The coronavirus pandemic has caused widespread, serious health concerns, that along with upending our daily lives has also wreaked havoc on our global economy. While it’s imperative for brands to put safety first in times like these, it’s also smart to assess how COVID-19 will affect your business and keep tabs on market trends.
To answer some of those crucial questions, WITHIN, the world’s first performance branding company, is monitoring the effects of COVID-19 on e-commerce. Using data from a sampling of anonymized clients, WITHIN is tracking year-over-year trends in e-commerce revenue, ad spend, and conversion rates compared to the pre-COVID benchmark period. To help brands understand how their performance compares to their competitors as the volatility continues, we broke down 5 of the major findings from WITHIN's data so that brands and business owners can respond strategically at this time.
1. There’s More "Window-Shopping" Online These Days
It’s no surprise that consumers are stocking up on essentials and necessities to avoid leaving their homes, but what brands may find surprising is a consumer shift to "window shopping" online. Increased amounts of time at home provide consumers with justifications for "just looking!" browsing habits, with no real intention to buy. WITHIN recommends brands reevaluate their advertising campaigns with these changes in mind, and take action by reducing campaign budgets on advertisements that generate clicks without sales. Since some third-party distributors have put a hold on receiving non-essential goods at their fulfillment centers, brands that use those distributors should also consider transitioning to a fulfilled-by-merchant (FBM) model.
2. Consumers Are Still Shopping
Despite suffering a strong blow, fashion brands are experiencing a comeback with both Google and Facebook ad spend pushing stronger promotions. Conversion rates are also steadily rising and are nearly back to their pre-COVID benchmark. Finally, while revenue reached its lowest dip (-63%) just days ago, numbers are back up to -24% and trending upwards.
3. Brands With A Strong Brick-And-Mortar Presence Should Shift Budget To E-Commerce
As more and more customers are forced to shop from home, WITHIN recommends that brands with a strong brick-and-mortar presence shift their budgets from retail stores to e-commerce, specifically to TV and digital avenues. Some brands are already doing this, evidenced by a 33 percent increase in Facebook ad spend and an increase in revenue from -37 percent to -15 percent.
4. Luxury Brands Should Emphasize Comfort And Ease
Revenue for luxury brands has seen a sharp decline to -46 percent as investments across Google and Facebook ad spend have increased slightly. Now that consumers are actively avoiding crowded places and looking for alternatives, WITHIN suggests that luxury brands capitalize on a campaign of comfort, emphasizing that consumers can enjoy the convenience of their service from the comfort of home.
5. Subscription & At-Home Convenience Brands Should Focus On Profitability
After shooting to a +268 percent revenue day over the weekend, subscription and at-home convenience brands are back down to 210, which is still well above the original pre-COVID-19 benchmark. These brands are taking full advantage of an increased demand for services, with Google ad spend at an eyebrow-raising 316 percent. However, there is a slight decline in conversion rates (down from 170 percent to 124 percent) as "window shopping" is likely increasing. To cope, WITHIN recommends considering a shift from goals like ROAS (Return On Advertising Spend) to strict profitability-based goals.
This article is sponsored by WITHIN. For daily updates on e-commerce trends, visit here.