The stock market is plunging, federal interest rates have been slashed and the government has created a stimulus package to keep business afloat. The major shift in the market is not new, unfortunately. If you have been working in marketing for more than a decade, you might be having flashbacks to 2008 and not in a good way.
While it can seem stressful and unnerving as the novel virus runs its course, ecommerce businesses can find some financial relief as more shoppers turn to online sources to spend.
Online sales have increased approximately 52% compared year-over-year, and the number of online shoppers has increased 8.8% since the coronavirus began, according to Quantum Metric. The firm reviewed 5.5 billion anonymous and aggregated online and mobile site visits to retailer websites from United States consumers between January 1 and February 29.
While it may seem like the future is unpredictable, there are a few positive comparisons we can highlight that can bring some peace to ecommerce business owners.
Coronavirus Positive Impact of Online Health Products
According to Bloomreach, a site search provider, they have found dramatic profit increases for their 250-plus retailer clients. One of their clients, popular grocery chain Albertsons Cos, online sales for health related items from the week of February 22-29 saw a dramatic increase from the week prior in the following items:
- Mask sales increased 590%
- Hand sanitizer sales increased 420%
- Clorox/Lysol wipes sales increased $184%
- Disinfectants sales increased 178%
- Bottled/packaged water sales increased 78%
- Vitamins sales increased 78%
- Tissues sales increased 43%
- Hand soap increased 33%
The outbreak has caused a significant spike in online sales of provisional supplies, immune-boosting products and beauty supplies, due to would-be shoppers concerned about keeping their families safe. According to market research firm Kantar, U.K. hand sanitizer sales saw a steep year-over-year increase of 255% in February alone.
Outbreak Impacts More Than The Healthcare Industry
While it’s obvious healthcare and cleaning supplies have seen a drastic surge in sales, other industries are seeing a positive increase in sales. Specifically luxury beauty products, cosmetics and skin care solutions have seen an uptick in online sales.
According to Jackie Flam, the Chief Marketing Officer of Pierre Fabre, their brand Klorane saw higher sales of their Klorane Dry Shampoo online from Ulta Beauty this past week versus their in-store sales compared with the same period the year prior.
Further, sales for Avene hand cream in the United States have nearly tripled in the past two-three weeks due to increased hand sanitizing.
There is a real opportunity for online brands to attract and convert new customers. Typically consumers like to see, touch and feel products in person before they invest in them. Now that they are being forced to make those decisions online, brands have the opportunity to close sales at a much higher conversion rate.
Online Shopping Trends During Social Distancing
Consumers will continue looking for products online to avoid crowds in store. So what can we do as a digital marketing agency to help our ecommerce clients grow during this time? We can help them see the data and help them make the right decisions.
More and more individuals will be working from home and practicing social distancing. With this isolation, more individuals will turn to online sources to purchase household goods to keep their lives as normal as possible. Online purchasing will become an increased habit that will have a lasting impact on the ecommerce industry. It’s likely if you weren’t buying your beauty products, clothes and groceries online before now, you are highly considering it now.
Companies are going to have to review their current budgets for 2020 and make decisions on how to best respond to the novel virus pandemic. With such a climb in online sales, companies that are stuck with a fixed budget may find their competitors are reaching your consumers with greater ease.
Similar to how businesses gradually increase their advertising during a holiday season, companies that jump on this have a “first-mover” advantage. It is easier to jump in front of an audience first than to catch up from being behind. Our CEO, Greg Shuey saw this in 2008 and 2009.
For search marketing veterans, we’ve been there, done that. I personally saw many online businesses tighten their budgets as we went into a recession and as a result, many of them lost market share and some even went out of business. I also saw many businesses go in the opposite direction, doubling budgets and getting aggressive with their marketing strategy/execution. Those businesses not only survived, but thrived. I expect to see a similar thing with companies taking advantage of our current situation and we will always recommend being as aggressive as possible when talking strategy with prospects and clients.
A customer’s lifetime value is significant, so understanding what you are willing to spend to acquire this new customer will help you determine how much you are willing to promote during this period. There are more online customers than ever, so if you aren’t reaching out to them it is likely someone else already has their attention and revenue.
It will also be critical businesses are aware of their shopping advertising campaign structures. Smart shopping campaigns and single campaign structures limit your ability to see the search data that illuminates specifically what is moving the needle for your online shopping campaigns.
Ecommerce Adoption and Consumer Behavior
More and more individuals will be turning to online shopping as the pandemic runs its course. According to an eMarketer study approximately eight in 10 respondents ages 60 and older said they will likely avoid shopping centers and malls. This audience will in turn have to shift their shopping habits to online sources.
Work with your digital marketing agency and internal teams to determine the best advertising strategy to reach the ever-expanding market. Discuss how you can tailor your advertising campaigns to better respond to what consumers are searching for.
Insights STRYDE Is Seeing
While the situation moving forward may be uncertain, your ecommerce business can be secure and more profitable when combined with the proper digital marketing solution. As stores struggle, online growth seems to remain positive. A number of brands we work with are still seeing growth year over year with the current situation.
Here are just a few examples based on Analytics data from a number of clients within each category. Client’s name/business name and other identifiable information is being withheld. We pulled data from businesses that are doing less than $5,000 a month in rev. last year but are now doing over +$10,000 a month this year to avoid highly skewed numbers.
Overall, traffic from all channels remains steady comparing Feb. 1st – March 18th to last year’s data. We have further broken things out by select industries that we have considerable data for to get an idea of how things are trending based on select industries.
Baby and Kids Industry:
Overall, year over year growth was trending positive from February 1 till March 18 and total traffic growth percent was up (on average) 15%; total revenue growth percent was up more than 40%. When looking at the same traffic and revenue trends the last two weeks of March (March 8-19) compared to the same period in February, you will see the average traffic growth decline by 6 percent but overall revenue growth is still up 12%.
Obviously, products are experiencing different growth trends. Some are seeing much higher growth trends and others are staying flat or dipping slightly. Kid accessories are showing slower growth trends the last few weeks compared to year over year data while clothing and essentials are seeing large growth as of late.
This space is seeing some of the highest growth currently. Year over year growth is trending very positive from February 1 till March 18 and total traffic growth was up (on average) +100% and total revenue growth percent was up more than 140%. When looking at the same traffic and revenue trends the last two weeks of March (March 8-19) compared to the same period in February, the amount of growth has come down (as would be expected) but the average growth is still high at an increase of 70% total traffic growth and total revenue growth percent is up over 90%.
Businesses operating in the Home Goods industry are seeing positive growth. Year over year growth is trending very positive from February 1st till March 18th and total traffic growth percent was up (on average) 40% and total revenue growth percent was up more than 45%. When looking at the same traffic and revenue trends the last two weeks of March (March 8-19) compared to the same period in February, the amount of growth has dropped but is still positive at an increase of 7 percent total traffic growth and total revenue growth percent up over 20%.
Women’s Fashion Industry:
Overall, year over year growth was trending very positive from February 1st till March 18th and total traffic growth percent was up (on average) 25% and total revenue growth percent was up slightly more than 20%. When looking at the same traffic and revenue trends the last two weeks of March (March 8-19) compared to the same period in February, the amount of growth has come down but the average growth is at 12% total traffic growth while the total revenue growth percent is still up over 15%.
Some products are seeing much lower growth and others are staying high. Swimwear and accessories used for outdoor activities have very low if any growth over the last few weeks compared to year over year data, while everyday clothing are showing signs of positive growth as of late.
Key Takeaways Across The Board:
- Email is proving to be a large driver of revenue for a lot of these brands. Brands that have very strong customer loyalty are seeing email work really well in generating revenue. Find ways to use your current email list to your advantage over the coming weeks.
- Paid social, while still driving a lot of traffic to sites, has dropped significantly in terms of revenue generation. Customers are showing signs of cutting out buying from brands that are new that they find via social media. Unless you have an essential product (toilet paper, tissues, diapers, baby formula, emergency preparedness kits, etc.) paid social is going to be challenging at getting customers to convert.
- Organic search is still driving a large amount of traffic and revenue to these brands and doesn’t show signs of slowing down. Sites that have a strong SEO strategy are seeing the benefits. Find ways to generate organic search traffic.
- Paid search can be very effective as well if you are diligent at monitoring the channel in order to make adjustments with terms that can quickly stop driving conversions.
- Customer loyalty is a must right now. If you do not have a customer loyalty program in place, create and implement a customer loyalty program ASAP. Find ways to build stronger relationships with your customers during this challenging time.
During the current situation, make sure you are able to adjust quickly and adjust your channel strategy to maximize your budget during this time of unknown for your customers and potential new customers still looking to spend money.