After Hysteria Comes Hysteresis

#THEGREENECONOMIST

After Hysteria Comes Hysteresis

By Ivano Iannelli

CEO, Dubai Carbon

Hysteresis refers to the effects that persevere even after their causes have disappeared. In the case of COVID-19, hysteresis effects include the disruption of daily lives, forced consumer behaviours, and the collapse of markets. But the question of great matter is what will happen once the hysteria (the global pandemic) ends and what changes will we keep? 22 E-commerce has undoubtedly emerged as a light at the end of the tunnel for a great number of brands and businesses that, without the online platforms, would have had no other routes to market. Consumers globally have in general been quite skillful in switching to shopping online. This has resulted in e-commerce becoming a sharp focus for many brands and disrupted how they communicate with their customers. The success of both parties in engaging in online transactions should be leveraged by businesses moving forward and used to make plans on how to retain old and new customers. These plans should consider a number of aspects.

Firstly, invest, invest, and invest. Brand building, e-commerce, and performance marketing require capital. Brands who swiftly moved budgets from things like cancelled events to media and e-commerce

managed to take advantage of the shift. The choice of products on the digital aisles is practically unlimited. Developing your brand and targeting your consumers is crucial to positioning your products and services at the optimal eyelevel on the e-shelves.

Now, we have learned that e-commerce is not an option but rather a necessity. Growth in e-commerce has taken place in sectors that had already been dominant as well as in emerging ones. E-commerce used to be considered limited to younger buyers, but in fact young, old, rich, and poor have all shopped online for necessities since lockdown measures were implemented around the world. From this, businesses need to understand how to target the different demographics within their consumer bases and optimise the dynamics of their brands.

E-commerce is a value chain, which like all other chains, is only as strong as its weakest link. This is problematic for brands who lack control, and it has in fact been happening since the crisis. Many businesses have had to depend on one single platform or distributor with no other route to get their products to the consumers. As e-commerce progresses, along with brands’ strategies, more points of sale providing multiple routes to market and reducing reliance on a single channel will proliferate. It is likely that direct-toconsumer (DTC) players will enter the open marketplace and that other brands pursue the DTC model more actively.

One more thing to consider is that when it comes down to consumer behaviour, we are the individual snowflakes we were made to believe to be as children. There is no average in e-commerce. Buying fast and buying slow cannot be simplified into a standard as some consumers increase the length of their purchase journeys whilst others simply carry out confirmation transactions. For brands, this means that an engaging brand experience at point of sale is important, but so is that throughout the customer’s journey online. As social beings, physical interaction cannot be eliminated and will have to be compensated even as social distancing continues. A website will no longer serve as a mere point of sale as it will grow into businesses’ brand worlds. Brand power will be derived from digital visibility on platforms and from consumers’ awareness throughout the purchase journey.

Businesses need to “ understand how to target the different demographics within their consumer bases and optimise the dynamics of their brands. “

complicated to set up. Many brands have proved this by setting up websites in a matter of days. It is probable that websites put together rapidly will not generate massive amounts in revenue, but it is a step into the right direction and an opening line into the e-commerce conversation. There are plenty of free website builders available to set up your own e-commerce platform.

E-commerce growth is the hysteresis which will prevail even in the post COVID-19 era. Brands failing to capitalise on the shift from physical to digital shopping, especially in categories already prominent online, and to deploy excess budgets to grow digital presence, will likely find themselves losing market shares to businesses that manage to adapt and optimise resources quickly and effectively. 23