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Ecommerce and Coronavirus with Jason Somerville
Amazing FBA Amazon and ECommerce Podcast, for Amazon Private Label Sellers, Shopify, Magento or Woocommerce business owners, and other e-commerce sellers and digital entrepreneurs.
English - June 11, 2020 23:01 - 33 minutes - 30.4 MBEntrepreneurship Business Marketing Homepage Download Apple Podcasts Google Podcasts Overcast Castro Pocket Casts RSS feed
eCommerce and Corona Virus
Global Wired Advisors are experienced M & A Advisors for digitally native enterprise
E-Commerce and Coronavirus
with Jason Somerville of Global Wired Advisors
Supply side effects of Coronavirus
Started in China - supply chain effect
A lot of ecommerce sellers and businesses had stocked up on inventory going into CNY - which mitigated supply chain issues
As it spread into EU and USA it became a broader issue
Demand side effects of Coronavirus
As effects more acute, ecommerce has been affected
Quarantine or stay at home order, that’s when bigger picture effects really started.
Ecommerce has tended to be affected uniquely compared to others
Public Capital markets effects of lockdown
Mid march - stock market fell a lot. Business activity ground to a halt Except “essential” businesses
Rotating from Virus discussion to post virus discussion.
Ecommerce and Corona Virus
When people forced to stay home, many buy goods online.
Many other businesses eg travel, airlines, restaurants, local stores been effectively shut off from economic activity for over a month.
A lot of businesses that sell consumer goods that are “non essential”
A number of clients march sales 4X Q4 in 2019
Supply side challenges for eCommerce and Amazon sellers
It’s more an inventory management exercise to fulfil demand
Amazon FBA issues
Limit inbound
Deprioritise non essentials
Recession for eCommerce due to Coronavirus
Most e-commerce businesses don’t have the downward trend.
It’s more like a hockey stick!
Within bigger picture, there is a big downward push in sales and economic activity.
It’s not so much a V, it’s like a backwards checkmark.
So in the short term, the left side of the V is
There is a dramatic bounce say 50% of the depth of the left side
Then you enter into recovery period
The shape of that will be driven by
How long the shutdown lasts
Every week matters
The longer it goes, the longer it takes to come back
It won’t be a 1-month bounce back to the usual economy
Government stimulus prog’s will also change it
How effective
How big
Eg Federal Reserve etc. has tried hard but they’re inefficient, ham handed. Don’t always work the way they are supposed to work.
It’s not just how many $, it’s about how they are delivered.
ecommerce and Coronavirus short term
-short term shift to online shopping
Market share shifts from traditional to online
This benefits a lot of ecomm business
What to expect for ecommerce after Coronavirus -in the economic recovery
stickiness is the key!
This is bringing a lot of new customers to online shopping
It’s bringing those who were online already, into categories they would still purchase in a retail outlet
How sticky is that once economy starts to open up?
It won’t be 100% stickiness but it may be 30-40% of that demand stays around for the long term
Next factor - consumers damaged in downturn
Discretionary items usually go down in a recession
Luxury good or high end (premium)
these categories tend to go down first and sharpest
Then you move into a new consumer behaviour model
The changes in behaviour are correlated to depth and breadth of downturn
How to shore up the value of your ecommerce business as an asset?
Bucket 1 - if your ecommerce sales have reduced seriously during lockdown
Try to access as much liquidity as you possibly can
In USA, a number of progs allow smaller progs to access liquidity for the businesses
The investment in the future you make now will pay dividends
Because
This event is likely to affect consumer behaviour for the long term
Ecommerce businesses are a lot more attractive as an asset than historically
Get smart about stock management
If you’re in a cat that you feel will take off after crisis, be ready!