Ecommerce and Coronavirus with Jason Somerville - a podcast by Michael Veazey

eCommerce and Corona Virus 
Global Wired Advisors are experienced M&A Advisors for digitally native enterprise

E-Commerce and Coronaviruswith Jason Somerville of Global Wired Advisors

Supply side effects of CoronavirusStarted in China - supply chain effect

A lot of ecommerce sellers and businesses had stocked up on inventory going into CNY - which mitigated supply chain issuesAs it spread into EU and USA it became a broader issue

Demand side effects of CoronavirusAs 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 marketseffects 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 sellersIt’s more an inventory management exercise to fulfil demand
Amazon FBA issuesLimit inbound
Deprioritise non essentialsRecession 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 isThere is a dramatic bounce say 50% of the depth of the left side
Then you enter into recovery periodThe shape of that will be driven by

How long the shutdown lastsEvery week matters
The longer it goes, the longer it takes to come backIt won’t be a 1-month bounce back to the usual economy
Government stimulus prog’s will also change itHow effective
How bigEg 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 shoppingMarket share shifts from traditional to online
This benefits a lot of ecomm businessWhat to expect for ecommerce after Coronavirus -in the economic recovery
stickiness is the key!This is bringing a lot of new customers to online shoppingIt’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 downturnDiscretionary 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 modelThe 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 canIn USA, a number of progs allow smaller progs to access liquidity for the businesses
The investment in the future you make now will pay dividendsBecause

This event is likely to affect consumer behaviour for the long termEcommerce businesses are a lot more attractive as an asset than historically




Get smart about stock managementIf you’re in a cat that you feel will take off after crisis, be ready!

Further episodes of 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.

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Website of Michael Veazey