The affect COVID-19 on eCommerce & consumer behaviour

Impact Of COVID-19 On Consumer Behaviour

There’s no doubt that the global crisis caused by the pandemic Coronavirus (COVID-19) has created an incredibly difficult business climate.

Businesses globally are being presented with many new challenges that most consultants and agencies have never had to face before. International borders are closing, bricks-and-mortar and high streets businesses are shutting their doors, and people are told to isolate at home. Many companies around the world face temporary or even permanent closures, with staff facing months of financial uncertainty and worry.

Global consumer behaviour has been forced to immediately change, and change on a seismic scale. Those in self isolation or under lockdown can’t perform their usual daily routines, especially since many local shops have been forced to close their doors for safety reasons or are applying social distancing and restricting the amount of customers in the store at any one time which makes for a highly stressful in person shopping experience.

Concerns about the product availability of goods and huge media attention online while media outlets vie for consumer clicks have encouraged mass panic buying of items in bulk. Financial uncertainty and the prospect of a severe and long-term recession make for a stark reality which has led to an impact on consumer psychology, perceptions and behaviours.

For the businesses that remain active at this time, questions are being asked about “how best to cope with the current trading conditions”, and “how best should I adapt our marketing strategies”. These are both difficult questions to answer since the Coronavirus pandemic is so new that the circumstances are changing on a daily basis.

Defining a strategy now will be difficult, however data and insights coming in from countries which have suffered is bringing some interesting findings.

Act Now! As COVID-19 is already impacting buyer behaviour

Online, is changing just as fast as offline. In early March 2020 The Drum reported on research that shows that, while annual advertising growth rates in China are predicted to fall from 7% growth in 2020 to 3.9%, eCommerce advertising spend is predicted to grow by 17.7% and social media spending to rise by 22.2%.

These metrics reflect the changes in consumer behaviour as they switch from buying offline to buying online. They also show that as people are spending more time at home, brands have responded by shifting spend from offline media to online, with 14% reporting this course of action.

While the types of goods people need might change due to their circumstances, the need to purchase these somewhere will always remain, and we will likely see a general switch to online shopping.

What challenges are there for eCommerce?

In theory, online stores of all sizes stand to benefit from the switch of consumer behaviour and psychology. Online shopping is well-positioned to serve the ever increasing demand for goods and services during this period we now find ourselves in.

However, there are challenges that you will need to be aware of for your your business!

There are also likely to be issues with the supply-chain and product delivery/stock, with companies already starting to explore innovative ways around this.

Perhaps an even more limiting factor for businesses will be the level position of their eCommerce offering. If their online platform is not capable of offering a compelling UX (user experience), the chances are it will fail to impress, entice or retain customers. My own personal opinion on this is unfortunately shows both a lack of understanding of the landscape we live in, the mindset of business owners that may fear change and adversity to adapting their business, and also agencies that fail to advise correctly.

Ensuring that your eCommerce site is well optimised, and that you have a solid digital omni-channel strategy ready will be critical in the success of your online presence.

Fortune states that:

  • “companies with robust e-commerce offerings … will fare the best in the current turmoil”
  • “analysts agree that retailers still playing catch up on e-commerce will be the biggest losers”
  • “retailers with good sites will lose the least”

 

These are pretty bold warnings, and it’s clear that companies need to ensure that their sites are more than just average, now is a time to seize the day and push forward.

Brands will need to deliver the best eCommerce user experience possible, to ensure that their online offering out performs the competition and also sets the benchmark extremely high.

To start with, your website MUST be discoverable via “search engines” through conventional search engine optimisation, paid media, social media and paid social at the time their customers intend to make a purchase, and once customers are on your site the eCommerce platform must be responsive and meet or exceed customer expectations.

Proof That COVID-19 is changing eCommerce traffic

There have already been huge changes in search behaviour in the “Fashion” sector. It’s not uncommon for fashion brands to have a significant proportion of their traffic coming through “branded search”. Below is an example of one UK-based fashion retailer’s branded search traffic drop by approximately 40% after strict new measures were introduced in mid-March by the UK Government to combat the COVID-19 virus (some other fashion brands drop by as much as 70% in the same time frame):

COVID 19 and the impact of brand search march 2020

During this period, the same site’s generic traffic also dropped-off, indicating a general downturn in demand for “fashion” based products. Lord Simon Wolfson, Next’s Chief Executive, quoted recently that “People do not buy a new outfit to stay at home”.

The following UK brand within the “Home and Hardware” sector saw a large increase in brand search:

Home and Hardware sector saw a large increase in brand search during COVID-19

Even their generic “non-brand” search engine traffic has increased since mid-March:

generic non-brand search traffic increase during COVID-19 - 2020

Additional to this they have seen that their “generic non-brand traffic” has increased since mid-March, this is in line with the regular comments made to our clients about the consumer mindset about individuals being “locked in” their properties to adhere to the governments new rules and regulations on social distancing”.

So different sites, and sectors, will experience different effects from the changes in consumer behaviour.  What is clear though is that user behaviour is definitely changing online, and sometimes quite dramatically.

Is your website or eCommerce site set up to cope with this new change in consumer behaviour?

What can you do to improve your eCommerce offering to remain competitive

As the Coronavirus crisis continues to rage on the world’s population, and as their behaviour adapts, companies with a solid eCommerce offering can ensure that they are there when consumers need them.

Nike, for example, has managed to increase digital sales by 30% as a result of their fitness and e-commerce apps being particularly well integrated.

As consumer behaviour changes and results in more and more customers shopping online, so too will the marketplace change to become ever-more competitive as companies seek to capitalise on this trend. If your site is not found in search engines for relevant searches, or your site’s responsiveness lags behind your competitors, your ability to compete will be severely diminished. In today’s tough economic climate, this is the digital equivalent of rubbing a lemon on a open wound.

This implies that, rather than stopping marketing activities such as Content Marketing/Production, Analytics, Search Engine Optimisation (SEO), Conversion Rate Optimisation (CRO), Pay Per Click (PPC) and Paid Social etc., companies could be best served by investing into (if not doing so already), or investing more heavily into these types of digital marketing activities.

While each business is different and will face its own challenges, investing into these areas may actually help companies thrive in a competitive space, and help offset the financial impact of the loss of offline sales. Investment here will certainly prevent the loss of online market share, and will help position brands in preparation for the increase in demand that will surely come once this crisis abates.

Editorial content is usually seen as a quick win since it normally requires little technical input and can therefore be developed and implemented rapidly. The key is in understanding your customer’s intent and providing content that meets or exceeds their needs.

What I have noticed is that some eCommerce companies are trying to move their content marketing strategies to capture users who, as of the beginning of lockdown, are at home with far more time to surf online on multiple devices (for those of you who have had the pleasure of having a conversation with me over the past few weeks you will know I have mentioned this many times).

This shows us that companies should probably perform a deep-dive into their Analytics and really understand the current needs of customers, since these needs will almost certainly have changed recently.

In this new world, as customers are having to spend much more time shopping online, even small changes to a site’s user experience and page load times will likely have a much bigger impact on customer retention and conversion rates.

Final Thoughts…

While the world is reeling from the effects of the Coronavirus pandemic, user behaviour is being forced to change and shoppers are increasingly moving online. eCommerce sites are in a position to be able to capitalise on this, but only if they are able to be found by customers in the first place.

While tactics may need to be adapted to the new environment we find ourselves in, businesses should consider retaining investment in their analytics, online marketing and online content so that they can remain competitive and meet the needs of shoppers.

In these uncertain times, there are always opportunities; it just takes a slightly different mindset and approach, and a positive attitude in order for your brand to capitalise on this in a time where your competition will be trying to ride the storm out by cutting all actives and failing to adapt.

If you feel you want help understanding how you can develop strategies that work around the impact of COVID-19 on your business or if you have any questions or would like to chat with us about how you can adapt your business in the current climate then please contact us.

Author: Graham Paffett

A seasoned luxury goods & services digital marketer with over 20 years Exp. A specialist in developing "disruptive" digital campaigns and strategies for FMCG brands both within the UK and International. • Paid Social (inc. Facebook/Instagram, TikTok, LinkedIn & Pinterest) • SEO (Search Engine Optimisation) • PPC (Pay Per Click) • CRO (Conversion Rate Optimisation) • ASO (App Store Optimisation) • Direct To Consumer & B2B Digital Strategy Specialist • Social Media Marketer