How online shopping can keep business active during the pandemic
Published On: 23rd April 2020
As more customers head online for their shopping, e-commerce can keep business active during coronavirus.
It goes without saying that the human cost of this virus has been horrific.
Economically as well, we’re starting to hear about how long we will be feeling the ramifications of this pandemic, with the Centre for Economic and Business Research (CEBR) estimating that this will cause the deepest recession since the financial crisis.
Unsurprisingly, the biggest hits have been to hotels, restaurants and bars, who’ve seen consumer spending fall by 32% since March, closely followed by clothing and footwear with a fall of 31%, according to the Resolution Foundation.
Our last blog looked at how events based companies were ‘Going Virtual’ to stay relevant. Today, we have another digital solution for companies to keep creating revenue despite having to shutter their brick and mortar bases: E-Commerce.
The value of e-commerce has never been higher with Kantar Media finding that in March the number of online grocery shoppers grew by 8%, while the amount they were buying grew by 5%.
Check out: Going Virtual – ALTER Agency’s last blog
It’s important to note that only 3% of those were found to be ‘New Buyers’, but the interesting thing is th
at they totally buck the normal bias for online shoppers.
Rather than the younger, affluent families from the south east that make up the majority of the model for online grocery shopping, these new buyers skewed totally differently:
38% were in the 65+ age group
37% were from Social Class C2/D
52% from Wales, Scotland, East & Midlands
This new market penetration is hugely important and should only grow as the lockdown continues and more people spend their time on the internet. There’s been a 79% increase in online presence in the UK since the lockdown started, and in Italy, which has been in lockdown longer than the UK have, has seen a 109% increase.
So, with a whole new market starting to familiarise themselves with e-commerce, it’s never been more important to perfect the approach, from search to sale.
The first step to a successful e-commerce venture is product. It’s all well and good having an online store, but if there’s nothing worth buying, it doesn’t matter.
As mentioned above, hospitality has taken the biggest hit so far, and you wouldn’t typically think of these as businesses with an online product to sell. This is where the value of ingenuity and innovation has really come to the fore.
A good product is one that we both want and need. It’s tough to magic up something that ticks both those boxes, but a huge range of restaurants, bars, drinks brands and breweries have done just that.
As consumers, what we all have a lot of now is time. We’re constantly looking for something exciting or different to fill our days with, and the following are just a shortlist of how some companies have capitalised on that need, in a way that we want it:
Patty & Bun
DIY Burger Kits with all the ingredients to make four of Patty & Bun’s famous burgers. The recipe is simple, it’s not too expensive and it’s something different from just ordering a takeaway burger (not to mention, it’s delicious!)
This package is really clever because it’s two brands working together to create a product.
A 29-minute meal designed by Joseph Otway, Head Chef at Higher Ground, who has recorded himself cooking the meal on Instagram for you to follow along from home if you don’t want to just use the recipe.
While cooking, you can also crack open the four pack of Cloudbwater Signature Helles beers. It’s a great meal in a box that will challenge your culinary skills, and helps reduce your longing for that ‘fancy night out’.
When this writer asks friends what they miss most about pre-isolation life, it’s beer gardens in local pubs.
Well, Signature Breweries bring you a Pub in a box, a pack containing a ranging number of beers, a glass, bar snacks, a music quiz and the all-important beer mat! Nothing can replace that pub feeling, but this goes a long way.
Each of these has found a way to use e-commerce to keep their business active during Coronavirus, by developing a product for this new normal.
Another fascinating insight by Kantar Media is that customer loyalty can be quite flexible when people do their first online shop, but once they’re satisfied with an online brand, they generally stay with them.
Ideally then, you want your product to be the first someone finds when these new shoppers turn to e-commerce. According to Junto Digital, 93% of online experiences begin with a search engine and 90.1% of those happen on Google.
If you’re reading this as a brand and want to test how you’re doing on that, head to incognito mode and search what you’d want to be found under. If you aren’t on that front page, then good luck getting people’s attention, as 75% of people never scroll past page 1.
So how do you improve that? SEO and content marketing are crucial in this sphere and a how-to guide on this would take pages and pages, but one of the headlines is simple(ish).
Brands with a strong propositions and great content cut through. Since lockdown began, Lululemon and Sweaty Betty got a 67% and 55% traffic increase respectively in part due to their proposition. Decathlon, who have been doing some very good and responsive quarantine content, have seen a big rise in organic search results.
If Product + SEO = Sale, the next step is delivery. The sudden clamour for online shopping has forced even the biggest brands to discover that they cannot match demand in their current business model. Some examples of these capacity constraints are Amazon Prime, who are no longer promising next day delivery, and grocery giants like Tesco and Sainsbury’s, who have 3 week waiting list for online groceries.
The smartest retailers and companies are addressing this quickly, by branching out to other digital platforms who do have the capacity, for example Uber Eats and Deliveroo.
In France for instance, major grocery Carrefour have started utilising Uber Eats as a delivery platform, and Amazon have recently had their purchase of a 16% stake in Deliveroo provisionally cleared.
A brilliant example of e-commerce keeping business active is shown by one of our clients: Bacardi.
Their ‘Raise Your Spirits’ campaign sees them team up with Deliveroo and over 120 independent bars, like The Proofing Room, in London and Manchester to offer cocktails via delivery.
Chris Tanner, of The Proofing Room, told the Spirit’s Business “The Bacardi Raise Your Spirits virtual bar has given us a huge boost. Having a way to earn money, keep busy and be creative while doing what I love most is fantastic.
“The current situation is changing everything for the bartender community, but this kind of online platform is a huge opportunity for us to step up our skillset and showcase our cocktail creativity.”
This campaign is a great example of a business overcoming capacity constraint, while creating a product for e-commerce where previously there was none, to increase revenue during the pandemic.
Obviously, this is quite a labour-intensive process to get off the ground, and in this time of limited cash flow, it may seem unwise to be making large investments. After all, this pandemic will eventually clear and the world will go back to normal…
Or will it? No one can know for sure. We can however get a look into the future by seeing at how China has responded to coming out of lockdown so far.
Kantar Media’s research shows that 85% of Chinese businesses have increased their investment in e-commerce and 81% have accelerated their digital transformation.
This is obviously not a guarantee of what will happen domestically. However, can a company risk not investing in e-commerce?
If a study by Alvarez & Marshal is to be believed, over half of major non-food UK retailers will run out of cash within six months, with sales forecasted to have fallen 70% during lockdown.
Primark are an unfortunate example of what happens when you ignore your e-commerce platform. The brand has previously said it cannot sell online, or delivery costs would force it to raise its prices. But since the lockdown, it has gone from £650m per month in sales to zero, boss George Weston told the BBC.
So, maybe the importance of e-commerce won’t last forever, and investment in perfecting an e-commerce model might not make or break your company in 2021, but it might be the reason a company survives and thrives.