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WFA’s resident specialist James Cole outlines the e-commerce opportunities emerging from COVID-19, and how to futureproof against potential threats.
The COVID-19 crisis has hit businesses around the world hard, with government responses, changing consumer behaviour and shifting supply chains, sending economic ripples through all industries. In this time of uncertainty and restructuring, however, many opportunities have opened up, and e-retailers who can adapt quickly are poised to benefit.
With strict social distancing and quarantine laws in place, physical retailers have suffered most, with many forced to close or drastically alter the way their stores function by limiting customers, reducing hours, or cancelling appointments. For those who have been able to remain open, changing behaviour from customers wary of crowds or unsure about what shopping is allowed have caused their own problems.
While this has been disastrous for many physical stores, those with a strong online presence have seen opportunities opening up. Australia Post market research found that in the eight weeks leading to 15 May 2020 the eCommerce industry in Australia had grown 80% year over year, with online purchases up 135% year over year in the week following Easter and 91% in the week leading up to Mother’s Day.
Benefits have been seen most by companies offering home-focused products as people have spent more time at home and had the opportunity to undertake projects. Google data suggests that window furnishings have been one area in which interest has grown substantially. Search interest for both ‘curtains’ and ‘blinds’ has risen steadily in Australia since March, and in June both terms are sitting at five year highs, and at double the search volume seen in June 2019.
While these trends only tell us how consumers have changed their searches and behaviour during the COVID-19 crisis and the long term impacts remain to be seen, there is reason to believe this shift will continue.
COVID-19 has caused an accelerated move to online commerce, but growth in this sector was already strong. In 2019, online retail sales in Australia saw an increase of 10.6% (seasonally adjusted), as reported by NAB. Previous years saw similar growth. This demonstrates an ongoing shift by consumers that is not unique to the coronavirus crisis. And there’s reason to look ahead to further growth: in more mature markets such as the United States and United Kingdom, online retail makes up over 15% of total retail sales, while in Australia it sits at just 9%. While exact figures depend on what is included and excluded in the measure, the message is clear. These figures demonstrate the potential for sustained growth in online retail penetration post COVID-19.
Further, these numbers only show purchases actually completed online. Many more people are researching purchases online and completing them through traditional channels once they find the business and product they trust. This behaviour has also grown as more people have been pushed online over the past months as the coronavirus crisis has forced many reluctant internet users online. The increasing opportunities available are clear.
With customers increasingly turning to online retailers, smaller players are more able to compete for business. There is no need for a physical location in every region to capture interest, and business no longer automatically goes to the shop with the best storefront or on the street with the most foot traffic. Instead, customers are won by the company that can best address their needs. Smaller businesses are often more agile and able to respond to these needs and the many uncertainties that will be ongoing post COVID-19. The flood of more customers online has created a unique opportunity for those who can attract this new traffic.
In light of these new opportunities, what can businesses do to position themselves well in the coming months and years?
This is the perfect time to invest in your online marketing. Take stock of what digital assets you already have and consider what can be improved for maximum return. Understand that your website is the new shopfront. Invest accordingly.
Know your audience and what they are looking for, and invest in creating content to meet their needs. Don’t be afraid to ‘give away’ knowledge – this establishes your expertise and creates the trust necessary for people to purchase. What’s more, research traffic to your site helps you rise up the search results, putting you in front of more people who are looking to buy. Whether you create the content yourself or engage the services of professional content marketers, there is ground to be won by sharing valuable information in a way that is understandable and useful to your audience.
Meanwhile, COVID-19 has been a reminder to invest in your processes. The impact of border closures, international quarantine policies and shifting exchange rates have caused fulfilment issues for many businesses that have simultaneously experienced increased demand. By improving your processes, from supply chain to customer service, you stand to reap the benefits of increased traffic and any investment poured into online marketing. Neglecting this will mean you miss out.
Online marketing and sales have the benefit of being extremely measurable. Now is the time to set up systems to track your performance, so you are able to review and respond accordingly. Knowing what your customers are searching for, how they find your site, and how they behave once there is valuable information that can be used to drive sales. Knowledge is power, and increases your ability to respond with agility through the uncertainty still to come.
While the lasting effects of the coronavirus remain to be seen, retailers can be proactive in positioning themselves to benefit through this time of uncertainty by responding to accelerating trends with measured investment in the right places.
James Cole is a digital marketing strategist and campaign manager with more than 10 years’ experience in the industry. He currently heads up WFA publisher Boston Publishing’s content marketing business, OBD Services.
