Amazon vs. Coronavirus: The effect of Coronavirus on the supply chain of e-commerce

Amazon vs. Coronavirus: The effect of Coronavirus on the supply chain of e-commerce

First of all, we hope you that you and your family and loved ones are well.

At Amazing | Amazon Data Driven Agency we work with top level brands managing and optimizing their advertising and contents on Amazon. Thanks to our know-how we know that in this alarming situation is more important than ever to adapt quickly and quickly to the drastic changes that all of us are suffering on Amazon.

As Amazon Centric agency we are receiving many questions about the evolution of the platform, both in Spain and in other countries. As there is a lot of daily information about it and much of it is confusing, we have decided to make a special about it, which we will feed periodically, in order to put some coherence, sense and order to everything related to sales and marketing on Amazon and the circumstances we are living.

How is Coronavirus affecting e-commerce supply chains?

The confined circumstances are forcing thousands of people to change their way of shopping and, consequently, their relationship with the market and its brands is also changing. This is a reality check for all those manufacturers who, being able to do so, still do not sell online. At the same time, the management and logistics capacity of a part of the online market is being put to the test, in the face of growing demand for certain needs and the management of a crisis that is forcing them to manage storage and distribution with distancing measures.

In our daily tasks, w have gone frome going to the office to teleworking, from shopping in stores to buying online, from going to the supermarket to doing the shopping at Prime Now (Amazon) or other marketplaces. We have been forced to become more digital. However, for those who are most vulnerable to the pandemic, the use of online shopping is a great opportunity, as they are not forced to travel to large supermarket chains or neighborhood stores. The situation we are experiencing shows us the true importance of the existence of online marketplaces, and especially those that can really take care of the growing demand, such as Amazon.

Many of the online services offered were not dimensioned for such demand. Online shopping has increased by 55% in recent weeks. This saturation can be seen when accessing the online platforms of some supermarket chains, or by checking how long it takes to serve the orders. Some department stores have reorganised their staff in other subsidiaries to be able to meet the high demand for online orders. Others, such as Amazon, have created more than 1,500 jobs for the different logistics platforms in order to provide service. And so there are countless examples of the readjustment of supply chains for the online market.

The saturation of the online services of the different platforms generally causes the following setbacks: delivery times that are too long from the date of the order, lack of availability of products, waiting times to be able to make purchases, poor stock rotation, not taking into account the expiry dates and lack of basic assortment, due to the large quantities of products that are being consumed. At Amazon the decision taken in the face of the crisis was to focus all its efforts on what consumers really needed, the essential products. The consideration of priority products is being made according to: customer demand, logistical capacity and health guidelines. Gradually Amazon is starting to add products or categories to the list of priority products in order to take steps towards market standardisation.

The supply chains of the different platforms are very tight. Merchandise flows need to be rethought, as they have no consumption history and purchases are being more impulsive than rational. In addition, consumption habits have changed during confinement, including the way in which the consumer receives the goods, since with Amazon, for example, there is no longer any physical contact with the delivery person.

Some manufacturers are taking advantage of the increased traffic on the platforms, to increase their investment in advertising, discounted promotions and giving facilities when changing the items.

For a marketplace like Amazon, confinement represents an opportunity to change consumer habits, especially for those who have generally preferred omnibus businesses close to their homes, but who are now beginning to explore the online shopping experience in a more continuous way.

But this situation is not only a challenge for marketplaces and consumers, but also for the manufacturing brands of essential products sectors (food, home and kitchen, pets, babies, etc.) that currently have to be prepared to face all the growing demand for their products.

The questions we must ask ourselves are: Will e-commerce manage to maintain the same number of users when this pandemic has passed or will they simply be seasonal users? What will be the new profile of consumers?

At Amazing | Amazon Data Driven Agency, our team of specialists at Amazon is helping brands of both essential and non-essential products to cope with the situation by advising and defining the necessary strategies for each brand.

 

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