2020) and those in their 70s (from 10.9% to 16.4%). Given the context of the COVID-19 epidemic and the development of e-commerce in China, it is of great significance to examine whether an external shock is likely to influence e-commerce adoption, especially regarding food purchase. digital security, privacy and consumer protection) have been brought into sharp relief. Image: Global X ETFs, US census Bureau, Adobe. A sample of 200 000 third-party Amazon vendors in the Unites States suggests that by April 2020 around 36% of merchants were inactive, an increase from around 28% in February.4 Particularly affected were sellers with less than 1 500 product listings (ASINs), while sellers with over 3 000 listings saw positive upswings. In the Unites States, for example, a surge in demand was observed for items related to personal protection (e.g. In 2017, the participation rate for SMEs in e-commerce was less than half the rate for large firms in a majority of OECD countries (OECD, 2019[4]). In contrast, total online sales over January to April 2020 remained almost constant compared to the same period in 2019 (+1.7%), after having grown significantly over 2018-19 (17.8%). For example, eBay.uk temporarily dropped registration fees for small sellers (up to 250 items), set up free listings promotions for established sellers and protected sellers from downgrades in their seller ratings due to late delivery or cancellation. The percentage remains almost as high (19%) among only the elderly (age 65+). COVID-19 has likely changed e-commerce forever, but meeting customer expectations remains the priority. As storefronts closed or reduced their hours, and a greater demand on the supply chain caused delays, many customers needed additional time to complete returns. This highlights how the COVID-19 crisis might have involved a shift in demand from small and specialised sellers to larger and diversified sellers. Japan, the United Kingdom and the United States) announced measures to reduce the financial burden associated with Internet access for particular consumer groups, including poor or young individuals (OECD, 2020[5]). Governments could also reduce uncertainty for firms, e.g. Anecdotal evidence from the outbreak of SARS in 2002 and 2003 suggests that the epidemic has been a core catalyst for the digital transformation of Chinese retail. Georgia Gov. Here’s why — and how — retailers can find success in the COVID-19 era of e-commerce. From social media to same-day shipping, successful retail brands chose to pivot and innovate to keep up with the competition. E-commerce in the time of COVID-19 This brief discusses how the COVID-19 crisis is accelerating an expansion of e-commerce towards new firms, customers and types of products, likely involving a long-term shift of e-commerce transactions from luxury goods and services to everyday necessities. The number of searches at this point in time was around 9 times higher than it was around 31 January 2020. What’s more, customers were hesitant to make returns in stores even when they began to reopen. [4] OECD (2019), Unpacking E-commerce: Business Models, Trends and Policies, OECD Publishing, Paris, https://doi.org/10.1787/23561431-en. Significant increases were observed for food services (66.3%), household goods (48%) and food and beverages (46.7%), whereas online transactions involving culture and leisure services or travel arrangement and transportation services declined significantly, by 67.8% and 51.6% respectively. Quarterly data are simple averages over monthly estimates. In Germany, online sales grew significantly for medicines and groceries, historically laggard sectors in terms of e-commerce, while overall online sales contracted by around 18 percent in March 2020 in comparison to the previous year (OECD, 2019[4]). A similar argument holds for a number of other players, many of which are only now establishing the foundation of an online sales infrastructure, as a response to loosening of confinement measures. ← 6. Accumulated sales of clothing products contracted by 16% compared to 2019, after significant growth from 2018-19 (23.7%). Governments can actively support this process. There has also been a significant increase in demand for many digital services (e.g. Significant and persistent gaps also remain for low-income households or individuals with low education, which is concerning given the decreasing costs of connectivity, the ubiquity of digital technologies and the increasing scope of products available online. Additionally, regulatory uncertainties about which rules to follow (e.g. While some demand shifts may be temporary, others are likely to have long-lasting effects. There's no rest for the weary, unfortunately, as the Covid-19 storm continues. This includes cafes, restaurants, museums or public swimming pools, which were required in some countries to introduce an online booking system to control the number of persons on their premises at a given point in time. Waitrose, Tesco, WholeFoods). Support the creation of innovative e-commerce business models, ensuring that regulatory frameworks remain flexible enough to accommodate combinations of online and offline business functions. Close existing digital divides among individuals, for example by expanding affordable and quality broadband to rural and underserved areas, enhancing financial inclusion, and fostering trust and the acquisition of skills to participate in e-commerce. Third-party fulfillment allows companies to scale operations to meet demand while storing inventory in locations that reduce transit time — thereby reducing fossil fuel emissions. To address this issue, governments could expand affordable and quality broadband to rural and underserved areas, enhance financial inclusion, and foster trust and the acquisition of skills to participate in e-commerce. regulatory sandboxes), which have been successfully used to test new technologies like drones and digital payment mechanisms. groceries). Some grocery merchants have reacted by reserving online grocery delivery slots for elderly and vulnerable shoppers or asking non-vulnerable shoppers to shop in-store in order to ease capacities for the vulnerable (e.g. During the COVID-19 crisis, governments and businesses in several countries (e.g. For Asian-Pacific countries, e-commerce had already increased significantly during the first quarter of 2020, while the increase occurred later in Europe and North America, namely after several OECD countries followed Italy’s example and introduced confinement measures within a short period of time of each other. 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