25 Jun A Return to Normal-ish: Five Key E-Commerce Developments to Be Cognizant of in a Post-COVID World
As global vaccination rates improve and many governments relax or completely lift pandemic-era restrictions, some may rejoice in the so-called “return to normalcy.” It’s important to note, however, that the world has been irrevocably changed by COVID-19.
The material impacts of the pandemic are readily apparent – widespread personal losses, a transition to digital operations for businesses and online shopping for consumers, uncertainty about the future.
But long-term implications are not as obvious. The effects (and arguably some fringe benefits) of the global health crisis are still developing, and as the situation continues to evolve, so too will the consequences.
Redefining What’s Normal
It bears repeating that the resumption of “business as usual” is not necessarily indicative of a reversion to pre-COVID trends. In fact, there are several factors that will remain unchanged or will almost certainly play an increasingly important role in e-commerce moving forward.
Here are five key e-commerce developments to consider moving into the second half of 2021:
Skyrocketing E-commerce Adoption Rates
Last year, online businesses experienced unprecedented growth as millions of consumers transitioned to digital for the first time as a result of the pandemic. That upward trend continues today with no signs of slowing down.
Shopify’s annual e-commerce report states that 48.8% of consumers surveyed plan to continue shopping online more frequently after the outbreak is over. Additionally, Q1 2021 recorded a 39% growth in e-commerce sales, the second-highest increase since lockdown began. And some experts have speculated e-commerce will account for nearly a quarter of all global retail by 2024.
Increased Emphasis on Adaptable Infrastructure
Rapid growth demands greater agility and adaptability than ever before. In fact, many e-commerce sellers are already leveraging 3PLs and developing robust logistics networks to keep up with increasing demand. Expanded capacity to scale will prove critical to the future success of online businesses, just as it already has for businesses that thrived during the pandemic.
This necessitates developing diverse supply chains and logistics solutions, as well as establishing robust SOPs in case of unexpected interruptions. It’s impossible to prepare for every conceivable scenario, but advanced preparation of agile infrastructure can mitigate risk if the worst should come to pass.
Lower Barriers to Cultivating a Brand
Online companies are optimally positioned to leverage data science and digital marketing strategy to broaden exposure while increasing sales traffic. Proximity and compelling pricing are integral to the success of an e-commerce business. Legacy brands are dying and consequently, brand lifecycles are much shorter than in years past.
Moreover, establishing a clear brand identity is easier and much more straightforward than it is for traditional legacy brands. Identifying core values and consistently launching quality products in service of those values builds awareness and cultivates goodwill without the need to invest heavily in complex campaigns. Consider, for example, these companies that quickly rose to prominence using Instagram to promote their brand.
Evolving M&A Investment Criteria
Successful online and Amazon-based e-commerce businesses are in high demand and as new capital flows into the M&A marketplace, investment criteria will become increasingly stringent. Funds, private equity, and strategic acquirers will pay premium valuations for top-tier assets.
Consequently, it’s critical for entrepreneurs to build their businesses with a potential high-value M&A transaction in mind. Doing so empowers operators to strategically pursue short-term growth initiatives that improve revenue while creating additional value, thus making the company more attractive to prospective buyers.
Bright Outlook For E-commerce Businesses
The combination of new entrants in the space and ever-increasing sales traffic to online storefronts has created a unique opportunity for sellers to quickly scale their businesses or execute a high-value M&A transaction.
In either case, the increased attention and momentum generated for e-commerce businesses as a result of the pandemic isn’t going away anytime soon. There has never been a better time to own a digitally native or Amazon FBA brand.
Why It Matters
Rapidly increasing deal flow in the space and the influx of new prospective acquirers adds a layer of complexity to the M&A process. Selling your business is not something you should pursue alone – especially if you want to earn the maximum value for your e-commerce company.
An experienced M&A professional can guide you through each stage of a sophisticated process that will yield the optimal outcome. Most importantly, you can avoid the mistakes people have made by dealing directly with funds or aggregators.
While it’s an exciting time for e-commerce entrepreneurs and there is ample opportunity to achieve your strategic exit, you shouldn’t let your excitement supersede your best judgment. Retain superior representation that can help you secure the best possible deal, empowering you to achieve your ideal exit and pursue what comes next.
About Global Wired Advisors
Global Wired Advisors is here to help you sell your Digitally Native D2C or FBA business. We are Mergers and Acquisitions specialists with over 50 years of combined experience in selling online companies. Try our Free Value Estimation Tool and see what your business is worth.
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