As the coronavirus continues to gain traction in the U.S.

, there have been signs of changing consumer

behavior. Self-quarantines and emerging consumer worry about public places will provide opportunities
for the e-commerce business to thrive over the next few months. As consumers turn to digital options as a
means to circumvent physical shopping environments, the change in behavior may impact longer-term
comportment. Consumer behavior is influenced by technological advancements, but also by
environmental, economic and sociological factors,  all three of which are evident with the current COVID-
19. 

Changes in shopping behavior based on circumstances or events have been seen with holiday
shopping. U.S. sales for e-commerce businesses rise sharply over the holiday time period by 2-3
percentage points as compared to non-holiday periods. The longer-term impact is that consumers who
purchase using e-commerce and mobile devices during the holiday season continue to use these
behaviors going forward and an increase in the percentage of digital sales is seen post-holiday. Andrew
Lipsman, principal analyst, eMarketer, states, “During the holiday, a time with more concentrated buying
activity, consumers spend more online creating a step-change, meaning the consumer may not return to
past behavior. We may see this type of similar behavior unfold over the next few months.” In Target’s
recent investor call, the company discussed how creating convenient ways for people to shop with pick-
up, drive-up and same-day delivery has changed the behavior of its shoppers creating higher spending
and a more loyal customer.

The percent of digital sales varies by category of business; electronics is at 42.7% whereas apparel is
28.9% and food and beverage at 3.2%. Consumers being home more than normal could drive e-
commerce sales in more specific categories like consumer product goods, grocery and staple items.
Amazon Prime may have a significant increase in membership as many products fall into these
categories. Grocery pick-up and delivery will have a short term boost and once the consumer has
purchased groceries online, they will be more likely to make future purchases in the same manner.
According to Lipsman, categories that may garner more sales in the short-term are books and streamed
video content, while declines may be seen in entertainment and restaurants. In Italy where the outbreak
of the virus has been more widely identified, locals are staying home and tourism has declined
sharply. The WSJ reports, “The (restaurant) sector could suffer a 20% drop in sales in the three months
through April across the country.” Tourism, fashion and luxury businesses would be severely impacted by
an extended reduction of local and foreign consumers in Italy.  

Disruptive events often lead to countervailing forces, according to Lipsman. Amazon may have an uptick
in demand based on the broad utilitarian products available whereas luxury brands may experience a
short-term decline as seen in the Chinese markets. The World Economic Forum reported, “The mobility
and work disruptions have led to marked declines in Chinese consumption, squeezing multinational
companies in several sectors including aviation, education abroad, infrastructure, tourism, entertainment,
hospitality, electronics, consumer and luxury goods.”

Categories more prone to increase during times of physical retraction of a population are health and
beauty, grocery and consumer product goods. Short-term discretionary spending on fashion merchandise
may decline while Americans look to make sure needed goods are well-stocked in their homes.  

With coronavirus cases increasing in the U.S., some product shortages have already become evident. For
example, many pharmacies across the world, including those in the U.S., are sold out of hand sanitizers.
This will prompt shoppers to search online for the products, again changing the shopping behavior of
some customers who have never bought these types of products online. 

In 2020, e-commerce is expected to represent 12% of total retail sales, however, a change in consumer
behavior in the first quarter of this year due to the coronavirus can impact the future quarters for 2020 and
have a profound impact on holiday sales. As the consumer’s comfort with online shopping becomes
higher and technology is more intuitive and ubiquitous, the digital side of the retail business may be
stepped up at a faster rate than previous projections.