Why Covid-19 Is a Shot in the Arm for Digital e-Commerce Companies | Quantzig

May 8, 2020

Non store retailing

The enforcement of social distancing norms, travel bans, government-imposed lockdowns, and other measures to flatten the curve have resulted in a sudden surge in online shoppers across geographies. This, in turn, has spiked online B2C sales and has increased the popularity of business-to-business (B2B) e-commerce platforms. Quite notably, the rise in sales of digital e-commerce companies is driven by the high demand for daily essentials, medical supplies, and other personal hygiene goods such as masks, sanitizers, and PPEs.

How COVID-19 has Adversely Impacted the Digital e-Commerce Sector?

While digital e-commerce companies are witnessing high demand across online channels, it’s crucial to note that the same factors which have increased sales have also adversely impacted operations in certain parts of their supply chains. Supply chain disruptions induced by the COVID-19 crisis have given rise to several last-mile delivery challenges that have prompted digital e-commerce companies to delay and cancel orders over the past few months, resulting in a decline in customer satisfaction rates. Several other challenges faced by players in the digital e-commerce industry have further been amplified due to the pandemic.

Our analytics experts possess the domain knowledge and industry expertise required to analyze the current e-commerce market scenario. Request a FREE proposal to learn how we can help you navigate the crisis.

Challenges Facing Digital e-Commerce Companies

Coronavirus induced challenges in the digital ecommerce industry revolve around the following factors:

  • Demand Surges
  • Price gouging 
  • Product safety concerns
  • Cybercrimes
  • Bandwidth issues
  • Last mile logistics

How Quantzig Can Help Digital e-Commerce Companies Navigate the Crisis

The sudden demand surges in certain product categories have severely impacted leading digital ecommerce companies, mostly because a majority of these companies follow drop shipping fulfillment methodologies.

#1 Demand Surges & Drop Shipping Challenges

Quantzig’s demand forecasting framework leverages 40+ statistical techniques and proprietary algorithms that help automate demand forecasts for different product categories using machine learning-based selection of appropriate techniques. Adopting such an approach can help digital e-commerce companies to better plan their delivery schedules and optimize routes to ensure OTIF deliveries and enhance customer satisfaction rates.

#2 Inventory Stockouts

Ensuring OTIF deliveries and avoiding order cancellations due to inventory stockouts has turned out to be a major concern for leading digital e-commerce companies that are witnessing high demand due to the COVID-19 crisis. In the current business milieu, several factors have been identified to be major contributors to inventory stockouts. However, buffer inventory optimization turns out to be the key to avoiding such events that occur during a crisis. Quantzig’s buffer inventory optimization solutions are designed to help its clients tackle such challenges and operate smoothly by maintaining a minimum volume of stocks as a buffer for every high demand product category. This, in turn, can help digital e-commerce companies to adopt a holistic approach that focuses on mapping region-warehouse-SKU priority at a region/location level to fulfill orders and improve service levels.

In times like these, the value provided by demand forecasting and inventory optimization plays a crucial role in driving positive outcomes.  Contact our analytics experts for personalized recommendations and e-commerce industry insights.

#3 Location Prioritization

At times like these, it’s crucial to prioritize store and warehouse locations based on the impact and demand in specific regions. Quantzig’s location prioritization analysis can enable the e-commerce industry to better manage product prioritization, inventory, and logistics more precisely by forecasting demand and predicting sales outcomes from specific locations.

Based on our analysis, the implications of the COVID-19 pandemic are expected to last for an indefinite period, and digital e-commerce majors offering goods and services will need to continue to adapt to the new normal and realign their business structure to function effectively. Though e-commerce can be an instrumental revenue-driving tool at times of crisis, one cannot afford to overlook the vulnerabilities in the e-commerce supply chains.

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