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Data Snapshot: The Impacts of COVID-19 on Ecommerce

Lauren Nadan Sr. Director | Performance Marketing

As customer behaviors change in light of the COVID-19 outbreak and more and more activity moves online, it’s extremely important for ecommerce digital marketers to understand how to best connect with and serve their customers. We’ve pulled together some observations and recommendations based on the trends in data we’re seeing for our retail DTC clients.

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What are some of the impacts of coronavirus on ecommerce?

DTC brands see more opportunity

Unsurprisingly, the current uncertainty in the markets means that consumers are scaling back spending in non-essential categories and instead are spending more in essential categories like food and medical supplies. As a result, we’re seeing big brands in these non-essential categories pull back spend, particularly on brand awareness buys, which is contributing to a decline in CPMs across media platforms.

That opens up an opportunity for DTC disruptor brands to take advantage of lower CPMs and focus on direct response marketing efforts.

Brands rely on product relevance in a WFH world

While the cost of media has gone down, we’ve also noticed performance declines in efficiency metrics such as return on ad spend (ROAS) and CPA. But that trend doesn’t hold true everywhere: there are brands that are continuing to drive strong conversion volume and are seeing increased conversion rates WoW, MoM, with maintained or lower CPAs at scale. Those brands generally have products on offer that are necessary or popular in the new normal: stronger performance is driven by their product’s relevance to consumers, such as casual wear.

Brands can still improve performance over time

As time progresses and consumers adapt to the ‘new normal,’ purchase volume and revenue are decreasing at a slower rate than spend decreases. That’s good: it means there are strategies we can implement to improve performance over time for brands. Also important to note is that weekend performance was strong for several brands, which we speculate is due to consumers spending more time at home during these days shopping online.

Unsurprisingly, we’ve also seen brand search impression volume trending down. Brands are competing for attention with the COVID-19 virus news and updates and the election, among other things, all while conserving their disposable income.

Don’t turn the lights out: it’s still important for brands to have a presence in branded search to ensure you’re capturing high intent users during this time.

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How should ecommerce brands prepare for post-COVID-19?

  • First and foremost, be present across platforms. Even if performance warrants scaling back spend to some degree, it’s never good to shut off accounts entirely and lose the algorithmic learnings gained over time. You also shouldn’t look at the situation as black and white: there will be days when there’s improved performance, and you want to be present to take advantage.
  • Continue to align marketing programs with evolving business goals – for the majority of our clients, that means focusing on efficiency right now. At the same time, lean into opportunities to capture scale – whether that’s on certain days (promotions, weekends) or new audiences based on CVR (both acquisition and retention).
  • Make sure you’re emphasizing products that are relevant to today’s consumer mindset. As more people work from home, focus on items related to loungewear, home goods, health and wellness, and essentials. Ensure messaging remains relevant as well. Continue testing to see what resonates over time.

The conversation surrounding this pandemic is constantly evolving. If you’re interested in being a part of it, join our LinkedIn community of thought leaders and digital marketing experts sharing insights into how we can get through this together.

Coronavirus COVID-19 Digital Marketing Ecommerce Retail & Ecommerce

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