The COVID-19 pandemic is not just a health crisis, but an economic one. And it affects everyone, from the small farmers in South America to multinational companies, to up-and-coming business owners trying to jump-start their business online. To help slow down the spread of infection while waiting for the vaccines, governments around the world have imposed lockdowns, resulting in the closure of establishments and a deep global recession.
Fast-forward today, and health professionals have announced at least two vaccines: the Pfizer-BioNTech COVID-19 vaccine and Moderna’s COVID-19 vaccine, with two more in Phase 3 clinical trials. Although this serves as welcome news, a complete reset will not yet happen by the end of the year. The effects of the pandemic have been deep-seated, upending many businesses, and resulting in steep recessions in many countries. Online businesses are perfect examples of industries that have been transformed by the pandemic.
Short-Term Impact of the Pandemic on the Online Business
Doing business at a time of stress and uncertainty can be daunting. For example, during the economic recession in 2008, consumers looked for cheaper products as spending slowed down. This year, there was uncertainty because of the pandemic and it brought a change in customer behavior and spending habits. As individuals remain at their households due to lockdowns with movement limited, they’re left with no choice but to go online. So we can say that the pandemic has put the online business in the spotlight. In the short term, online businesses have become the go-to service providers for many consumers. Also, the pandemic has pushed small and medium-sized businesses to rethink their marketing strategies.
For businesses that don’t have an online presence, the COVID-19 pandemic pushed them to adapt and finally push with a plan to create an online business, a virtual equivalent of their brick-and-mortar shops. And for businesses that started their operations at the peak of the pandemic, the results were mixed to positive. For example, stores that sell baked goodies found the transition both helpful and challenging. Helpful because they found a new way to connect with their customers: through their website. This made it easier to market the baked goods, get orders, and send confirmation to customers.
However, it comes at a cost and some challenges. Setting up a fully-functional website requires the right investment and infrastructure. For example, there’s a need to purchase desktops, accessories, and other peripherals that are required to keep the online business running 24/7. And since this is the strategy as well for other entrepreneurs, some of these items like monitors, webcams, and microphones were out of stock or worse, sold at higher prices. The supply chain got even more complicated due to incoming trade from China that were affected by the pandemic.
But the pandemic was also a bright spot for some entrepreneurs.
Let’s take the case of Slothino Casino, a brand new gaming platform where you can play premium casino games from top vendors. Although no one has anticipated the pandemic, it still managed to create many possibilities for the team. As one of the Premier Gaming brands, Slothino tapped into a competitive market through creativity and commitment to players’ satisfaction. Due to the forced lockdowns and restrictions in movements, people were forced to be entertained at home with playing at casinos as one of the most popular. And Slothino was one of those websites that benefited from this shift in consumer behavior and choice of entertainment. But before the team scored the points, it also encountered a few bumps along the way.
The Slothino Casino Experience: An Opportunity and a Challenge
Slothino is one of those businesses that planned to open up this year. And the pandemic got in the way. The team soldiered on and completed the set-up with some setbacks and delays along the way. Since the work behind the site is now done from home and there are restrictions in place these resulted in delayed meetings and milestones that get postponed or moved for weeks or even months. For example, several meetings were delayed particularly in seeking approval from the Malta Gaming Authority (MGA) for a remote license and licenses too coming from software vendors and gaming operators. Also, there were backlogs in setting up the infrastructure of the website, particularly in setting up the specific payment methods per country. Traditionally, these meetings are done face-to-face. But with the pandemic getting in the way, the team sought creative ways to thresh out the details through virtual work and communication. The decision-making process was slower than normal and employees need to get used to the new working environment. It was a stressful way to set up an online casino, but it worked for the Slothino team.
In hindsight, the team realized some positive things from the experience. One, the setting up of the casino was successful and they benefited from this ‘new normal’. Upon launch, the website immediately gained traction and started to attract casino players and individuals who are looking for a different way to spend their leisure time online and fresh new bonuses and games. With more people staying at home and going online, the Slothino brand managed to gain a loyal following. Two, it joined the other brands from Premier Gaming Ltd in generating more views, increased membership, and income growth. And three, the experience proved a point that even at a time of uncertainty, any project is possible provided one is ready to respond and innovate.
This pandemic may have changed consumer behavior, but it managed to put the online business front and center. In the short-term, online businesses have found the validation that it badly requires: it’s a solid business model too and one that responds to customer needs.
Long-Term Impact of the Pandemic On the Online Business
The economic effects of the pandemic are here to stay, and even the top economic think-tanks agree. According to the Organization for Economic Co-operation and Development (OECD), the pandemic has changed the business landscape and consumer behavior. In its Policy Responses to the Coronavirus (COVID-19), it lists down at least three key messages: expansion of e-commerce to new firms, expansion of the scope of e-commerce, and these changes are long-term.
- Expansion of e-commerce to new firms. We may not be aware of this but the pandemic has created new markets for a variety of products and services. Before the start of the pandemic, we only know of a limited number of products and services that can be ordered or viewed online. However, the crisis created demands for products and services that can be enjoyed online despite the limited movement or contract restrictions. For example, you can now order your groceries or bottle of wine online.
- Expansion of the scope of e-commerce. There’s also an expansion of scope for many online businesses. This covers the establishment of new firms (think Slothino Casino), addition of new consumer segments (like for elderly), and addition of new products that can be requested and sold online (groceries, baked goods, medications). Also, there was a notable shift in e-commerce transactions in many countries, from luxury to everyday necessities. Before the pandemic, people shop online to purchase luxury goods or book a travel or a hotel. Today, we’re going online for the necessities because the pandemic has restricted our movements.
- Changes are for the long-term. The shift to online is not a passing trend, it’s the future of buying, selling, and consumption. Experts agree that online businesses and the motivation to shop online will remain. In light of the possibility of a new pandemic or a new surge in cases, the convenience of shopping online will remain popular among consumers. It will become part of the lifestyle of the general population.
Online businesses are treading a new ground that is full of challenges and pitfalls. However, it’s also a time for growth opportunities. As one writer says, ‘it was the best of times, it was the worst of times’. Indeed, the global pandemic has tested our limits, restricted our movements, and transformed the way we live. And for entrepreneurs, it changed the way businesses are conducted. It is up to the individual and the business owners how to capitalize on these changes and the creation of new markets.
Just like Slothino Casino, the team manages to set up the business at the right time. Although there were challenges and infrastructure developments along the way, it manages to stay on course and stays focused on what matters most: to deliver a premium service to its target consumers.