Online trade boosts revenue: profiting from the pandemic

The Covid-19 pandemic has given a real boost to the digital transformation. Companies that have succeeded in shifting their business to digital models have found they can turn a profit even during these challenging times. Two studies, by the KPMG and the EHI Retail Institute in Cologne, looked into these effects. Their research into retail industries found that in just ten years, half of German fashion revenue has moved to online retail offers.

Plattling, April 12, 2021

Online trade boosts revenue: profiting from the pandemic

This trend has dramatically increased since the first lockdown of the Covid-19 pandemic – in other words, the coronavirus has accelerated digitalization in the retail sector. As businesses have been forced to close their doors, and with the prospect of further lockdowns looming permanently on the horizon, many companies hurriedly made the transition to digital business models.

Even small, stationary retailers responded quickly to the new situation by opening online shops, and are now profiting from contactless purchases. The result: the retail sector has seen a record-breaking boom. Figures from Germany's Federal Statistical Office indicate that the entire retail sector is enjoying a period of growth, and chalked up a year-on-year increase of 5.1 percent in 2020, despite – or because of – the pandemic.

Purchasing habits are changing

The clear winners from the pandemic are online and mail-order businesses: with sales up by 31.9%, there is no doubt that we are changing our buying habits. It’s no longer just the traditional clothing and kitchenware that people are buying online – internet purchases of essentials such as groceries and pet food are also booming.

This means that in future, enterprises that ignore the digital transformation will find themselves losing customers. E-commerce is just one of many components – and not only for companies targeting end consumers directly.

Providing digital platforms for customers is gaining importance in the B2B sector, too. For example, paper-based packaging manufacturer Smurfit Kappa launched its online shop in May 2020. Regular and new customers can now purchase packaging with just a few clicks, even down to tiny quantities.

New sales channels, new opportunities

In fact, the development of new, digital sales channels is merely the outline of a playing field on which enterprises are currently defining goalposts and markings for the future. Business consultants Deloitte investigated current digital trends. According to their paper, at present the key focus for most companies is to use their digital strategy to boost productivity. A robust technical infrastructure and ubiquitous digital processes are absolutely key to achieving this. The immediate measures – plans for business continuity and stabilizing business operations – must always be supported by forward-thinking, proactive measures. That is, enterprises need to be accelerating their digitalization plans in order to improve their resilience to challenges and crisis periods, while at the same time optimizing business processes.

Even before the pandemic took hold, companies with inconsistent, complicated processes struggled to retain customers and risked losing competitive advantages. However, the pandemic has sharpened this effect, and highlighted enterprises that can react quickly to new challenges and prepare themselves for future success. You can only act digitally if you think digitally. 

Contact our experts if you’d like to discuss the next steps for your digital strategy.

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Norbert Kytka, Headquarters Plattling