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26th April 2020 - - 0 comments
Coronavirus - What Next for Ecommerce?

Well, here we are in the sunny UK. May is on the horizon and we should be looking forward to a hot summer of fun, adventure, and making memories with family and friends. However, nature has had other ideas and instead of making exciting plans for the holiday season, we are all locked away inside facing down possibly the biggest global threat since the second World War.

We are of course talking about the SARS-CoV-2 coronavirus and the COVID-19 disease that it causes. After first emerging from China, the virus has swept across the globe and has, at the time of writing, infected over 2,700,000 people. Of those cases, over 750,000 have made a full recovery and more than 1,700,000 are considered to be experiencing mild symptoms. Unfortunately, nearly 60,000 of those presently infected are in a serious or critical condition and almost 200,000 have sadly lost their lives to the disease.

 

In an effort to slow the spread of the virus, many countries have instigated some form of lockdown as well as social distancing guidelines to prevent people from mixing together.

Here in the UK for example, people are being instructed not to leave their homes except for grocery shopping, seeking medical assistance, caring for a vulnerable person, or for a single hour-long exercise session per day. This way, the spread of the virus can be slowed, and we can prevent our health systems from becoming overwhelmed. As you can see from the graph above, lockdown measures are working here in the UK and the rate of infection is slowing.

Ecommerce

Because of the lockdown, many people have had to switch to working from home, and most physical retail outlets have shut their doors – along with pubs, clubs, restaurants, and more – with only essential retailers, such as supermarkets, convenience stores, and other grocery outlets. This has naturally led to a surge in popularity for ecommerce, as people are forced to do their shopping online.

At first glance, it may seem distasteful to be talking about how to market your business online during a period such as this. However, it’s a sad fact that many companies aren’t going to survive this crisis and it’s only by thinking outside of the box, identifying the ways the market has changed because of COVID-19, and making the most of the opportunities which are out there, that we can minimise this devastation as much as possible.

As with any discussion on the state of ecommerce, our attention will inevitably turn towards that inexorable juggernaut of the industry – Amazon. It’s predicted that Jeff Bezos’s online behemoth will report first-quarter 2020 revenues of $73bn (£58bn). For the sake of comparison, that would be up a massive 22 percent on the same quarter last year and works out as sales of $10,000 every second of every day. Top sellers include entertainment products such as video games and exercise equipment as people are forced to forgo gyms and find new ways to keep in shape. Not to mention the fact that you can buy groceries from Amazon and avoid the large queues and infection potential of visiting your local supermarket or convenience store.

Looking at what’s going on at Amazon is all well and good but, as one of the world’s largest companies, it’s not advisable to generalise its performance to the rest of the ecommerce space. With that in mind, let’s have a more general overview of what is happening in online retail.

 

(Data source: userconversion.com)

Thanks to research carried out by conversion rate optimisation agency, User Conversion we can see that, overall, performance prior to lockdown measures was comparable to the previous year – no big surprises there. However, once government intervention began performance rose rather considerably. This clearly fits with what has been going on at Amazon, but it fails to capture the whole picture – especially when it comes to buyer behaviour.

 

As our next chart demonstrates, while people are certainly buying more online, the number of sessions and amount of time during each session have actually decreased since the lockdown began. This suggests that customers are spending less time browsing for products and instead logging on knowing exactly what they need, making the purchase, and then logging off again. So, online shopping has increased, but has become more planned and less exploratory, meaning that the priority for ecommerce brands should be on delivering relevancy and immediacy to their customers.

This will put more pressure on ecommerce brands when it comes to personalised recommendations. As customers spend less net time on ecommerce platforms, recommendations need to be more relevant than ever. The window is small to tempt shoppers with extra products other than those which they have specifically logged on for, so they need to be suggestions for items which are going to resonate with the customer, but still relevant in the current climate. For example, it’s probably not the best time to be recommending products such as luggage or other travel related items.

Shifting Attitudes

Now we know what has changed when it comes to the way people are shopping online and what kinds of products they are after during this crisis, it’s time to look at customer attitudes. Has this new status quo influenced the way the general public views ecommerce brands, or have attitudes remained constant?

The short answer is – yes, they have changed. The longer answer is that people are now prescribing a greater deal of importance to ecommerce than ever before. In fact, according to the data, 72 percent of the UK agree that shopping online is more important than ever. The demographic most closely associated with this shift in attitude is the 35-44 age bracket. This is likely because this is the section of society most likely to have younger children and are therefore feeling the need to be able to access entertainment and home-schooling products more keenly than those in younger and older age groups.

User confidence in online shopping is on the up as well with over 95 percent of customers stating that they are now confident about shopping online. This confidence is, of course, likely born of the increased necessity of ecommerce engagement. People who may have previously been reticent about shopping online have been encouraged to give it a chance due to the coronavirus situation and been turned around to its convenience, efficiency, and effectiveness.

“It has taken two weeks for us all to become tech savvy,” reports Better Retailing. “Demand for online shopping with home delivery or dedicated pick-up points will at least double in the next year. Off-the-shelf platforms are available such as Shopify and Big Commerce and more will emerge. Many companies are using white-label delivery apps to go from in-store browsing to delivery. Social distancing, hygiene and customer order fulfilment massively support a surge in the use of mobile app technologies.”

It will be fascinating to see whether, once the lockdown has ended and retail stores begin to open again, whether these customers will stick with ecommerce or return to their old methods of shopping.

It seems likely that we’ll see an initial burst of custom in physical retail stores as people enjoy the “novelty” of being able to shop outside once again. However, once this novelty has worn off again, one must wonder whether those people who have been newly converted to ecommerce will continue to engage with it.

The most significant change has been in the attitudes of the 55+ demographic, who are usually the ones most resistant to ecommerce. Now over 80 percent of this generation are reporting an increased confidence in online shopping with three quarters of the UK population as a whole agreeing that online shopping is safer than in-store. If anything good for business can be said to come out of this situation, it’s that, by necessity, customers who may not have previously given ecommerce the time of day are now waking up to its potential.

However, the onus is now on retailers to make sure they give these new customers as smooth an experience as possible if they wish to retain that business once the danger has passed.

The Need for Speed

When it comes to home delivery, it was expected that the biggest concern for customers would be the potential for contamination – either at warehouses or via couriers. However, as people have adopted and adapted to social distancing, contactless delivery (and payment) have become the norm and customers are seeming increasingly relaxed with having items delivered to their homes – perhaps seeing it as the lesser of two evils – “…give me the grace to accept the things I cannot change…” and such.

Speed is now the number one concern when people are ordering products online for all demographics except the 55+ bracket, for whom free delivery slightly wins out. Perhaps people are remembering just a few weeks previously when delivery times were being significantly extended, resulting in some anxiety as to whether products – especially food and other household items – were going to arrive in time.

“To serve our customers in need while also helping to ensure the safety of our associates, we’ve changed our logistics, transportation, supply chain, purchasing, and third-party seller processes to prioritize stocking and delivering items that are a higher priority for our customers,” said an Amazon spokesperson back in March. “This has resulted in some of our delivery promises being longer than usual.”

When it comes to delivery times, things have more or less returned to normal now – not counting trying to book a supermarket delivery slot which still have significant waiting times – but there could still be residual anxiety from before. It’s important to remember what we discussed previously about people generally purchasing the things the need there and then, rather than generally browsing, which also offers an explanation to the increased relative importance of delivery speed.

Therefore, brands which are able to put these concerns to the fore and make sure products are delivered as quickly as possible – which for many brands will clearly require them working closely with third party delivery facilitators – are the ones which are likely to see the biggest and best returns on their efforts.

As you can see from our previous graph, after delivery concerns, the next most common point of interest for customers is returns. In the face of the coronavirus crisis, many ecommerce brands are now offering extended returns periods to give people more time to decide on a product and to allow for any delays in delivery times.

The Emotional Hook

We’ve talked at length in our industry about the importance of creating an emotional link to your product and this factor has become more important than ever during this pandemic. As we’ve already discussed, people right now are tending to use online shopping to access products they need in that moment and aren’t spending a great deal of time browsing for additional non-essential items.

This means that, if your business isn’t one which fulfils a functional need during this moment in history, you are going to need to tap into those emotional connections to boost your chances of making a sale.

 

One surprising finding from User Conversion’s research was that there remains a strong desire to purchase gifts for friends and family. In fact, respondents to the survey were overall more likely to by a gift than they were a takeaway. This is likely because people can’t socialise on special occasions the way they would have before. In the before times, people would have gone out for a celebratory drink or meal on a birthday or similar special occasion, but that’s no longer possible. Therefore, to make up for not being able to spend time with people on these occasions, it could be that people are more likely to send a gift instead.

Lots of brands are making the move towards pushing products which are more relevant in the current situation – such as exercise equipment. However, those companies which don’t offer these kinds of products could see great results by making more of those emotional connections – such as with gift products.

Remind your customers that there are still ways to connect with their friends and family and show them you care on those special days. You may not be able to see them in person, but there’s nothing stopping you from showing them you care with a birthday or anniversary gift – or even one that’s totally spontaneous, just to show them you care. This messaging can be powerful. In fact, it’s so powerful, this author has literally just convinced themselves to send a spontaneous gift to their daughter.

Another way to leverage the emotional hook is to promote the benefits of shopping with an independent retailer. As we mentioned at the top of this article, it’s likely that, despite significant government assistance, many smaller businesses will be forced to close as a result of the coronavirus pandemic. However, this is creating a lot of good will among the buying public which is driving them to support these brands.

Nearly 43 percent of respondents have stated they are more likely to shop with independent retailers during the COVID-19 crisis, because they have an increased knowledge and awareness of the struggles they’re facing. This creates an opportunity for these businesses to get their message out there and tell a story which will resonate with the buying public.

Many of these brands are run by friends or family and these provide amazing emotional hooks on which to hang your stories. Use social media platforms such as Instagram to show your audience the people behind your brand and what running your business means to you. One positive side effect we are seeing come out of this crisis is an increased perception of the importance of the ties which bind us, which means people are more primed than ever to respond to these cues.

And, before your eyes roll into the back of your head, this isn’t cynical marketing for the sake of it. This isn’t some enormous faceless corporation creating a superficial commercial designed to play on your emotions. This is the real story of your company and the people who not only make it work, but for whom the company means the world. Connect with your audience on an emotional level, show them your heart and your connection to the local community, and they will be more likely to spend their money with you.

 

Succeeding in the Face of Coronavirus

Hopefully, we’ve demonstrated the ways in which the retail market has changed in the face of this crisis. We have no idea how long this will go on for but it’s likely some form of social distancing will be in effect until a vaccine is approved, even once the lockdown measures end.

Businesses – especially smaller independent brands – are in for a rough ride and need to adapt to the new status quo if they are to stand a chance of surviving. However, by following our advice and delivering a clear and honest brand message your business stands the best chance it can of surviving and thriving in the time of corona.

·         Reassure your customers on a reliable and predictable service.

·         Increase your delivery fulfilment capabilities, if possible and demand is there.

·         Make decisions. Experiment with your proposition.

·         Don’t be scared to try something new.

·         Make delivery free, if financially viable.

·         Focus on essential products if you can.

·         Focus on gifts, even if you haven’t traditionally focused on gifts.

·         Build those emotional and honest connections with your audience.

It’s easy to get wrapped up in the doom and gloom of this situation, but there are a lot of positives to be drawn from it as well. People are coming together – not physically obviously – more than ever before and community spirit seems to have never been higher in this author’s memory. This provides a fertile ground where those businesses which serve their communities can discover new ways to connect and build long lasting relationships which will persist long after the threat has passed.

Take care out there and all the best from the team here at markITwrite.

 

 

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