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The coronavirus pandemic has upended plans all over the globe in the past few months — from events and vacations to marketing calendars and revenue forecasts.
As Robert Burns wrote in a poem more than 250 years ago, “The best laid schemes of mice and men go often askew.” For many, that has never felt more true.
In general during the coronavirus, ecommerce seems to be in a pretty good spot. After all, shoppers that can’t go to a brick-and-mortar may turn instead to online shopping. But of course, it’s not that simple.
Factor in economic uncertainty, which you can see reflected in stock market performance, and a shift away from many of the activities we typically enjoy (looking at you, Travel), and the impact on brick-and-mortar retail sales as well as online sales varies widely by vertical and even by business.
As patterns begin to emerge in response to news events of this nature, it will be imperative for companies to learn from these scenarios so they can sustain growth even in times where COVID-19 has uprooted people’s lives. These patterns will help provide leading and trailing indicators to those trying to understand how people will respond as developments continue to play out at different times in different countries. Scott McKenzie, Nielsen’s Global Intelligence Leader
This piece will examine some of those short-term (ecommerce coronavirus) patterns and offer some suggestions on how online retailers can adapt to shoppers’ new priorities. We’ll also look at how to prepare your brick-and-mortar, if you have one, for life after coronavirus.
Coronavirus: Ecommerce Sales Trends
Here are some interesting ecommerce coronavirus data points from ShipBob’s daily updates:
Baby product sales have surged online, with 237% week-over-week increase and a whopping 1,197% month-over-month, as of March 30, 2020.
Food and beverage ecommerce is up almost 26% MoM and 20% WoW.
With somewhat mixed results, toys and games are down 54% MoM, but up 93% WoW.
Apparel, jewelry, and electronics are all down.
In an interview with Retail Dive, Doug Stephens said that luxury brands who hadn’t yet fully embraced ecommerce would be one of the biggest-hit sectors, and that fear of viral contagion could also have a negative impact on the resale market.
Ecommerce and Coronavirus: The Impact
Ecommerce has proved itself essential in days of social distancing and shut-down storefronts. But some consumers have unfortunately found themselves with less or no work as a result of shelter-in-place orders and closures of nonessential businesses, and economists have estimated the U.S. unemployment rate may reach 32%. Others have tightened nonessential spending due to worldwide economic uncertainty.
It’s difficult to predict the full impact of the coronavirus on online sales growth rates overall, but what is sure is that results won’t be consistent across the board. It will depend on niche, changing shopper behavior, and how much longer communities are asked to socially distance — among other things.
Let’s look at some of the trends we’ve seen so far.
1. An influx of online shopping.
Between conforming with social distancing guidelines and accounting for brick-and-mortar store closures, shoppers — based on ecommerce sales numbers — seem to have taken much of their business online. Listrak reports a 40% increase in ecommerce revenue since the U.S. declared a state of emergency.
Sales in some verticals are way up, even leading to some product shortages…but that’s not true across the board.
In some states in the U.S., mandatory shut-downs of nonessential storefronts just went into place last week. This may lead to a larger uptick in ecommerce for some verticals.
2. Ecommerce delivery and supply chain concerns.
While increased demand is better than the alternative, there is a concern that supply won’t be able to meet it. Disruptions to the supply chain — beginning in China in the early days of the coronavirus outbreak — have impacted the availability of inventory and delivery times.
Signs are good, as China begins to recover, that a return to normal may be under way. But for ecommerce businesses in the U.S., they may still have more challenges to contend with, particularly in terms of fulfillment, before the volatility settles.
3. Pausing ecommerce orders.
A growing number of shelter-in-place orders are halting fulfillment and distribution of some non-essential products, further complicating the situation for some ecommerce companies. Victoria’s Secret and Reformation have both halted their ecommerce operations at this time due to the still-spreading coronavirus.
4. Amazon freezes FBA shipments for non-essential items.
To meet the increased demand of necessities like medical supplies and household staples, Amazon confirmed on March 23 that it would be prioritizing the shipment of those types of products to its warehouses. Other product categories getting the go-ahead include baby products, health and household, beauty and personal care, grocery, and pet supplies.
That leaves shipments of other goods delayed for up to a month. An Amazon spokesperson credited the change to efforts toward easing logistics pressures and keeping employees safe, according to an article in CNET. Third-party sellers on Amazon will be hit particularly hard — those with products outside of the categories deemed “essential” will not be able to use FBA, Amazon’s fulfillment services.
5. Online stores are diversifying products.
In the face of rapidly changing consumer lifestyles and shopping habits, businesses are finding the need to pivot quickly to stay competitive in today’s landscape.
Some ecommerce sellers are adding soaps and other hygiene products, medical supplies, or various DIY or self-care related products to meet consumer demands. Others have had to change their delivery models to offer curbside pickup, or offer digital versions of their products/services to avoid shipping and fulfillment altogether.
6. Rise of purchasing groceries online.
Social distancing, the hassle of dealing with crowds and lines, and frequent inventory shortages have been increasingly frustrating people out of the grocery stores and onto the web. Online grocery delivery services are booming, acquiring new customers even outside their previous majority demographic.
A survey from mid-March 2020 found that one-third of those interviewed had used online pickup or delivery services for their grocery needs in the past seven days, and 41% of those were using that service for the first time.
7. Increase in coronavirus-related ecommerce stores.
The rise of SaaS ecommerce platforms like BigCommerce and Shopify have lowered the barrier to entry to sell online — and that’s a positive thing for retailers providing quality products to their customers.
Unfortunately, with the rise of the coronavirus, some sellers quickly stood up online storefronts to sell products they claimed could protect against or cure the virus — claims that are unfounded and completely unsubstantiated by medical professionals.
Ecommerce + Coronavirus: Adapting Your Store
If coronavirus has negatively impacted your sales or your ability to conduct business as usual, all is not lost. While the impact of coronavirus on consumer preferences and demands may last beyond the virus, life will return to normal — even if it’s a “new normal.”
In the meantime, here are nine tips for adapting your ecommerce strategy in this changing world.
1. Contact your manufacturers.
As we’ve discussed, there are a lot of factors at play here. You may see a surge in demand on your online store; you may not — but, either way, supply could become an issue.
Talk to your manufacturers about where they stand on production and how they anticipate coronavirus impacting their business. You can’t plan for what you don’t know, so do your best to be as informed as possible about all aspects of your supply chain.
2. Search for alternative providers.
When coronavirus first appeared, it was largely centered in China — which is also where many sellers source their products. This did cause inventory shortages for some sellers who were unable to find alternate suppliers.
There is evidence that China is slowly but surely returning to business as usual, but other countries are feeling the strain (including the U.S.). Having a few different options to lean on as the situation evolves globally can help you mitigate risk.
3. Conduct a customer needs evaluation.
Think about your target or ideal customer groups — what’s their current situation? Are they working from home, serving on the front lines as essential workers, or furloughed/laid off? What are their particular needs and concerns right now?
Once you better understand their current needs, you can assess your readiness to meet them. Consider whether you currently have the inventory to support their needs or if you should consider pivoting to better serve them.
CBD for Life did this by adding (CBD-free) hand sanitizer to its product line, saying in an email to customers, “We originally created our hand sanitizers to support our sister dispensaries during this unprecedented time and we are now making them available to everyone.” (They’ll also be making donations to hospitals, first responders, and essential businesses.)
4. Shift towards an at-home audience.
One of the most obvious impacts of coronavirus is the increase in spending much more time at home than usual. Think about how you can shift your strategy to better serve their needs, or even delight them in these stressful times.
Restaurants are a great example of this. Since they’ve had to close their dine-in services, they have ramped up curbside pick-up and delivery services to make ends meet and keep customers fed.
On the ecommerce side, some stores have begun stocking new items and/or featuring collections of existing products that are more relevant to many people’s day-to-day lives now — specifically, staying at home. Son of a Sailor, a shop focused on gifts like jewelry and other accessories, has a product collection page of “Boredom Busters” featured on their homepage.
5. Embrace new sales channels.
One of the consequences of people being asked to stay at home is, of course, a large decrease in brick-and-mortar foot traffic — or even shop closures. This is a great time for brick-and-mortars to start an online store if they don’t already have one or, if they do, to double down on their online presence and digital marketing.
6. Update product pages.
In times of uncertainty, you want to make sure to communicate with your customers if any of your services will be changing.
Coronavirus has presented a situation that may cause supply chain issues, even on a per-product basis — and if that’s the case for your business, keep your product pages updated so your customers know what to expect. You may learn that certain products will be out of stock for a while, that shipments are taking longer to reach their destinations, or some of your products are selling out more quickly than usual.
This is all important information for your customers to have as they shop your store. Be transparent and provide as much information as you can. By managing expectations, you’ll be more likely to have satisfied customers — even if you are experiencing a slow-down in service.
You can even outsource this to a freelancer for efficiency.
7. Have a data mindset and people focus.
One of the biggest keys to a successful business is being able to recognize and fill the needs of a certain subset of customers. Even in the face of today’s global situation, that fact remains the same.
Luckily, our connected society offers so many opportunities to collect data. Use it to your advantage and observe the difference in customer behavior. If you focus on meeting their needs as they are today, you’ll be better equipped to weather the storm of uncertainty.
8. Be smart about PPC advertising.
It stands to reason that with more people at home, there are more Google searches going on — and some are turning to ecommerce for products they would have previously purchased in person. But other verticals have seen a decrease in traffic.
It makes sense to consider PPC if you’re not already doing it, especially if your store has items that are relevant to the change in our lives due to coronavirus (including things to entertain kids stuck at home) — but it won’t be right for every business.
Make sure to watch your data closely, and adjust your bidding strategy if necessary. If you see that certain times of day have much lower conversion rates, reduce your bids for those times to save money.
9. Find opportunities for a special offer.
Economic uncertainty, layoffs, and lost jobs may increase price sensitivity in some shoppers. Consider offering a special discount across your store or on specific items that may have higher demand. If consumer spending in your store is down, discounts could be a good way to draw shoppers back.
10. Create an undeniable loyalty program.
It’s been said numerous times in countless retail blogs that most retailers can bank on 80% of their future profits being generated from just 20% of their existing customers. The current times are no different, in fact, it’s now more important than ever to ensure that you’re recapturing your existing customers and encouraging their loyalty! This is where a powerful, data-driven loyalty program comes in. Customers are currently more active than ever online and rewarding them for shopping with you right from purchase #1 is the perfect way to keep them coming back.
By using a loyalty program that encourages your customers to repeatedly shop with you, you’re not only ensuring the longevity of your business, you’re also ensuring that your customers feel appreciated and valued. Promote customer satisfaction by creating a loyalty program that rewards customers for completing certain actions, like giving points when they first sign-up so customers are closer to redeeming their first reward, or even creating exclusive rewards that are only available in May to help re-engage your existing customers with your loyalty program.
Singapore-based lingerie retailer, Our Bralette Club, has mastered this with a generously comprehensive rewards program, the ‘OBC Peach Party’, that is sure to delight all of their customers. With VIP tiers and a wide variety of generous rewards, customers are able to claim and redeem rewards such as $5 off a purchase or a free tote bag with their order. Our Bralette Club is even offering a 20% off coupon code to encourage their customers to continue shopping online during lockdown and beyond.
Don’t be afraid to get creative and even go COVID-19 specific with your rewards program, just make sure you’re keeping tabs on it! If you find that customers aren’t really redeeming your rewards, it could be a good opportunity to the communication of your loyalty program, edit your rewards, change up your emails, or even look at what other businesses are offering at this time.
Preparing Your Online Store for After Coronavirus
In addition to adjusting your current strategy, you’ll want to take steps to ensure a quick recovery when we return to business as usual.
1. Prepare for a building demand.
An article published on Entrepreneur.com suggests that, based on what’s happening in China, “the post-coronavirus economic recovery might be faster than we expect.”
Some verticals, particularly those that saw decreased sales during the pandemic, may see a huge resurgence in demand once consumers begin to return to everyday life. Make sure you’re prepared so you’re in a strong position to bounce back quickly.
2. Address technological shortfalls.
For brands who are seeing a slowdown, this is a great opportunity to evaluate your tech stack without worrying as much about disruptions.
Look closely at your ecommerce platform, integrations, and marketing to make sure you’re ready for the return of shopping as usual. Improving your site’s SEO, ensuring page speed, and optimizing your checkout experience are just a few of many beneficial ways you can spend your time to set yourself up for future success.
The bottom line is that no one can predict exactly what will happen; the magnitude of impact from coronavirus truly is, to use a word many people are quite sick of at this point, unprecedented. No longer does anyone have the choice to be fully proactive — we all have to react in real time to changing information and situations around the world.
Now is the time to make small adjustments in response to the shifts in shopper needs and behavior, while also preparing for a return to normal. Above all, stay positive and think strategically, and you can help your business weather the storm.
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