A Changing Landscape for Online Players

Online retailers need to upgrade their business practices and automate processes so that they can react to and meet changes in both demand and competition.


While COVID-19’s disastrous impact on the world’s health can’t be underestimated, it has created a window of opportunity for pure online retail players. With millions of people around the world advised to stay in their home, online sales have skyrocketed. Amazon is adding 100,000 new employees to its workforce to meet the surge in online orders, while online retailers around the globe are filling order after online order.

I don’t believe this is a temporary change. We fully expected to see change in online retail to hit in 2025; coronavirus pushed the timeline up by nearly five years. As such, online retailers need to upgrade their business practices and automate processes so that they can react to and meet changes in both demand and competition.

A Growing Demand for Online Sales and Services

It shouldn’t be a surprise that citizens in all countries are turning to online vendors to provide their products and services. Heeding the call for social distancing to combat a contagious disease has increased the number of people shopping for everything – from groceries to workout equipment. Bloomberg reported the American’s are adopting ecommerce faster than ever, while the Financial Times reported that southern Europe is discovering digital shopping.

This increased demand is actually putting a strain on online businesses. A new study by Adobe Analytics, reported by the USA Today, found that more consumers are seeing out of stock messages when they go to place orders. Ocado supermarket, a UK-based online grocer, has seen its website and app crash multiple times under the weight of increased demand for their service.

Despite the speed bumps being experienced, it is clear that consumers are clamoring for an online shopping experience, and existing online players are best positioned to fill that demand.

A New Wave of Competitors

For now, offline retail is dead. Sure, some outlets will remain to serve limited functions and act as a lead generation tool for online stores, but for retailers to survive, they will need to shift their sales operations and sales budgets online. That means we are going to see a lot more competition in the online marketplace.

As a pure online player, you have a head start against offline and omnichannel retailers. These companies are going to need time to develop their web presence, and put their focus toward their new sales channel. You’ve already developed your online real estate, and have developed strategies to grow your traffic.

However, I believe these new online merchants will be fighting hard, and will be driven to catch up within a few months. Online players who want to stay ahead need to improve and automate their processes, which will help them stave off the new generation of online merchants.

Staying Ahead of the Game

In my experience, increased demand, heavier traffic volume and increased competition aren’t the only issues pure online players are dealing with. Retailers have the opportunity to increase the product lines they offer, develop market-based pricing, and develop better pricing strategies to prevent inventory shortages.

One area where online retailers are significantly stronger is their use of dynamic pricing. Having a system in place that can adjust prices on the fly based on competition, market forces, and inventory considerations ensures that these retailers always publish a price that’s designed to sell products.

To be clear, dynamic pricing is NOT about taking advantage of customers by presenting a high price. No reasonable person would advocate hurting consumers during a time of crisis. Putting aside the morality and legality of price gouging for a moment, taking advantage of consumers for a short-term profit would hurt your brand over the long term.

Rather, dynamic pricing is about presenting a competitive price designed to increase profits and sales. These prices, which are no longer constrained to match offline store prices, can adjust rapidly to meet the changing nature of the marketplace.

Looking Ahead

These changes taking place in the market aren’t short-term band-aids that will dissolve the minute a vaccine is developed for COVID-19. The changes in consumer and societal behavior were coming anyway, and simply arrived five years earlier than expected. The strategic moves online retailers make today to adjust to this reality will benefit their businesses for the long term.

To help businesses transition to this shift in consumer behavior, Quicklizard is offering a 2-day consulting session. Based on best practices that we’ve developed and implemented in the market, we can help you become a pure online player.


You might also like:

Pricing Optimization
Anat Oransky Lev, VP Marketing

Planning Your Pricing Strategy for the Holiday Season

The holiday season is a great time to boost your sales, but it also presents a unique challenge: how do you price your products differently when the demand for them is so high?

Price too high, and you miss sales and revenue. Price too low and your margins erode.

Read More »
Pricing Optimization
Pini Mandel, Co-Founder & CEO

Vertical: Dynamic pricing for DIY Retailers

DIY Retailers face fierce competition for sales and intense pressure to improve margins. While traditionally DIY retailers sell paints and tools, today they also compete in other categories selling anything from household goods to various types of electrical appliances.

Read More »
Pricing Optimization
Pini Mandel, Co-Founder & CEO

Vertical: Practices and Trends in Dynamic Pricing for Grocery Stores

Grocery stores today are under intense price pressure as a result of supply chain challenges, competition and rising costs. Knowing how to increase share of wallet among current customers and attract new customers has become critical to the survival of struggling grocery stores. A critical component of this process is instilling a favorable price-value image in the minds of consumers.

Read More »
Skip to content