The quarantine has changed consumer habits: nearly a fifth will buy more online
The quarantine, that lasted for three months in Lithuania, not only has stimulated the business to reorient and to pay close attention to e-commerce, but has also changed consumer habits. A poll of Lithuanian population revealed that during the quarantine every fifth person bought more than usual online, and nearly a fifth of the respondents intends to continue buying more online. During this period, the scale of e-commerce in the Baltic States in general has increased by 80%, and consignment flows in Lithuania grew by 54%.
A poll of Lithuanian population, that was initiated by the Entrepreneurship and Export Development Agency “Enterprise Lithuania”, and customer analyses performed by the organization’s partners have revealed such trends of the quarantine.
Every fifth person buys online
A pole of Lithuanian population, that was carried out at the order of “Enterprise Lithuania”, showed that, during the quarantine, a fifth (20%) of the respondents started buying more online, a third (30%) of the respondents bought as much as before the quarantine, nearly a tenth (9%) bought less, and 41% of the respondents replied that they do not shop online at all.
“After the quarantine was announced, the usual routine of people was disrupted – most physical stores had to be closed, it became insecure visiting grocery stores and pharmacies. For this reason, e-commerce attained great significance. It can be seen from the results of the poll that even every fifth resident of our country started buying more online. Women bought a little more (22%) online than men (17%). We noticed that the residents of Lithuania of the age group between 26 and 35 years (33%) and of the age group between 18 and 25 years (28%), also those whose average monthly income is more than EUR 700 (34%) and the residents of the large cities of the country started buying online more often”, – Inga Juozapavičienė, the Head of the Entrepreneurship Department of “Enterprise Lithuania”, shares her insights.
According to I. Juozapavičienė, the fact that, during the quarantine, nearly every tenth person bought less than usual online may have been determined by changed working conditions, fears of a crisis, a desire to save for the future during this period. The results, showing that as many as 41% of the respondents do not shop online at all, are much more disturbing. This indicates that a part of the Lithuanian population still lacks skills in using digital technologies, people are still afraid of changes and innovation, and, at the same time, this shows the existence of a huge untapped e-commerce market in the domestic market.
Those who started buying more online indicated that they bought more often than usual online such products as beauty goods (35%), food and beverages (34%), household goods (33%), clothing, footwear or accessories (29%). Convenience (65%), cheapness (49%) and greater choice (31%) are the main reasons why people shop online. It is interesting that 17% of the country’s population think that online shopping is a modern and fashionable way of shopping. This is most common among the youngest respondents (of the age group between 18 and 25 years) of the poll.
Will further choose online shopping
It appears that the popularity of e-commerce, that has grown during the quarantine, will remain high even after the end of the quarantine – nearly a fifth of the respondents (17%) intends to continue buying more online, 73% of them will buy as much as before the quarantine, and 10% of the respondents decided that they will buy less. These changed trends in consumer behaviour were quickly noticed and the potential of e-commerce was appreciated by Lithuanian entrepreneurs.
Immediately after the quarantine was announced, “Enterprise Lithuania” launched a business support initiative “There is no online quarantine” and invited Lithuanian small and medium-sized business online stores to register in one place. In the first weeks alone more than 700 businesses have registered, and now there are almost twice as many businesses on this list of online stores – about 1,200. Every tenth online store is new, they were established during the period of the quarantine. Businesses realised that business development online is the only way to survive. Therefore, they have exhausted all possible channels so that they were more visible, consulted our team of mentors on various e-commerce issues, took advantage of special proposals prepared by the partners of the initiative, which made it possible to digitize business faster and easier“, – tells I. Juozapavičienė.
Online commerce grew by 80%
The analysis of the customer payment flow of the bank “Luminor”, which is the partner of the initiative “There is no online quarantine”, shows that, during the quarantine, cash settlements fell by as much as 30%, and, generally, e-commerce in the Baltic States increased by about 80%.
“The most significant growth is observed in Estonia and Lithuania. But this is because in Latvia, e-commerce was also common for the bank customers before the quarantine. It is impressive how quickly the business has been able to learn the quarantine lessons – a survey of small and medium-sized businesses conducted by “Luminor” bank shows that
more than 30% of entrepreneurs that are planning changes intend to expand their commerce online another 20% intend to exploit the benefits of social networks in raising awareness of their activities“, – says Diana Kačanauskaitė, the Head of the Department of Distance Sales to Business Customers.
Volumes of consignments exceeded the peak of the Christmas period
Gabrielius Bilevičius, the Sales and Marketing Manager for the Baltic States at “DPD Lithuania”, which is another partner of the initiative, tells that the increased number of e-commerce (B2C) customers, when business sends goods to the end user, was a fundamental change felt by the company.
“Before the quarantine, the ratio of business to customer (B2C) and business to business (B2B) customer segments was 30% and 70%, respectively, and during the quarantine, this ratio reversed to 40% and 60%, respectively. We doubt that the current ratio will remain in the long run after the end of the quarantine. However, we will probably not return to the same pre-quarantine stage either”, – G. Bilevičius shares his insights.
According to him, volumes of consignments reached the peak of the Christmas period already as early as the third week of the quarantine. In the fourth and fifth week of the quarantine, the flow of consignments continued to grow, it was 57% higher that usually. Even though, compared to the beginning of the quarantine, volumes of consignments should be already declining, they, however, still remain at a very high level.
Substantial mistakes during the quarantine
Although the quarantine has brought a huge number of new customers to the online space, who until then only shopped in physical stores, Jurgis Gylys, the Head of Business Digitalization at NFQ, which is the partner of the initiative “There is no online quarantine”, notes that these few months have also cleared up the fundamental problems of online businesses.
“During this period, we could see how online stores are able to handle huge order volumes, i. e. how they are able to manage their business processes so that a sudden increase in sales would not affect the quality of customer service and the customer would be provided service in a timely manner.
We, as the active participants of Lithuanian e-commerce, observed the market and saw that businesses, that failed to fulfil the abundance of incoming orders, only grew at the beginning during the quarantine, and later they permanently lost the dissatisfied customers.
Sometimes, if sales are growing solely because of the resulting circumstances, but competitors are growing much faster, that may show that mistakes are being made somewhere, not the business success“, – J. Gylys reveals his success.
According to him, it is essential to understand what the customer is like, what does the customer expect, to try empathizing the situation and habits. It is necessary to reflect on why the customer was accustomed to shopping in a physical store, what experience did he get there, did the customer need advice in choosing the goods. After answering these questions, it will be easier to find the right solutions for the development of a successful e-business.
At the order of “Enterprise Lithuania”, a poll of Lithuanian population was conducted by “Spinter tyrimai”. During the survey, 1,012 respondents aged 18 to 75 were interviewed throughout the country. The poll was conducted during the period from the 18th to 27th of May 2020.
There are 4 Contact Points operating in Lithuania: of services, products, construction products and regulated professions. They are intended: to help companies or individuals from another country to establish a business in Lithuania; to simplify the procedures of obtaining permits and licenses for service providers; to provide full information on the requirements that apply to the activities pursued by them; to ensure access by entrepreneurs to specific national rules intended for those wishing to supply products not regulated by the EU to the Lithuanian market.
On 25 September, the most promising Lithuanian and foreign startups will compete in the international competition “Startup Fair Pitch Battle” that will be held during the LOGIN Innovation and Technology Conference. Lithuanian Business Angel Network (LitBAN), the Co-investment Fund and the Venture Capital Fund 70 Ventures will look for investment opportunities at the Event. TRINITI business law firm has also set up cash prizes for legal services, and “Cloudvisor” will donate free credits of cloud computing services.