The Future of Commerce Post COVID – Second Wave
The COVID-19 crisis has changed the way people do business and purchase products. Although some sectors are performing well and others are suffering, the current environment has increased demand for online products and has forced businesses to innovate.
Recently our analytics team at Revuze ran a deep analysis for H1 2020 for numerous industries, the commonality with all reports was that customers were simply looking for items with features they need and are in stock. In other words they were feature oriented and not brand oriented, this is simply a continuation of a trend that began before COVID-19 and is likely here to stay. In addition, companies have had to focus on reaching their customers directly rather than simply investing in brand equity.
Many of these insights were confirmed in a Zoom interview with Richard Few, founder of Salesgeek about the volatile environment created for businesses in the wake of COVID-19. Since his company provides sales-boosting services and consultation for many large and small businesses I asked him to describe the general feeling among his clients in the first wave of the COVID-19 crisis as cautious and uncertain.
“Everyone entered preservation mode,” he said. Many of his clients told him they wanted to retain payments, while others put potentially lucrative projects on hold and were risk-averse.
Few added that the environment was not bleak for all businesses. Some spaces boomed in the crucial period of the spring of 2020 while others were at a complete standstill. It was evident that brick-and-mortar counterparts of all segments, such as fine restaurants, movie theaters and gyms were all hit hard by the crisis, but take-out services such as Grubhub, Netflix and streaming services benefited from social distancing.
Supermarkets performed well as people stocked up on necessities and went online for groceries. The hospitality industry and travel screeched to a halt and vehicle leasing were also negatively affected.
In May, many people started to return to work and to stores and economic activity resumed. Not only did some businesses bounce back quickly, but others performed better than they did before the crisis.
This was mainly true of supermarkets and some retailers that could take online orders. There was a 129% year over year growth in April 2020 in US and Canadian online orders. In addition, April 2020 year over year revenue growth rose 68%.
Demand for certain products soared because of social distancing and COVID-19 regulations. For example, because of school shut-downs and the necessity of working from home, sales of ink cartridges rose 287% M-O-M growth in March and April, according to Richard. Sales of cleaning products also rose significantly. It can be inferred that printing equipment rose because of the need to print documents for work at home and homeschooling. I also remembered that Barak Yaari, the CTO of Scrapezone mentioned in a recent round table discussion in June that Most of the changes in the Office Supplies category were due to large corporate offices being closed down temporarily and according to their report on the home office supplies, the most notable change was in printing papers and ink cartridges.
There was an expectation that demand for cleaning products would wane as people returned to work, but not only are sales of cleaning products at the same level they were in early spring but are rising.
What This Means for the Future of eCommerce
Despite the continued uncertainty caused by COVID-19, there are some takeaways that can be helpful. There were dramatic changes in sales of certain products and services because of the crisis and there is likely to be more volatility through the end of the year.
In addition to changes in sales, the ability of companies to do face-to-face meetings has been compromised by COVID-19. This should continue as in-person meetings will be replaced with Zoom or any other video conferencing technology.
One bright spot for eCommerce is that more customers are getting in the habit of making their purchases online than in physical stores. Lockdowns and supply chain issues that caused popular brands to be out of stock encouraged consumers to do more research online and look for lesser known brands. This is great news for eCommerce companies just starting out and established companies developing their online segments.
Micro-eCommerce companies that sell a highly focused selection of products only on the web have boomed since the COVID-19 crisis began and should continue to get a boost. With the uncertainty about the future, bringing more sales online will be a strategy that will work.
Consumers are not going to buy products simply because they are labeled as Nike or Coca-Cola. The pandemic has created a focus on what customers actually want and need. As inventories ran out in the early spring 2020, customers switched brands and tried new products.
Going forward, customers will be accustomed to thinking outside of the brand box and companies must innovate and focus on the features of the products they are selling. According to one study, 63% of customers expected companies to provide new products and services more quickly than ever and 56% said innovation was a high priority when choosing a product.
Focusing on the Customer
The pandemic has created an environment where it is more crucial than ever that companies find ways to reach their customers directly. Analyzing data on consumer behavior, especially in reaction to the ongoing crisis, can be a key to where to focus marketing efforts and product offerings. Providing short videos that can be accessed on your customers’ phones can be a great way of introducing them to your new products. It is estimated that 50% of shoppers use videos to help them decide what to purchase.
With the uncertainty ahead, companies need to innovate and keep tabs on their customers to compete in a volatile marketplace. Developing effective eCommerce solutions, focusing on feature marketing rather than brand marketing and reaching customers through various media, including videos can ensure that whatever the future holds concerning the pandemic, companies will not only survive but thrive.