There are few topics in the last week that have been more polarizing than how and when governments should begin allowing public spaces and businesses to reopen. Understandably, it’s a tough dilemma to be caught in for businesses that need to generate revenue and want to ensure the safety of their employees & communities.
“It is not going to be a light switch that we say, ‘OK, it is now June, July, or whatever, click, the light switch goes back on. It’s going to be depending where you are in the country…” – Dr. Anthony Fauci
While it may seem bleak, there is a plan. Each state has formulated a plan based on the particular criteria of their localities. It’s clear that rural areas shouldn’t be made to follow the same path as urban centers.
Some states have even opened up public access to beaches, restaurants, salons, and barbershops (because everyone could use a good haircut at this point).
Even with preparations being made for cities, counties, and states to start easing restrictions on businesses, consumer patterns are sure to be definitively altered.
The correlation between consumers being sequestered to their homes and buying more online is easy to make. Consider a simple thought experiment when looking at statistics from companies like Waze where you can see that people are listening to the government’s recommendation to stay at home, which is to point out that if you’re at home you can’t make in-store purchases, so if you want to shop you likely have to buy online.
However, on the contrary, businesses that can pivot to online or are already set up to service the bulk of their customers online are primed to make an impact.
Online Buying Trends by Category
Bird’s Eye View
- Average order value across eCommerce has hit an all-time high:
- Fashion spending has seen an increase with a particular focus on running shoes. Millennials and Gen Z seem to be spending more than older cohorts in this category.
- Health & Beauty seems to be consistent among customers on their Klarna’s app with an uptick in millennial spending.
- The Home & Garden segment seems to be growing (no pun intended) with people gearing up to spend more time at home.
- Consumers are buying more electronics as they venture to entertain themselves at home and continue working from home.
- People are eager to stay active during safer-at-home orders.
Consumers are interacting with brand communications differently as well, according to insights from Klaviyo:
- Email delivery, open, and click rates are up. This trend makes it clear that while brands are looking more to consumers’ inboxes to drive sales, recipients are actually paying attention and interacting at a higher rate.
- People are paying more attention to brands. It seems like email is becoming increasingly more influential in the purchase decision as people spend more time on their devices.
Lots of companies are compensating for shortfalls in revenue during the coronavirus pandemic by slashing marketing and advertising budgets leading to decreases in ad prices. Companies that rely on physical retail are facing difficulty where brands that specialize in online retail have an opportunity to steal some share of voice and potentially a chunk of market share.
- Beauty brand Insert Name Here has seen a drop in ad cost of 35%, leaving them to snatch up digital ad space and increase spend by 50-100%, according to NBC News.
- The same article touts that ad prices on Twitter are down 20-40%.
- Magna Global sees traditional TV ad revenue decreasing by some 13%.
- Investment firm FirstMark Capital has seen a decrease in ad cost of 30-35% across its portfolio.
Consumers Want Ads
Consumers want brands to reach them. The caveat here is that brands need to rethink their messaging because overwhelmingly (over 70%) of consumers want ads to be tailored to their new reality, as stated in a Kantar survey. A sentiment that is corroborated across a number of recent polls.
It’s time to double down on your advertising. Ecommerce and direct to consumer brands can make waves during coronavirus’ inherent shift to shoppers going from brick-and-mortars to having products delivered to their doors.