Coronavirus’ Impact Highlights the Need to Invest in the Next Generation of eCommerce - For Now and For the Long Haul

Industry Trends
March 12, 2020

The news about COVID-19, the coronavirus that is upending daily life for many around the globe, is a constant right now. But surprisingly, not all the news is grim. Yes, we could list the many challenges like global supply issues from China or the lack of hand-sanitizer on store shelves. The impact on retailers will be significant - from foot traffic in stores to supply chain disruptions causing inventory gaps. While there is currently a bump in eCommerce from people stocking up on basics like toilet paper and sanitizers, the impact over the next two quarters will be significant.

What retailers will be seeing is a bump in eCommerce traffic, across most categories. More than a quarter of U.S. respondents already avoid crowded areas,  and 58% said they plan to if the outbreak worsens according to Coresight research, who also found that more than 40% say they are "avoiding or limiting visits to shopping centers/malls" and more than 30% are avoiding stores in general. In some cases the stores closed for business for the foreseeable future. We at Lily AI believe there are investments that, made today, could help maintain short-term revenue and drive long-term eCommerce success.

1. Invest in re-interpreting the in-store experience online.

While sales at stores are declining, IT investments in eCommerce are showing signs of motoring ahead. Why?  Because retailers are looking to offset expected declines in stores by capturing as much revenue online as possible. Key to this strategy is making it easy for customers to find what they want and extending the personalized experience to digital channels. How does a site learn about the person on the other side of the screen the way an in-store associate would? First by creating and applying dozens of deep product attributes to every product so every product is consistently tagged. Then as customers shop the site, by assessing customer behavior in real time to understand what they are looking for both at the moment and relative to past purchases. The result is recommendations that rival the in-person experience from site navigation to individualized recommendation. So when a customer needs to look great for a virtual executive meeting, her search results show “outfits that look great on video.” Brands that create and promote this personalized and curated online experience will drive more traffic to their online store, capture more sales, and keep customers looking their best on that next Zoom call. 

2. Use recommendations to manage supply challenges.

Traditional retailers have weathered abrupt changes to their business before, and have experience adapting to shifts in supply and demand. With production challenges in China that could last a while, it's important to make the most of what is in stock. While products sourced from the U.S. may be more expensive than those from overseas, the alternative message of “out of stock” will simply result in a lost sale.  Brands need to tune product recommendations to suggestions that fit the customer’s context on each visit and that they have on hand, so they don’t lose a sale and maximize turning the inventory they do have. 

3. For luxury brands, it's time to get serious about eCommerce (and leapfrog the existing state of the art).

Luxury brands historically relied on foot traffic in high-end malls and airports to drive sales. With fewer people walking by displays, some of that operating expense should go into defining an ecommerce experience that captures the emotion of buying a TUMI suitcase or Hermes scarf as brand-conscious consumers look to fill their closets but from their home computer. By investing in understanding the emotional context of your high-end customers, luxury brands can weather future business storms by creating an experience that rivals even the best of today’s  online retail experiences delivered by more established eCommerce players like Sephora and Amazon.

These are short term actions retailers can take that will lead to long-term positive business outcomes. Our retail customers were already seeing tremendous results before the coronavirus outbreak and they are now doubling down on e-commerce applications with more urgency than they had previously planned. We can have your hyper personalized and curated online experience up and running in under a month. With people working from home and traveling less for a minimum of the next 2-3 months, now is the time to act. Contact us at and we’ll get through these challenges together.

About Lily AI

One of the biggest unsolved challenges in e-commerce is how to replicate the in-store experience of being able to communicate the fit and feel of each product, and understand each customer's emotional context as they shop. Lily AI's Predictive Psychographics Platform uses AI to: 1) auto-tag product with the richest set of attributes possible, and 2) extract/predict the emotional context of each shopper using existing behavioral and clickstream data to 3) deliver highly relevant and individualized experiences on eCommerce sites via site search, filters & facets or product recommendations. In short, Lily AI helps brands to see customers as they see themselves. Lily AI’s customers range from big box stores to specialty brands, and full-line department stores to resale marketplaces. Lily AI has been able to demonstrate step change in conversion rates and sales.