Our world has changed so much in the last month that it’s unrecognisable: global society has been impacted in every way, from the places we can go to the way we spend our time, our priorities have shifted, and the way we spend our money changed.
From an ecommerce point of view, restrictions to our freedom of movement and a global shutdown to limit the impact of the pandemic have led to huge changes in customer behaviour. But how is this manifesting itself?
How Tech is Helping Ease the Crisis
One wonders how this situation may have unfolded if COVID-19 had emerged in the early 1990s. Technology that simply wouldn’t have existed back then has helped us get through the crisis so far: from apps like WhatsApp and Zoom, helping us stay connected to our colleagues and loved ones, to the very existence of the internet itself, allowing information (and misinformation) to spread quickly.
While a global recession looks inevitable, with many businesses and industries either struggling or already collapsing, it is not all bad news. Over 2 billion people, or 25% of the world’s population, are digital buyers, so businesses with a strong ecommerce structure have a huge opportunity to bring solutions, products and services to a disconnected world.
How Have Businesses Responded?
These testing/unusual/unprecedented/uncertain times (pick your favourite overused term!) are accelerating the adoption of online services and may well provoke a long term behavioural change in the way people shop, consume media, seek education, or generally get things done.
Ecommerce and Online Activity
The crisis has led to people redefining their businesses through necessity, and to monetise their services using ecommerce in a way they perhaps didn’t before. In a matter of weeks, self-employed people had to revise and rethink their business models. We’ve seen personal trainers, Pilates teachers and gyms deliver services online now they can no longer run in-person classes. Joe Wicks, via his daily PE videos, has inspired people to think about how they can amend their services using different delivery methods at this time.
Screen time is massively up - with people restricted to their homes, more time is being spent on devices (some apps have recorded up by more than 200%) and with people bored and not spending their money on pubs, restaurants and other activities, they may have additional disposable income that could be captured by ecommerce businesses putting themselves front and centre of this (quite literally) captive audience.
With the majority of retailers closing their physical stores temporarily, we’re likely to see a huge shift to online shopping in many retail sectors and it’s important to make sure businesses are ready to capitalise on this shift.
In theory, online stores should benefit from the switch of consumer behaviour to online shopping since they are already well-positioned to serve the increasing demand for goods and services.
However, retailers face many different challenges at this time. Depending on the sector, it could be that some actually see website visitor numbers decline, so it becomes more important to make the most of the traffic that does come in, working harder than ever to increase conversion rates. Other sectors face the other challenge of managing increased customer demand, trying to maintain stock levels and delivery performance in difficult times.
The other key factor is that as consumer behaviour changes with increased customers shopping online, the marketplace will become more competitive as companies seek to capitalise on this trend.
This would suggest that, rather than pausing marketing activities such as Analytics, SEO, Content Marketing, Conversion Rate Optimisation, Pay Per Click (PPC) advertising and Paid Social Media activity, companies should invest more heavily into these areas. This could help them thrive in a competitive space.
Looking beyond the pandemic, it may be the case that once restrictions are lifted and they’re able to resume services, some of these businesses find they even have additional revenue streams thanks to the forced innovation, or may choose to implement different working practices (for example, flexibility for staff to work from home now it’s been proven to work effectively).
Fashion Retail Performance
Nosto has pulled together some real-time data covering 1st March to 5th April 2020 to show how the fashion ecommerce landscape is evolving during the pandemic. Their report shows some really interesting and encouraging snapshots:
In the 10 days since March 20th 2020 - the lowest point in their sample for sales - revenue has increased over 30%
Ecommerce KPIs are all up (with the exception of AOV)
More people are shopping online; they are more engaged and ready to convert than in the same period in 2019.
Click here to access the full report and get all the insights.
In general across ecommerce, we expect to see an increase in online shopping in the coming months, but it is complicated. Other factors are at play: the uncertainty of potential shoppers who may be concerned about losing their jobs, or are out of work already. Supply chain issues may become a problem. The industry you’re in will be a huge factor of course (for example, toilet paper manufacturers probably did very well recently). There are lots of unknowns at the moment.
While it’s a difficult time for retail, now is the time to make sure your ecommerce experience is as robust as you can make it. If you’re in a niche that is performing well in the circumstances, that’s great. If you’re in a market that is struggling: this period won’t last forever, and in the meantime, think about how you can adapt to the situation.
This is the time to pivot your business quickly and make sure it remains viable in a changing world. Audit your business and store; make sure you’re doing everything you can to stay in front of your existing audience and to expand into new sectors. Capitalise on the additional screen time people are engaging in during the pandemic and let them know you’re still there.
If you need any ecommerce support, get in touch - we’re the Shopify and ecommerce experts, and will be happy to help.