E-commerce boom in South Florida
20 MAY 2020 | CATEGORIES: E-Commerce

By Juan M. Muñoz, (Artichoke CEO)

(4 min read)

The United States is experiencing difficult moments in the social and economic field created by the negative effects of the coronavirus. Although unemployment figures are through the roof and the vaccine is far away, there is hope for some e-commerce in South Florida.

A recent Ipso study, conducted in mid-March, indicates that 23% of Americans are changing the way they shop. In this sense, they state that they are using electronic stores more frequently to get products that they would normally have bought in a conventional store.

Experts in the field believe that a new reality is brewing amid coronavirus infection. This sudden change in the Americans lives, has fueled a surge in demand for online businesses in South Florida and the rest of the nation that could continue from now on.

Reasons for the rise of e-commerce in South Florida

The emergence of COVID-19 has put traditional businesses in check, which have suffered large losses or have had to give up. Due to the social distancing and the imposition of staying at home, the traffic of people in these shops has decreased a lot.

The consequence: an increase in demand for e-commerce, a market that flourishes due to the fear of contagion of this virus, of which we still know little. That is not all, online shopping grows stronger as 8 out of 10 adults over 60 no longer want to expose their health in malls and conventional stores.

An example of success: Chewy

After President Donald Trump announced the national state of emergency on March 12, Chewy’s sales rose 42.5% that week. In the following week, this Dania Beach company that sells pet products continued to grow a 38.7% more.

While this sounds impressive, the company has already been trending upward since late February. According to its CEO, Sumit Singh, this increase in sales will mean an annual variation of 35-37% in the first annual period compared to the previous year. This is because many customers are buying products online such as medicine and food for their pets. Sing also mentions that despite the devastating consequences of this pandemic, Chewy remains resilient.

These cases are being replicated across the country, being a clear example that people are shopping in online stores that they have never used, and others have increased their average ticket in their preferred e-commerce.

How do startups take advantage of demand?

Among the success stories during the current situation, we must mention the Arteza company. This arts and crafts supply store have a direct-to-consumer (D2C) sales model and has doubled its initial capital of $ 24 million.

Brenda Freeman, the CEO of this startup, comments that: “The longer we are at home, the greater the chances of changing our habits.” He also adds: “We are seeing clear signs that some of those clients who came to us the first time are returning more frequently.”

On the other hand, the main representative of this fledgling company reports that its sales have risen significantly. Due to confinement conditions, many parents and the general public are buying more canvas, paint supplies and activity kits for the little ones.

Freeman also added that: “We believe that behaviors will change.” Despite the fact that consumers are spending less than before the pandemic, a recent Pymnts survey indicates that online transactions are increasing for different items, even those that are not essential.

SinglesSwag Climbing

This company, which manages subscription boxes, has also seen its profitability gain ground. Located in Boca Raton, its founder Jonathan Beskin has revealed that in recent weeks they have experienced a great upturn in their store.

The subscription combos promoted by this startup contain articles that add up to about $ 200. They have reached an accumulated growth of 1990% reported during the last 3 years of operations. Their figures have helped them to be included in the Inc 5000 list.

The funny thing about this story is that its managers were looking for financing before the epidemic, but they suspended the applications due to exponential growth. Today, SingleSwag ships 40,000 cases to 30 different countries, projecting its earnings of $ 11 million in 2019 to $ 15 million by the end of this year.

Despite the increase in profits, its founder remains cautious. In fact, he believes that many clients will not continue as long as the economic situation continues to worsen. This is why he said: “We offer a luxury product. Now people are buying, but as unemployment sharpens due to economic uncertainty, my concern also increases.”

Fulfillment is also on the rise

Following in the footsteps of other e-commerce stores in South Florida, we found ShipMonk. This undertaking, dedicated to inventory management and the dispatch of orders with technological help, has increased its sales volume from 10 to 20%.

According to Jan Bednar (CEO), this Fort Lauderdale company was in full growth before the health crisis. Even so, in the last month they have had to hire 100 more collaborators to supply the current demand. This has brought its staff to a total of 650 people.

It’s fair to say that ShipMonk is managing high season inventories to fulfill online orders. The company has said it is trying to establish long-term deals because it is not interested in those who only need services during this crisis.

Before the prospect of difficult days, Bednar has stated: “When this situation ends, many believe that e-commerce will have greater growth.” He also added: “The interesting thing about this case is that people who previously did not buy online are forced to do so. So I think that e-commerce is destined to grow more”.