How this pandemic Is Transforming E-Commerce

Millions of online customers changing their behaviour at the same time to opt for more time saving and convenience puts a considerable strain on e-commerce and online retailers today. How they choose to react will define the future of e-commerce. Many are choosing to remove the friction that stands in the way of turning occasional customers into the most loyal. And they’re starting with securing online identities and protecting accounts from takeover control. Once state by state stay at home orders are lifted, e-commerce sales may stabilize at a lower growth rate than they are today. Yet, the behavioural changes are already in motion to completely change the retailing landscape and commerce overall for years to come.

E-Commerce’s Time Savings and Efficiency Are Here To Stay

Stay-at-home orders will eventually be lifted state by state, but in the interim, there are millions of consumers creating and reinforcing new online buying behaviours and habits. In many families, online grocery, apparel, and entertainment shopping will replace store and mall visits permanently until a vaccine is available.

Paradoxically, quarantines have helped alleviate the severe time shortages, so many families and friends have had in their lives. Many are reluctant to go back to old shopping habits for fear of getting sick. A recent  Morning Consult study found that 24% of consumers said they wouldn’t feel comfortable shopping in a mall for more than six months, 16% said they would feel comfortable in the next three months. The results are based on surveys with 2,200 U.S. adults between April 7 and April 9. Consumers are more motivated than ever to stay home and shop online, creating the ideal market conditions to fast-track, test, and launch new experience-driven mobile apps, sites, and touchpoints across their platform.  

                 December 31 update

Pandemic accelerates digital retail: Stats & trends

As consumers continue to be concerned about the pandemic and social distancing protocols, they’re growing more and more to dislike standing in checkout lines. Now more than ever, it’s crucial for brick-and-mortar stores to provide a checkout experience that is as quick and contactless as possible.

Amazon was already on the path to providing this experience with its cashierless stores, and even Starbucks has rolled out a pickup-only store. Walmart is also experimenting with new ways to streamline checkout processes to have less friction.

Interest in contactless checkout abilities have surged since the start of the pandemic. According to eMarketer data, as of June 2020, 30% of consumers indicated interested in mobile payments up from 17% just three months before in March. For mobile app orders, interest has grown from 16% to 28%. Consumers also continue to be interested in the ability to use augmented reality (AR) to get product info or virtually try on a product.

                   November 30 update

Coronavirus, Black Friday, + Cyber Monday ecommerce stats

  • COVID-19 safety precautions were the #2 priority for Cyber Week shoppers, with getting a good deal as the #1 priority. (Digital Commerce 360)
  • 61% of adults feel safe going to the store for holiday shopping. (Digital Commerce 360)
  • Black Friday 2020 foot traffic declined by 52% year-over-year, while Thanksgiving declined 95%. (Bloomberg)
  • Black Friday brought in $2.4 billion globally from independent & D2C brands, showing consumers’ support for the movement to support small businesses over the pandemic. (Bloomberg)

                              October 27 update

Q4 coronavirus and ecommerce stats

The coronavirus pandemic forced brands to pivot their 2020 ecommerce strategies immensely to cope with consumers’ constantly shifting behavior. Here are some the latest stats:

  • 12% more time spent with digital this year (Merkle)
  • 10% more time spent on mobile this year (Merkle)
  • 79% of consumers will continue to spend more conservatively in the coming months (Merkle)
  • 11% of advertisers expect COVID-19 to significantly impact their ad spending in Q4 (Influencer Marketing Hub)
  • 68% of advertisers expect COVID-19 to impact their ad spending into 2021 (Influencer Marketing Hub)
  • 62% of consumers shop online more now than before the pandemic (Bazaarvoice)
  • 3.5% less foot traffic in UK stores the week of October 17th (Reuters)

                    September 28 update

  • Turbocharged ecommerce shift brings 31.8% QoQ increase
  • Consumers spent nearly $212 billion on ecommerce between April and June 2020 according to new data from theUS Department of Commerce.
  • This nearly 32% increase clearly paints the picture of ecommerce’s growth during the pandemic. US ecommerce sales were only up 2.4% quarter-over-quarter in the first three months of the year. Now, ecommerce accounts for 16.1% of all US sales, compared to 11.8% in Q1.

                             August 28update

  • COVID-19: H1 2020 update
  • According to new data from Digital Commerce 360, online spend with U.S. retailers grew 30.1% – that’s $60.42 billion – year-over-year for the first six months of 2020 to reach a total of $347.26B. From 2018 to 2019, ecommerce sales grew just 12.7%.
  • Total retail sales were up 4% YoY, with online spending representing 18.6% of this growth.
  • In Q2 2020, $1 of every $5 spent by U.S. consumers came from online orders. Online spend with U.S. retailers grew 44.4%, with a total of $200.72B spent during this period.
  • The ecommerce sales growth is slowing now that many stores across the country have been reopening. Ecommerce sales were up 76% ($73.0B) YoY in June 2020, followed by 55% ($66.3B) in July.

                          July 28 update

UK spending and banking habits shifting

According to the Toluna and Harris Interactive COVID-19 Barometer survey40% of consumers in the United Kingdom plan to reduce spend related to entertainment as lockdown restricitons ease. That is in contrast to only 14% of consumers who said they would be increasing their spend over the next 1-2 months.

Additionally, of those surveyed, 38% said they would be looking to put more money into savings and an additional 28% said they planned to create stricter budgets in the near future.

What does all this mean? Basically, consumers are being cautious with their discretionary spending, even as restrictions are slowly being reduced in the UK. This shift in consumer mindset will have a trickle-down effect on ecommerce as well, especially in areas like the United States that are still being hard hit by the pandemic. Consumers are still incredibly hesitant about the stability of the economy, and rightly so.

With so much uncertainty on the future, a possible second wave, and a widespread vaccine still months away (at least), it’s no surprise that many people are hunkering down and safeguarding their income. How will this affect Q4 seasonality and holiday shopping?

Only time will tell.

June 30 update

2020 Ecommerce Paid Search

COVID-19 has thrown the entire ecommerce landscape for a loop, with consumers’ buying behaviors seemingly changing overnight. While some trends have accelerated, others have declined unexpectedly, and the impact your brand is feeling depends largely on your industry.

The pandemic has made predicting what the future will hold even more challenging. How do you forecast a Q4 that is still facing a hurdle as unpredictable as COVID-19? The truth is, you probably can’t. What you can do is leverage the data in our 2020 Ecommerce Paid Search Report from $400 million dollars of ad spend from 400+ industry-leading brands, as well as strategic insights from top PPC experts to get a major leg up on your top competitors.

In this exclusive executive report, you’ll uncover:

  • 15 secrets to fortify your multichannel marketing strategy across Amazon, Google, Facebook, and more.
  • In-depth analysis of the emerging trends redefining advertising and how to leverage them.
  • Underutilized new ad formats to enhance your audience targeting and customer acquisition.

We’re excited to share with you the data and insights that will help you grow your brand profitably in the new decade. Claim your copy today!

To both help speed up checkout times and prevent the spread of coronavirus by limiting human interaction, Walmart is testing a store without any cashiers or conveyer belts at checkout lines. If the experiment at the Fayetteville, Arkansas location is successful, Walmart may test the concept at additional locations.

In response to COVID-19, Walmart has already integrated a touch-free payment system where customers can add money to their Walmart shopping app and use their phone to pay.

COVID-19 has played a large role in accelerating pre-pandemic trends. Retailers and restaurants have been testing cashierless checkout for many years with order kiosks and self-checkout options. The concept of Walmart’s touch-free payment system is very similar to Apple Pay, which saw users increase from 67 million in 2016 to 441 million in 2019.

As ecommerce retailers continue to test new strategies and expand upon previous ones, the winners who see the most success will be the ones who test, test, test to figure out what works for their exact brand as opposed to trying to follow industry best practices.

May 28 update

Amazon’s coronavirus testing efforts

The same team who developed the Amazon Kindle e-reader, Echo smart speaker, and Fire TV stick is in the initial stages of building a robust COVID-19 testing network. Amazon’s plan is to build out robust internal testing labs to test its workforce for coronavirus.

The multi-state medical testing network would aim to fly samples from Amazon warehouses around the U.S. to a central hub in Hebron, Kentucky, where Amazon’s main air freight hub is located. There are currently job listings for microbiologists, medical researchers, legal roles, and design engineers to assist with the development of this project.

This development comes as part of Amazon’s $4 billion commitment to dealing with the effects of coronavirus. Funds will also be allocated toward providing personal protective equipment (PPE) for Amazon warehouse workers, cleaning of facilities, and increases in hourly wages. The ecommerce giant’s robotics group is also working to make face shields for frontline workers, roving bots that emit disinfecting UV light, and sorting machines that cut down on human contact.

Optimizing your paid and organic channels during COVID-19

Paid and organic search are the digital duopoly for audience acquisition that can transform your brand into an industry-leading force. To help you make the most of your paid and organic efforts, we partnered with the experts at Digital Commerce 360 to show you strategic insights to optimize and strengthen both channels in a webinar last week. A replay of that webinar is available now! You’ll learn:

  • Underutilized PPC customer acquisition strategies to increase revenue at a profitable return.
  • The hidden levers to SEO domination and the metrics to effectively track and monitor your performance.
  • Client success stories from brands just like yours showcasing the tremendous impact of a paid + organic advertising strategy.
  • Expert insights from Don Davis, Editor at Large for Digital Commerce 360, on the state of paid and organic search and how the Digital Commerce 360 Top 1000 is adapting.

                      April30 update

Fashion, luxury, and “new essentials” amid the coronavirus crisis

While fashion brands originally took a hit due to delivery delays and decreased discretionary purchases, the industry is starting to show signs of recovery. Transactions were up 23% last week and global sales are up 63% since the onset of the crisis. Luxury goods have also recovered slightly. Despite a 19% decrease in online traffic, U.S. sales have increased by 45%.

While this could be inflated by Mothers’ Day (celebrated in the U.S. on the second Sunday of May), global luxury sales are also up by 21%.

The pandemic has defined a new category of goods called “new essentials.” New essentials are products that help consumers feel more comfortable under stay-at-home orders. This includes office supplies, fitness equipment, cosmetics, housewares, home improvement, toys, and hobby-related products.

These goods account for almost 40% of all consumer spending right now. 30% of the total 40% is beauty and cosmetics. Both fitness equipment and toys/hobbies account for 29% of the new essentials spending.

As the world begins to revert back to old habits in the next few months, spending in this category is likely to decrease, but not completely disappear. We should soon see non-essential goods start to lift again, as well.

                          March 31 update

“The Dow is now up 20% from its coronavirus sell-off low reached on Monday.” – CNBC

Conversion optimization during COVID-19

Is consumer behavior in the current crisis an indicator of things to come? Short answer: Yes.

By utilizing specific statistical methods, testing micro-conversions like add-to-cart events or PDP views, and iterating on and expanding winning tests, you can test faster than your competitors and stay ahead of the curve.

Whether your industry is being affected positively or negatively by the crisis, it is more important than ever to be correctly managing your on-site testing program.

Our latest blog article on keeping up your digital marketing in this crisis covers how to win new customers and retain existing ones over the coming weeks and months by utilizing on-site testing to optimize your messaging and site experience. Our website optimization service lead, Brandon Howell, guides you through the best tips and strategies for conversion optimization in this crisis.

Travel industry updates

The travel industry is seeing some of the biggest hits from COVID-19 as fears and restrictions around travel grow. While some of the statistics are shocking, experts believe once the crisis subsides, the travel industry will recover – starting with local tourism.

                What’s a brand to do?

Determining how to proceed with events and keeping items in stock are only two items on the marketer’s to-do list as the coronavirus outbreak continues.

What other steps does your ecommerce brand need to take to thrive despite the COVID-19 disruption?

While overall ad spend is down, TV ad spend could see an uptick. With more consumers staying home to work and keeping coronavirus coverage up on their television, switching more of your ad budget to video platforms like television and even YouTube could be a good idea.

As we know, transparency is one of the most important characteristics that today’s consumers look for in a brand. When it comes to coronavirus, proactively addressing customer frustrations and fears (e.g. delivery delays, out-of-stock products, the cleanliness of your warehouse), will support your brand’s reputation and encourage customer loyalty.

Tell consumers about the coronavirus protections you’re putting in place. On top of that, consider providing your agents with additional training on handling any inquiries with appropriate sensitivity.

Additionally, make sure that your display advertising game is up to par. App downloads (especially of news apps) may increase as people spend an increasing amount of time at home. In addition to the delivery apps previously mentioned, app downloads in general have surged as a result of coronavirus. In China, app downloads over the first two weeks of February were 40% higher than the average for all of 2019.

As the coronavirus pandemic continues, pin this blog post to keep an eye out for updates on how the virus will impact your brand and ecommerce in general. We’ll keep updating it as more news comes in.

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