Do not panic, instead look for silver linings.
Throughout the Coronavirus outbreak we’ve been monitoring the impact of the pandemic on our clients’ media and sales performance. Consumers are cutting back for a host of reasons, including fear of infection, changes in personal finances, and isolation requirements. But we’ve identified an immediate and long-term opportunity for those with a strong digital commerce presence.
Here are the key takeaways.
Not surprisingly, our clients that have more exposure risk associated with their products and services are feeling the economic impacts of social distancing and infection concerns. These clients are primarily in spaces where physical contact between people is essential to provide the service or product they sell, and that service or product isn’t considered essential to day to day life. One might call these “high-touch luxury goods.”
And while products considered essential are still negatively impacted, it’s vastly less so. Most consumers seem willing to take the calculated risk to purchase these products and services though at a reduced rate than pre-COVID19.
We are seeing that for brands that are operating entirely in an ecommerce environment or have a very strong ecommerce presence where their goods or services are very “low touch,” two things are happening:
1. Sales are not waning. Our ecommerce clients in the apparel space that are still seeing YoY gains in sales volumes and revenues.
2. Sales on Amazon are increasing dramatically. This is likely because people who are not regular online shoppers are going to the most well know etailer in lieu of traditional brick and mortar locations. For these brands, we have assessed opportunities in further marketing investments aimed at informing these “newer to etail” consumers about the brand while also pulling them into the brand’s owned ecommerce flow where margins are typically higher than for products moved through Amazon.
Changes in consumer behaviors continue to remain a day-by-day situation with investments in marketing requiring close monitoring. However, it appears that COVID-19 is not affecting many etailers and brands with strong ecommerce capabilities as negatively as may have originally been anticipated. And, in some cases, has actually provided those brands with a host on traditionally non-ecommerce shoppers to target and message.
With this in mind, our advice to brands with strong ecomm capabilities is this: These are trying times that require quick thinking and movement, but they should be approached in a measured way and with a level head. The current situation presents a new opportunity to speak to people who otherwise never would have considered buying your product online. And as the economy reopens, brands must think very strategically with a comprehensive plan to reach that new key audience segment that is showing up as they are forming new habits.
Bottom line: Do not panic, instead look for silver linings.