What Changes is Coronavirus Bringing to eCommerce?

    coronavirus-changes-ecommerce (2)


    It has been almost four months since China confirmed its first case of COVID-19. Since then, the outbreak has spread globally. With the virus now at the forefront of everyone’s minds, dealing with its impact on everyday life has become a necessity.  


    The economic disruptions caused by the virus are being reflected in decreased valuations and increased market fluidity. But in times where many areas of business are struggling, there are opportunities for others to flourish. One area of business that is helping economies stay afloat is eCommerce.


    As more businesses turn to online retail in turbulent times, many will hope the existence of eCommerce may limit the harmful impact of coronavirus on the global economy.


    And as Amit Ray once said: “every challenge comes with rainbows and lights to conquer it.” 


    So how exactly  Coronavirus impcat on eCommerce landscape looks like? And how will things look in the long term?


    Table of Contents


    Coronavirus and Social Distancing - Behavioral Impacts

    Which industries have developed since COVID-19 took hold?

    Industries that have been hit hard

    COVID-19 - opportunities and challenges for eCommerce

    Opportunities for eCommerce during Coronavirus Pandemic

    Challenges for eCommerce during Coronavirus Pandemic

    COVID-19 Disruption - strategic takeaways for online retailers and advertisers

    Practical tips for your campaigns in the age of Coronavirus


    Coronavirus and Social Distancing - Behavioral Impacts


    Coronavirus hit the world before anybody really knew what was happening. New laws and rules were put into place. Suddenly, the world was a different place. This led to a stage of panic in many countries. With people making impulse purchases, buying in bulk and being proactive with health purchases. However, as people adapted to their new enforced lifestyles, panic purchases slowed in many nations. The result was only a minor change in sales patterns.


    This is further highlighted in Nielsen’s study of the U.S. market. The study shows how quickly consumers processed the new information on COVID-19, and then altered their purchases processes.


    Changes in purchasing behavior were also noted due to social distancing. One month ago, before the official lockdown, nearly half (47.2%) of US internet users were avoiding shopping centers and malls. Now, when the fallout took a turn to the worse, roughly three-quarters (74.6%) should steer clear from shopping centers altogether according to the poll. 



    source: emarketer.com


    As more consumers turn to online shopping to buy everyday needs, shipment delays have also increased. So far the increase in online shopping is positively affecting online retailers. However, the concern is that the short term benefits could be outweighed by supply chain issues. The question now seems to be whether companies can adapt, and whether consumer behavior after coronavirus pandemic will remain stable.


    Additionally, the percentage of digital sales is fluctuating between sectors. Whilst some sectors are seeing staggering rises in buyers, others are seeing a decrease. One example of this is electronics, which is currently at 42.7%. Whereas auto & parts is at 3.9%. Grocery delivery is also seeing large boosts due to consumer concerns regarding stores.


    Advertising spend has also seen a decrease in sectors such as entertainment, retail, and FMCG. This change is largely due to cinema’s and other similar forms of entertainment ceasing to operate due to the virus. In contrast, this has seen a rise in the use of online, on demand media services, such as Amazon Prime, Netflix and Disney+.


    covid-19-google-ads-results-mediasource: wordstream.com


    These drastic behavioral changes are indicative of current conditions. And whilst it may be difficult to measure how long these conditions will endure, businesses are being forced to adapt. Supply chains are being pushed to their limits, whilst new short-term and long-term tactics are being developed. Many companies are already considering post-pandemic strategy using thoughtful tracking processes.



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    Which Industries Have Developed Since COVID-19 Took Hold?


    COVID-19 has made a substantial impact on businesses everywhere. Many will struggle to ever recover. Despite that, other sectors have seen their business boom. Experts from wordstream.com studied data concerning their client’s accounts and noted large changes in patterns. Some of those patterns were expected, such as health and medical products. However, others were a surprise given current conditions.


    People care about their health, well-being and social relationships


    Non-profits and charities, self-care all saw an understandable rise in interest. less predictably, so did greetings, gifts, and flowers


    This information indicates a direct correlation between the emotions social distancing has created and the way people spend. Facing a very real threat, consumers are more willing to support their vulnerable ones. This is further enhanced by social distancing, which seems to have created a need to strengthen bonds with loved ones. Simultaneously, they are also considering their own well being. 


    These new consumer needs have seen a 30% increase in conversion rate for gift baskets. Whilst floral arrangements have seen a staggering 43% increase in their conversion rate.


    Consumers need expert support in business and finance management


    The current uncertainty surrounding business has led to more consumers searching for professional support. Larger businesses, such as Google, have reacted by publishing guidance for small businesses. This is with the hope that it may help smaller businesses through challenging times.


    Overall, business management searches grew by 23% since February 23. It is also worth noting the substantial decline in CPC in the usually competitive Finance Sector

    covid-19-google-ads-results-financialsource: wordstream.com


    Working & living remotely create new demands


    Due to the strict limits on group size and the imposition of social quarantine, businesses are shifting to remote work. This has seen a large increase in people searching for video conferencing solutions. 


    Google Trends data from March 2020 highlights the increase in people searching for video conferencing solutions. 





    According to wordstream.com office supplies became a sudden breakout industry. Searches for office supplies increased 90%. Whilst paid search ad clicks increased 35%, and search conversion rates increased 41%


    As people abandoned traditional retail for its online counterpart, searches continued to highlight that transition. Packing and shipping supplies more than doubled their search ad conversions (up 123%) and search ad conversion rate was up by 107%



    covid-19-google-ads-results-packing-and-shippingsource: wordstream.com



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    Industries that Have Been Hit Hard


    Travel & Hospitality

    The travel & hospitality industry is one of the hardest hit by Coronavirus. Experts are now predicting a 15% year-on-year decline in travel ad revenue. 


    With most businesses in the sector turning to damage limitation, it seems to be a situation where surviving at all costs is all that matters. Many travel advertisers are struggling to convert new searchers on their site. And with no clear end in sight, things will only worsen in the near future.


    Contrastingly, searches for flight cancellations and delays have reached a new high. With many of those searching clicking on the businesses adverts to pursue their cancellation. In order to relay some of the disruptive searchers, solutions such as new negative keywords (such as COVID-19) could be employed. Whilst alternative promotions could be made. Including travel insurance and cheap future flights.


    And just as the travel and hospitality market is currently experiencing tremendous declines, there is still the chance for quick recovery. International business needs and people’s willingness to travel may be a huge advantage to take and get back on track.

    Apparel & Fashion


    The apparel & fashion industry is also suffering due to COVID-19. Products “Made in China” have dropped 16% in sales (In February alone). As a sector that is highly dependent on an Asian workforce and supply chain, apparel may struggle in the foreseeable future.


    Brands have since shifted focus to selling online. However, many have failed to adapt their advertising data feeds, with out of stock products being frequently advertised.

    Luxury Goods


    Coronavirus is also taking a toll on luxury brands. Forecasts show a 35% decline in Chinese luxury spending in the first quarter. 


    The fuel for luxury goods sales is the Chinese Market and in most cases, through onsite sales. International luxury fashion houses have closed the majority of their stores due to the coronavirus fallout.


    In the shadow of a recession, purchasing patterns will change. Consumers may be more likely to reduce their consumption of luxury goods, and instead focus on necessities.



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    COVID-19 - Opportunities and Challenges for eCommerce


    According to US government, online sales in Q4 of 2019 were 11.4% of total retail spending. The forecast for eCommerce in 2020 estimates that level may rise to 12% due to the impact of Coronavirus.


    This observation is indicative of current consumer behavioral patterns. It also highlights how trends can be determined by the fluctuating situation.


    At the present time, nobody can predict the full-blown impact of coronavirus on the global economy. But it is still possible to identify opportunities, even in a disrupted market.


    Opportunities for eCommerce during Coronavirus Pandemic


    • Consumers will shift towards online purchasing, to avoid public places. Services such as home delivery, and brands like Amazon will flourish. And the online divisions of major retailers will become major beneficiaries.


    • Consumers who purchased online during the holiday season were observed to repeat this buying pattern post-holiday. This highlights that consumers may return to the same purchasing process again, and may do so after the Coronavirus pandemic.


    • As observed in some parts of China, there’s less competition for advertisers still committed to running campaigns. However, currently these advertisers are running outdated advertisements that aren’t relative to the situation. If the campaigns are altered to the current social environment, they could be more fruitful.


    Challenges for eCommerce during the Coronavirus pandemic


    Like with most scenarios, with opportunity comes challenges. Taking an attentive look may help eCommerce to mitigate the expected recession. Challenges that need to be mulled over with the same concern. Some examples of potential issues are:


    • Supply chain issues - product shortages and potentially declining consumer demand could also blunt e-commerce growth – if the economy falters or goes into recession.


    • Creating convenient ways for people to shop with pick-up, drive-up, and same-day delivery.


    • The surge in online orders heaps pressure on businesses to fulfill them. In some instances, this pressure is getting too much for businesses and threatens to upend their e-commerce operations.



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    COVID-19 Disruption - Strategic Takeaways for Online Retailers and Advertisers


    1. Look ahead and reframe your efforts.


    Make a crisis plan and response. Pay attention to your strategies, including your strategy for post-Coronavirus. This process must be fast and needs to react to evolving circumstances.


    2. Shift your sales channel mix


    Person-to-person and bricks-and-mortar retail are already restricted in affected regions. Redeploy sales efforts to new channels both in B2C and B2B enterprises. If you’re selling onsite only, consider transferring your business online. If you’re already active online, utilise additional marketplaces.


    Get creative on social media. Stay engaged with communities and support people in difficult times. They will appreciate this and may reciprocate when in a position to do so.


    3. Respond to new needs with innovation


    New customer needs will also create the requirement for innovation. When threatened by crisis, many companies will be focused on defensive moves, but it’s wiser to focus your attention around emerging opportunities.


    4. Utilize all your assets to stimulate and sustain demand


    Maintain or even boost digital marketing efforts for the foreseeable future. Social selling seems to be a better idea than push marketing at the moment.


    5. Reconsider your discount strategy 


    Discounts don’t have to be drastic to entice consumers. Utilize smaller sales and category specific promotions.



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    Practical Tips for Your Campaigns in the Age of Coronavirus


    Plenty of worldwide phenomena affect PPC performance. Coronavirus is no exception.


    Measurement strategies and goals should be adjusted for uncertain times. It is also a prime opportunity to build long term relationships with customers for the future.



    covid-19-ecommerce-conversion-rate-trendsource: blog.edrone.me, data from March 25th 2020

    Data comes from edrone customers, amounts and values have been changed to reflect trend, but not show actual volumes.

    1. Revisit your negative keywords list

    With consumer behavior and searches changing so rapidly, you may find yourself showing ads for new search queries. These queries may not necessarily convert all that well. It is especially important now to wisely allocate your advertising budget and not waste money on terms that will drown your money.

    Go head and check your search terms report and make sure to add the non converting terms to your negative keywords list.

    2. Focus on bottom-of-the-funnel channels/advertising

    Rapidly changing customer behavior and increasing uncertainty places brand awareness campaigns at a disadvantage. It’s recommended to focus on the bottom of the funnel.


    • Go with Facebook retargeting and show your ads to people who already viewed your products in your store. 
    • Utilize Customer Match audiences in Google 
    • Identify the local channels that have a high trust level among consumers

    3. Keep an eye on automated bidding


    The automated bidding is using smart algorithms to decide on bid optimization. The only problem is that the algorithm has learned from the ‘regular’ situation, not a crisis situation. In order to avoid trouble make sure either place strict budget cups or consider switching to manual bidding for the time.


    4. Revise your advertising portfolio

    Focus on the products that will convert and will drive the ROI for you, exclude other products from the feeds.



    5. Take device preferences into consideration

    People are staying at home and they may use their PC a bit more than their mobile. Make sure to include this in your strategy and optimize budget allocation per device.



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    What we Can Learn from Past Pandemics


    The Coronavirus isn’t the first time these sorts of disruptions have hit retailers and their customers. Long before this outbreak, the SARS virus in 2003 was a turning point for eCommerce. 


    In 2003, Chinese pioneers Alibaba and JD.com faced and overcame the challenge. This could be used as inspiration for online retailers now.


    • JD.com resorted to selling electronics on internet forums and QQ chat groups. Later the bulk of resources were devoted to the online business. This ensured growth and allowed the brand to become China’s largest online retailer of electronic products.


    • Alibaba’s B2B e-commerce business thrived after foreign businessmen cancelled trips to China. This is how registering on its platform began. The experience partly led to the birth of Taobao, which surpassed eBay to become the largest C2C marketplace in China.


    The sector might've been relatively primitive back then, but the outbreak made many retailers turn to the online platforms that hadn’t been forced to close.


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    Coronavirus has created a new challenge for many online businesses. We have observed growing concerns regarding people and companies that are exposed to financial risk. But still, some companies appear well-positioned to benefit from the shifts in consumer behavior caused by the outbreak.

    We are going to monitor, update and share new insights on a regular basis. Our goal is to help merchants grow, especially during these challenging times.

    Please don’t hesitate to reach our support team and let us know if we might help you in any way.


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