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Covid-19 Impact on Online Business

In what are uncertain times, how can you adapt your online business to the impact of COVID-19?

It goes without saying that the current world climate is in an extraordinary situation. In what is an anxious, ever-changing environment, non-essential businesses have had to close down around the world and a majority of people have been urged (or forced) to work from home. The COVID-19 pandemic has affected us all permanently, and suddenly. 

There are immediate negative impacts… Healthcare systems are overwhelmed, jobs are lost, businesses are shut down (some forever), the economy is in a state of uncertainty, and many other aspects of society will be affected by this pandemic. One thing is for certain: things will change after this, making way for a new future. And it’s closer than we think. 

We’ve Bounced Back From This Before

The quote from Darwin is as applicable today as ever. No advice I have heard on how we as a people or as a business should handle these times is better than this quote. Identify and adapt to change while we live within our means and co-operatively work together to overcome both the health and economic threat!

It’s easy to worry about the current state of things and that worry is valid. But there is the potential to change things. Let’s quickly examine the state of business about 12 years ago: during the financial crisis of ‘08/’09, Bitcoin, Uber and AirBnB had all just begun and had yet to gain value. They were merely start-ups that hadn’t fully come to fruition. Now, AirBnb and Uber are both valued at over $33 billion and Bitcoin is worth around $106 billion. 

Twelve years ago, most of the well-known online companies that are now household names, were just ideas or start-ups at the time. Even back in 2003, Alibaba and JD.com grew in value after the SARS crisis. 

In times of crisis, we adapt to the state of things. Businesses are created, they change and grow, and can thrive if they change to the times. Newsletters like thehustle.co updated daily on the latest in tech business, highlighting those who are evolving to the times. It’s corners on the internet like this that are keen on showcasing the change-makers who are putting a positive impact on their industry. 

So what has been the impact to online business and where should we be looking for how to adapt…

Internet Traffic Has Had a Huge Change

Since self-isolation and quarantines have begun around the world, peak traffic has increased on average. With more people at home using the internet, traffic is like never before. 

However, some are noting that globally, internet traffic for certain industries have decreased, and competition for ad revenues decreased. 

Instead, a lot of internet traffic is geared to the current pandemic. In the last month, web searching has skyrocketed for key terms like “corona,” “lockdown,” and “social distancing,” all things that have only recently entered our daily vocabulary. In the US, the key trending search terms involve protective equipment like face masks and hand sanitizer. Pandemic has become the zeitgeist, but what is the impact of this? 

For the short term, major spikes in traffic will mainly revolve around COVID-19-related things, purchasing items, and media articles, as people mainly look for up-to-date info regarding the pandemic. 

However, in the long-term, certain industries will see trends in their internet traffic. E-commerce stores selling to customers online have the potential to continue staying open, even while working from home. Many brick and mortar stores have actually made the switch online as well, even selling on WeChat to those who were quarantined in China. This signals a change towards consumers making online their go-to method. 

Of course, the airline and travel industries will have one of the largest impacts, as airports and borders close down and general interest in travel comes to a halt. 

This begs the question, how has ecommerce and marketing reacted to this sudden change?

Display Advertising Needs to Go Where the Traffic Will Be

In what’s an unsure time, advertising has taken a hit even before the pandemic hit the Western hemisphere. 

On March 2, Publicis Groupe’s Zenith said it would lower its December prediction of a 4.3% rise in global ad spending this year due to COVID-19, according to the Wall Street Journal. 

That same day, New York Times CEO Mark Thompson said the Times “is seeing a slowdown in international and domestic advertising bookings, which we associate with uncertainty and anxiety about the virus,” and that the publisher now expects first-quarter digital advertising revenue to drop 10%. 

Ad revenue is changing from its typical industries and in response to this, marketing can make a shift to where consumers are going to go, moving to digital platforms. But there are significant winners and losers by industry. 

Think of where major internet traffic is going to go in the coming weeks, months other than general work: to online education, video streaming, various at-home hobbies like crafting, job search sites, discount retailers, at-home exercise. The activities people normally engage in offline will be making shifts to the web. 

And the ones who will struggle covers those that require a location or crowds, like traveling, luxury goods, sports, music, and live entertainment, to name a few. 

Marketing teams need to adapt to this and shift their content accordingly to regain revenue. Staying online is key. No one will be able to see the billboard outside, anyway. 

Website Buying & Selling

The general demand seems to be staying strong at the lower price. At MotionInvest.com, a business I own with partners that buys/sells websites, websites are still sold in hours and demand is staying steady. 

I had the opportunity speak with Emilia on this topic which she put on her YouTube channel…

This signifies that people are still looking to buy sites and grow in the online space.  And we’re not the only ones. EmpireFlippers saw record number of new weekly site listings earlier this month. 

Interest rates are going to be at or near zero. so-far a functioning financial system and significant stimulus packages issues by governments. Will all of that mean that money is easier to get than before, the search for yield and stock market volatility will mean there is a boom in debt financing at all price points in the website buying and selling industry?

My prediction is that the smaller and cheaper websites will increase in demand as more people rush to get into the online space. And the demand for larger sites that sell their products for higher prices might go down as less money becomes available to spend (but I could be 100% incorrect and it could be the complete opposite). More people will shift their focus on building sites to grow their value, rather than investing in larger sites. Whether this is a short-term or long-term change is unknown, but a strategy is key to surviving.

With these changes, multiples will be highly dependant on the availability of debt financing and if I had to bet with the data we have now I suspect will decrease in line with the rest of the stock market for the over $100k range and sub $100k will stay flat (but again I could be totally wrong!).

The Impact on E-commerce

This is e-commerce’s chance to prove just how fundamental it is in our society when we need it most. And companies have stepped up. One of the biggest, Amazon, recently hired 100,000 new workers and are temporarily pausing unloading of all non-essential products to keep up with the demand for goods. 

Online businesses will have a chance to thrive and are already seeing a huge spike in the countries most affected. 31% of Italian and 50% of Chinese consumers say they’re using e-commerce more frequently, in a poll by Ipsos MORI. 

Lockdowns disrupt the supply chain but that only puts more pressure on manufacturers and e-commerce to get the essentials out there. More people are shopping online but only for the essentials. E-commerce is affected by the supply chain now because it is becoming the core provider. 

Find A Problem Worth Solving!!! 

The key is to always keep moving and not be that guy who’s bulk-buying and reselling sanitizing wipes providing no additional utility in the world. Anyone trying to exploit the current economic situation will suffer because they’re prioritizing the short-term of benefiting themselves and not considering others during an incredibly sensitive time. Google and Facebook are already cracking down on this by banning resales and providing credible info linked on their homepages. 

So what will be some of the changes that we can look at…

High quality writers will become more available and interested in remote work.

Our knowledge on how to manage work remotely will become more of the norm and companies will be led to create working from home procedures and policies which will stay in place after the pandemic is over. I have always thought that the next recession would accelerate remote work, companies would ask why do we have an office. With a recession triggered by a pandemic that has forced remote work it will only accelerate that trend.

Specific industries could see a spike in demand after this, like the cleaning, food, and manufacturing of essential goods, as consumers go back to core values and realize these are what is needed and relied on when all else fails. 

And in an effort to keep things low-cost, marketing teams will have to come up with solutions to deliver a low-cost-efficient product to clients. For instance, ContentRefined is focusing on this strategy with its new offering from ContentLever (4 posts and social media management for $199/month). Online marketing will increase, and if we’ve learned anything from this, it’s that the internet is the essential medium we need to run industries and stay connected. 

At no point in most of our lives has the rate of problem creation been soo extreme. With so much mental capacity freed up due to layoffs, I am optimistic about the businesses that will be created to solve real problems and help the world.

The world needs entrepreneurs now more than any moment in recent history to identify and solve real problems!

Internally we have paused the development on one project to shift focus on a solution (that likely won’t make anything) but will help people – more on that soon.

Further Reading

COVID-19 And Its Effect On Bloggers And Web Publishers

With uncertainty the new norm, the coronavirus rattles the media industry

The economic effects of a pandemic

Google Trends: Coronavirus

Treasury Secretary Warns 20% Unemployment Rate Possible Without Coronavirus Stimulus Package

Amazon warehouses will stop accepting non-essential items amid COVID-19 outbreak

Amazon hiring 100,000 new distribution workers to keep up with online shopping surge caused by coronavirus

Coronavirus: Nasa images show China pollution clear amid slowdown

Unprecedented Uncertainty: How the Coronavirus Is Disrupting the Global Advertising Industry

What does the coronavirus mean for business?

How A Recession (might) Affect The Website Investing Space

https://www.wefunder.com/virus

About the Author Jon

I am a 33 year old husband, father of 3, engineer and a huge fan of developing systems to build useful and profitable websites. The reason I build online businesses is to provide financial independence for my family and yours AND so I can spend time outside skiing and biking with my family.
Jon Gillham, Online Entrepreneur

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