Understanding e-Commerce in a Post-Pandemic World

The COVID-19 Crisis Has Changed Commerce As We Know It. Denmark In New York’s Jacob Shellenberger-Bessmann Explains How.

Health-scares. Lockdowns. Economic disruption. There are few areas of life that have remained unaffected by the COVID-19 pandemic and its sweeping aftereffects. Among them, of course, is commerce — the driver of our global economy and the unspoken underlining to our everyday interactions.

As millions of global citizens hunkered down amid stay-at-home orders, the hum of global trade registered a pronounced shift from the brick-and-mortar businesses that formed the bedrock of traditional shopping exploits to a rapidly expanding commercial sphere of digital interactions. A shift, analysts suggest, that now looks to become a permanent fixture of the consumer’s future.

During just one week of March, a third of all US consumers purchased food online and for 41% of them it was for the first time doing so,” says Jacob Shellenberger-Bessmann, Denmark In New York’s Deputy Head of Trade and Commercial Advisor in Multichannel Commerce.

“This development is expected to have lasting consequences post-pandemic, given the ease of continuing the buying behavior and the benefits thereof,” he adds.

Denmark in New York caught up with Jacob Shellenberger-Bessmann, ahead of his New Online Opportunities webinar to explore the profound implications of the COVID-19 crisis on e-commerce, discuss how Danish companies can gain from a new multichannel market, and hear what long-term trends he predicts we will see in a post-pandemic world.

Denmark in New York: Amazon. Wayfair. Alibaba. E-commerce has been on an undeniable upswing over the past decade, but the COVID-19 crisis has given the sector a significant amount of traction. How has the pandemic dramatically altered consumer buying habits?

Jacob Shellenberger-Bessmann: Over the last decade, e-commerce has had a significant impact on many industries and the COVID-19 pandemic has further accelerated this shift. The crisis has led new demographic groups of consumers to realize the benefits of e-commerce. As an example, during just one week of March, a third of all US consumers purchased food online and for 41% of them it was for the first time doing so. This development is expected to have lasting consequences post-pandemic, given the ease of continuing the buying behavior and the benefits thereof.

While this transition poses serious questions for traditional retailers, it also gives rise to new business opportunities for Danish companies looking to expand to new markets through online channels. What we have already seen during the crisis is that companies who have invested in e-commerce are currently not as badly affected as others. In fact, some companies have achieved increased sales during the crisis because they have been forced to focus and invest more in e-commerce as their traditional channels dwindle.

What long-term trends do you see emerging from this crisis?

Jacob Shellenberger-Bessmann: Food is one of the areas that has been most directly impacted by the crisis and, as a consequence, e-commerce sales in this area have exploded. April was a record-setting month for U.S. online grocery sales, which reached $5.3 billion. This represents a 37 percent growth over March, which was also a record month with $4 billion in sales. These shifts will have large, long-term consequences.

Out of a food and beverage industry of more than 1 trillion USD in the US, e-commerce accounts for “only” 2.6% in 2019 but is projected to be 3.5% in 2020. That is a small percentage but is it nearly $38 billion USD. Furthermore, the number of consumers buying food online has doubled in two years — from 23.1% in 2018 to 52% in 2020. We predict that this will be a long-term trend coming out of the crisis — online food purchasing will become the norm. This is something that Danish companies should get ready for and take advantage of.

“The number of consumers buying food online has doubled in two years,” says Denmark In New York’s Jacob Shellenberger-Bessmann.

The most obvious benefit that e-commerce offers is its potential reach which, it goes without saying, is much broader than your traditional brick-and-mortar store. What opportunities do you think will arise for Danish companies in e-commerce as they look to reach new markets in a post-pandemic world?

Jacob Shellenberger-Bessmann: We have engaged in partnerships with a number of e-commerce platforms with Amazon being the most important one in North America. Several studies have shown that more than half of online consumers search for specific products on Amazon first — and many do not even look for alternatives if they find the price reasonable. With such a market dominance, Amazon needs to be taken into account for a great number of Danish companies.

Furthermore, the marketplaces are a great way to easily test a new market and build sales before launching a true multi-channel strategy since the platforms provide convenient solutions and tools for most of the logistics, payments, fulfilment and digital marketing.

Can you give us an example of how some companies have leveraged this fast-paced shift towards e-commerce in innovative ways and produced impressive results?

Jacob Shellenberger-Bessmann: The crisis disrupted certain industries instantaneously due to the immediate restrictions to ensure social distancing. A lot of the B2B suppliers for the service industry suddenly lost their main revenue channel. However, some were incredibly fast at pivoting to take advantage of the new situation and lessen the blow of the shutdown.

Baldor, for instance, shifted from B2B to B2C delivery within just a few weeks. Another company from Denmark in New York was able to replace the third of their revenue that they lost from traditional channels by boosting their online channels.

Danish industry is a global leader in numerous fields, from Danish design to cleantech and life sciences. Are there specific fields within the Danish commercial pantheon that are better suited for e-commerce platforms?

Jacob Shellenberger-Bessmann: In addition to the food industry, design is another stronghold for Denmark that is well-suited for e-commerce. In just 10 years, online platforms have changed the global design and furniture markets and COVID-19 has only fueled this transition further. Many traditional retailers are facing harsh realities but there is also business opportunities for Danish companies looking to expand to new markets via e-commerce.

To take advantage of this trend, the Trade Council has partnered with Wayfair, one of the leading online platforms for furniture and design, to bolster export opportunities for Danish companies. Wayfair boasts over 100 million visits every month with 60% of its traffic coming from organic search. Given Denmark’s strong position within design, e-commerce has a lot of potential in the US.

How is Denmark In New York’s Trade team helping Danish companies make the best possible impact in this new multichannel market?

Jacob Shellenberger-Bessmann: Denmark In New York’s Trade team will act as your trusted advisor when entering a new market — whether you need help with market entry strategy, sales channel overview, legal establishment, localization of website, payments systems or market standards. Through our exclusive partnerships, we can help Danish companies get successfully on-boarded onto a platform or into a marketplace.

However, selling through a single online channel cannot stand alone. The recipe for long-term success for most companies lies in a true multichannel approach. In a market with ongoing technological advances, each channel is constantly subject to change. That is why all channels should be considered and used thoughtfully. After testing the US market through a platform, we assist many companies executing a more ambitious multichannel market entry.

Emilie Haaber Lynggaard is the Strategic Communications & Press intern at Denmark In New York.

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