Published March 12, 2020
Last updated October 22, 2020
On top of health concerns, brands across the globe are worrying about how coronavirus (COVID-19) will impact ecommerce as a whole.
Ecommerce, B2B, B2C, and brick-and-mortar brands alike are all bracing for the impact that coronavirus will have on their business. In this article, we’ve collected everything your brand needs to know about coronavirus and ecommerce, as well as what you can do to lessen the blow.
Note: Keep coming back to this post as updates on coronavirus and ecommerce continuously roll in. We’ll be adding updates throughout the pandemic to help keep you in-the-know.
New Content: 2020 Holiday Retailer’s Ecommerce Playbook! Digital holiday sales will grow more than 200% this year. This major ecommerce shift, combined with the uncertainty and general ecommerce shift caused by COVID-19, has set ecommerce brands up for an unprecedented holiday season. In our 2020 Retailer’s Holiday Ecommerce Playbook, you’ll discover insider insights from experts at ROI Revolution, Attentive, Pepperjam, + Trustpilot to overcome your brand’s biggest Q4 challenges.
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Prime Day amid the pandemic
After being postponed from July to October due to the coronavirus pandemic, Amazon Prime Day 2020 went off without a hitch.
The annual sales event took place on October 13 and October 14 this year across the U.S. and 18 other countries. Prime members saved more than $1.4 billion over the two-day sales event, according to a press release from Amazon.
Digital Commerce 360 estimates that despite the pandemic, Amazon Prime Day 2020 sales hit $10.4 billion – up from $7.16 billion (+45.2%) over Prime Day 2019 and from $4.19 billion (+148.2%) over Prime Day 2018.
Dive deeper into the Prime Day wins that happened despite COVID-19 in our Prime Day recap & stats blog post!
The data is in: Online shopping habits since pre-COVID-19
36% of consumers shop online weekly since the rise of COVID-19, up from 28% pre-pandemic, according to new data from Digital Commerce 360.
29% say they currently shop more online than in person, while 35% have an even mix of online and in-store shopping.
What about after coronavirus subsides, though? 28% say they will continue to shop mostly online after the pandemic, with 39% saying they will shop both online and in-store, 24% saying they “can’t wait” to shop in-store, and 10% not sure.
64% of shoppers surveyed want mobile and contactless pickup options, with 79% saying contactless store pickup is very important.
60% want curbside pickup options. 85% of shoppers have significantly increased their use of the curbside pickup option over the course of the pandemic.
90% of consumers prefer home delivery over a store visit, 80% are likely to use digital communications with store associates, and only 28% plan to increase in-store shopping between August 2020 and February 2021.
Executives’ optimism toward economy improves
According to new research from McKinsey, 57% of executives expect the economy to improve six months from now, with 29% expecting the economy to worsen – the most optimistic outlook since the beginning of the pandemic. 14% of executives expect economic conditions to remain the same.
In March, 25% of executives expected the economy to improve in six months, with 58% expecting it to worsen and 17% expecting it to remain the same.
April has had the worst outlook out of all of seven months of COVID-19 in the US, with 66% of executives expecting it to worsen in the following six months.
Executives’ outlook on profitability has also improved, with 53% expecting to see profits in the next six months compared to 33% in March. While over half (54%) of executives surveyed in April expected profits to decrease over the next six months, that number is down to 31% now – the lowest it’s been since the beginning of the pandemic.
Executives also increasingly expect customer demand for their brand’s products to grow, with 53% expecting an increase compared to 42% in June. 23% of executives still expect a decrease in customer demand over the next six months.
Turbocharged ecommerce shift brings 31.8% QoQ increase
Consumers spent nearly $212 billion on ecommerce between April and June 2020 according to new data from theUS Department of Commerce.
This nearly 32% increase clearly paints the picture of ecommerce’s growth during the pandemic. US ecommerce sales were only up 2.4% quarter-over-quarter in the first three months of the year. Now, ecommerce accounts for 16.1% of all US sales, compared to 11.8% in Q1.
Retail sales, however, continue to decline, down 3.9% QoQ in Q2 after a 1.3% decline in Q1. Grocery, office supplies, electronics, and, of course, essential goods are some of the categories that have grown the most online during the pandemic.
BOPIS sales up 259% due to COVID-19
Buy online, pick up in-store (BOPIS or BOPUS) surged 259% YoY in August 2020 due to the coronavirus pandemic, with many shoppers wary about the safety of in-store shopping. This equates to a 59% month-over-month increase in August compared to July.
BOPIS also brings consumers the immediate satisfaction of receiving their item almost immediately without having to search for it in the store or wait for it to be shipped. This is an especially attractive option considering delayed delivery and shipment have been significant issues for consumers during the pandemic.
According to an Adobe consumer survey, 33% of consumers have received online orders later than expected and 30% prefer BOPIS or curbside pickup over delivery.
Coronavirus accelerates shift to ecommerce by 5 years
As the pandemic has reshaped life as we know it, it’s also accelerated many trends – but the biggest of these trends may be ecommerce. The shift toward ecommerce was happening before COVID-19, but according to new data from IBM, the pandemic has accelerated consumers’ shift toward ecommerce by five years.
Ecommerce is projected to grow by nearly 20% YoY in 2020. This growth was even more pronounced at the beginning of the pandemic, with U.S. retail ecommerce up 44.5% YoY in Q2. Also in Q2, Walmart’s ecommerce sales were up 97% YoY and Target grew its same-day fulfillment services by 273%.
The top categories consumers have gravitated toward during this shift are alcohol, home improvement materials, and groceries (up 16%, 14%, and 12% respectively), with apparel seeing significant declines.
U.S. department stores may not survive the pandemic
Will the pandemic be the end of department stores? Department stores have held strong to their fashion and apparel categories, but with apparel sales in a free fall across the board, many department stores are hurting as a result of COVID-19. Many major chains are being forced to file for bankruptcy or even liquidate entirely.
According to recent research from the Commerce Department, apparel sales were down 20% YoY in July 2020 after a 20% decline in June.
“Department stores’ decline has been masked by the survivors like Macy’s […] But that gig is over. The end was in sight pre-Covid.” said Mark Cohen, former Sears Canada CEO. “The mall-based department store is in its last stages.”
With market share being ceded to retail giants and big box retailers like Amazon, Target, Walmart, and Best Buy, department stores and malls have slowly but surely been on the decline for decades. Department stores accounted for 14.3% of retail sales in 1992, which was down to 3.7% in 2019.
COVID-19: H1 2020 update
According to new data from Digital Commerce 360, online spend with U.S. retailers grew 30.1% – that’s $60.42 billion – year-over-year for the first six months of 2020 to reach a total of $347.26B. From 2018 to 2019, ecommerce sales grew just 12.7%.
Total retail sales were up 4% YoY, with online spending representing 18.6% of this growth.
In Q2 2020, $1 of every $5 spent by U.S. consumers came from online orders. Online spend with U.S. retailers grew 44.4%, with a total of $200.72B spent during this period.
The ecommerce sales growth is slowing now that many stores across the country have been reopening. Ecommerce sales were up 76% ($73.0B) YoY in June 2020, followed by 55% ($66.3B) in July.
COVID-19 news & industry updates
- Prime Day’s proximity to Cyber 5 introduces yet another new factor to consumers’ changing holiday shopping habits in 2020. In this video replay, our ecommerce experts pinpoint online strategies that are here to stay, top considerations to keep in mind as you plan for the unprecedented, and how you can still leverage your 2019 data to forecast for the holidays.
- Next week, Amazon will host Amazon Accelerate, a three-day virtual conference designed to help SMB Marketplace sellers navigate “a strong finish to 2020 and beyond.”
- Digital initiatives like BOPIS (buy online, pick up in-store) have been crucial for big box retailers during the pandemic, with BJ’S Wholesale announcing big plans to expand these initiatives after seeing 300% digital growth YoY.
- According to eMarketer research, the number of smartphone food delivery app users is forecasted to rise 25.2% this year, with adoption anticipated to continue through 2023.
- Home Depot had a very successful Q2 due to do-it-yourself projects taking off during the pandemic, with sales soaring 23.4% YoY at a 10.1% higher AOV and transactions increasing by 12.3%.
COVID-19 industry updates
For better or for worse, no industry has gone untouched by COVID-19. In every edition of our biweekly COVID-19 Compass newsletter, we share updates from various industries on how they are being impacted by the pandemic. Here’s a look at what you may have missed.
PS: If you’re not currently signed up for the COVID-19 Compass, you can subscribe here to get it delivered to your inbox every other week!
- Retail: Global retail sales are expected to dip by 5.7% this year due to the coronavirus pandemic. Online purchases of clothing, however, are up 76.7%, with online revenue up 22.2% – but average order value down 54.5%.
- Homemade goods. The market for handcrafted items like masks and home furnishings has exploded during the pandemic, with sales spiking 146% on Etsy’s marketplace as a result.
- Grocery. Online grocery has seen continued growth throughout the pandemic, with online grocery sales for delivery and pickup increasing 9% from May to June.
- Travel. Due to COVID-19, U.S. digital travel sales are expected to drop 44.7% in 2020 after staying mostly stagnant in previous years. Most sectors of the travel industry won’t recover from the pandemic until at least 2022, with most consumers planning to either not vacation at all or to stay in their country or local area.
- Automotive. Previous challenges faced by the automotive industry have been exacerbated by coronavirus, with China experiencing a more than 80% drop in sales for light vehicles due to the pandemic.
- Technology. Demand for communications equipment and cloud infrastructure is forecasted to continue growing, although many factories are experiencing serious challenges with resuming production.
Mobile ad spend rising despite pandemic
While total overall U.S. ad spending is down due to COVID-19, mobile ad spend will increase by 4.8% to reach $91.52B in 2020.
According to new data from eMarketer, while mobile is one of the few ad formats expected to churn out growth this year, the growth is much smaller than it was projected to be before coronavirus. Prior to the pandemic, mobile was projected to grow to $105.34B in 2020.
Without mobile’s projected growth, U.S. digital ad spend would shrink this year. Digital ad spend isn’t projected to reach pre-pandemic levels until at least 2024.
Overall U.S. ad spend (not just digital) is now expected to drop $16.40B this year instead of growing $20B as was expected pre-pandemic.
Amazon + COVID-19
Prior to COVID-19, Amazon was estimated to net $81.2 billion in revenue in Q2 2020. Because of the pandemic, Amazon allocated $4 billion in additional spend to keep customers and employees safe and increase deliveries after prioritizing only essential items.
The ecommerce giant’s Q2 2020 numbers actually ended up totaling $88.9 billion, marking 40% year-over-year growth. YOY growth was especially impressive for grocery sales, which tripled YOY after Amazon increased its grocery capacity by 160% amid the pandemic.
In the UK, 35% of all online purchases during the lockdown period were made via Amazon, with one-fifth of survey respondents saying they now have a higher intent to purchase from Amazon post-pandemic. Free delivery, availability, and price were the top three key online purchase drivers for this group of consumers.
Walmart, Target, & More to Shut Doors on Thanksgiving Due to COVID-19
Major brick-and-mortar retailers including Walmart, Target, and Best Buy are shutting their doors for Thanksgiving in light of the COVID-19 pandemic.
The holiday closings come as retailers work to avoid overcrowding their stores and allow all of their employees to have a day off. Retailers have not yet announced their store opening plans for the other Cyber 5 days but we can expect more announcements in the future.
Walmart was the first major retailer to announce it close on Thanksgiving. In a news release, Walmart stated that stores would be closed as a show of appreciation to Walmart associates, who have been deemed essential workers in the COVID-19 pandemic.
This will be the first time since the late 1980s that Walmart stores will be closed on Thanksgiving. The retailer shared that Black Friday store hours will be shared at a later date.
Six days after Walmart’s announcement, Target released a preview of its adjusted holiday plans, which include starting to roll out the biggest deals of the year in October to avoid large crowds of shoppers – an earlier start to holiday shopping than ever before.
Target’s plan also includes expanding same-day grocery delivery to accommodate for increased holiday demand.
Many retailers will focus their efforts on curbside pickup this holiday season, with curbside pickup orders at retail stores surging 208% amid the coronavirus pandemic.
UK spending and banking habits shifting
According to the Toluna and Harris Interactive COVID-19 Barometer survey, 40% of consumers in the United Kingdom plan to reduce spend related to entertainment as lockdown restricitons ease. That is in contrast to only 14% of consumers who said they would be increasing their spend over the next 1-2 months.
What does all this mean? Basically, consumers are being cautious with their discretionary spending, even as restrictions are slowly being reduced in the UK. This shift in consumer mindset will have a trickle-down effect on ecommerce as well, especially in areas like the United States that are still being hard hit by the pandemic. Consumers are still incredibly hesitant about the stability of the economy, and rightly so.
With so much uncertainty on the future, a possible second wave, and a widespread vaccine still months away (at least), it’s no surprise that many people are hunkering down and safeguarding their income. How will this affect Q4 seasonality and holiday shopping?
Only time will tell.
COVID-19 Pushes Prime Day to October
Before COVID-19 took hold, it was assumed that Amazon Prime Day would occur on July 12th. Then, it got postponed to August. Then September.
According to reports from CNBC, Geekwire, and BusinessInsider, Amazon Prime Day 2020 has now been rescheduled to October in the wake of the ongoing coronavirus pandemic. Although no official date has been announced, it’s looking like the week of October 5th is the tentative new timeline.
And now it’s been pushed back again to give time for the marketplace giant to get all its shipping and fulfillment ducks in a row, including the hiring of more than 175,000 new workers.
Due to COVID-19, merchandising, fulfillment, and shipping have been major concerns of brands large and small for the past several months. Although the situation has improved in recent weeks as many countries have seen a decrease in COVID-19 cases and shipping lag times have finally caught up with demand, a second wave in the U.S. will most likely lead to more challenges for those advertising on Amazon.
Walmart, Amazon, & Coronavirus
As part of its continued steps to compete with Amazon during the pandemic, Walmart has plans to launch Walmart+, a Prime-like service priced at $98/year. Perks will include same-day delivery and grocery delivery, something that sets Walmart apart from Amazon.
With the arrival of coronavirus in 2020, ecommerce has been expanding rapidly. U.S. online sales grew 76% in June, reaching $73.2 billion last month. As an essential business selling high-demand products like toilet paper, surface cleaners, and groceries during the pandemic, Walmart has continuously seen increases in spend both online and offline.
Walmart also just surpassed eBay in U.S. ecommerce sales to rank #2, second to Amazon. Amazon remains in the top spot by a wide margin – 38.7% compared to Walmart’s 5.3%. eBay sits at 4.7%.
As far as retail ecommerce sales growth, however, Walmart sits at #1 with 27.0% compared to Amazon’s #6 ranking at 17.2%.
Ecommerce Up 18%, Brick-and-Mortar Down 14%
An eMarketer survey released last week shows how the coronavirus pandemic has shifted the world of ecommerce in 2020. February forecasts projected U.S. retail to grow 2.8% in 2020, but new data shows that U.S. retail sales will decline 10.5% this year, including a 14% decrease in brick-and-mortar.
Ecommerce, on the flip side, is expected to see 18% growth in 2020, largely driven by BOPUS initiatives like curbside pickup that have seen unexpected growth due to the pandemic. Click-and-collect and curbside pickup are expected to persist and experience a long-term trajectory of ecommerce growth post-pandemic.
Increased uptake of online shopping from consumers who moved online while brick-and-mortar stores were closed is also a big part of what’s driving the increase. Many consumers have turned to online shopping for the first time, with 12.2% growth for new online shoppers 65 and older.
Post-COVID ad spend
Whereas many US agencies and ad marketers said in early May that they expected ad spend to resume or ramp up by July and that major impacts wouldn’t last through Q3. However, 43% of those respondents said in late May that they did expect major impacts to last through Q3.
Most respondents expect moderate to major impacts through the end of 2020, with one-third still expecting to see impacts into next year.
The journey to a new normal will be a slow one. eMarketer predicts that YOY ad spending increases won’t return to where we expected them to be pre-pandemic until 2021.
2020 Ecommerce Paid Search
COVID-19 has thrown the entire ecommerce landscape for a loop, with consumers’ buying behaviors seemingly changing overnight. While some trends have accelerated, others have declined unexpectedly, and the impact your brand is feeling depends largely on your industry.
The pandemic has made predicting what the future will hold even more challenging. How do you forecast a Q4 that is still facing a hurdle as unpredictable as COVID-19? The truth is, you probably can’t. What you can do is leverage the data in our 2020 Ecommerce Paid Search Report from $400 million dollars of ad spend from 400+ industry-leading brands, as well as strategic insights from top PPC experts to get a major leg up on your top competitors.
In this exclusive executive report, you’ll uncover:
- 15 secrets to fortify your multichannel marketing strategy across Amazon, Google, Facebook, and more.
- In-depth analysis of the emerging trends redefining advertising and how to leverage them.
- Underutilized new ad formats to enhance your audience targeting and customer acquisition.
We’re excited to share with you the data and insights that will help you grow your brand profitably in the new decade. Claim your copy today!
Amazon Prime Day Prep: Gearing Up for the Perfect Ecommerce Storm
Prime Day began in 2015 as a celebration of Amazon’s 20th birthday. It quickly grew from a $415M event to more than $7B in 2019. But with COVID-19, supply chain & inventory disruptions, economic unrest, the uncertainty of Prime Day official date(s), 2020 has created a perfect storm that even the most proactive brand executive couldn’t have predicted.
At the same time, Prime Day is a time when consumers are eager to buy, creating increased opportunity for brands to leverage their websites and other marketplaces to drive sales. This halo effect makes it critical to have a strategy that encompasses all of your marketing channels.
We’ve prepared a four-week webinar series to ensure your brand is completely prepared to weather the storm and vastly increase your overall revenue.
You’ll gain access to the following sessions:
- July 22, 11-11:30 AM: The New Normal for Prime Day in 2020
- July 29, 11-11:30 AM: Inventory Planning + Merchandising
- August 5, 11-11:30 AM: SEO + Retail Readiness
- August 12, 11 AM-12 PM: Digital Advertising Strategies + AMA
Before Covid, the amount of time that U.S. adults spend on social networks was expected to plateau in 2020 and 2021 after doing the same in 2018 and 2019.
However, during the coronavirus pandemic, up to 51% of U.S. adults have been using social media more.
This trend is not expected to continue post-pandemic. eMarketer predicts that this trend will begin to moderate as we approach the end of 2020 and routines return back to how they were pre-pandemic (at least as much as possible), then proceed to visibly decline into 2021.
Only 9% of U.S. adults expect to continue spending more time on social media post-pandemic (compared to 17% of adults worldwide).
How ecommerce stores can take advantage of increased social media traffic during COVID-19
Does your ecommerce store take advantage of social media posts on top of ads to get more sales? Sprout Social recently conducted an analysis of the best times to post on Facebook, Instagram, Twitter, and LinkedIn based on user activity and engagement. Here’s what they found:
- Pre-Covid: Wednesdays from 11am-2pm were the best time to post.
- Now Every day at 11am is a peak time to post compared to the rest of the day.
- Pre-Covid: Wednesdays at 11am and Fridays from 10am-11am were the best times to post.
- Now: Mondays, Tuesdays, & Fridays at 11am and Tuesdays at 2pm are the best times to post.
- Pre-Covid: Wednesdays and Fridays at 9am were the best times to post.
- Now: Fridays at 7-9am are the best time to post, with activity peaking at 9am.
- Pre-Covid: Wednesdays from 8-10am & at noon, Thursdays at 9am & from 1-2pm, and Fridays at 9am were the best times to post.
- Now: Wednesdays at 2pm, Thursdays from 9-10am, and Fridays from 11am-12pm are the best times to post.
Walmart tests store without cashiers
To both help speed up checkout times and prevent the spread of coronavirus by limiting human interaction, Walmart is testing a store without any cashiers or conveyer belts at checkout lines. If the experiment at the Fayetteville, Arkansas location is successful, Walmart may test the concept at additional locations.
In response to COVID-19, Walmart has already integrated a touch-free payment system where customers can add money to their Walmart shopping app and use their phone to pay.
COVID-19 has played a large role in accelerating pre-pandemic trends. Retailers and restaurants have been testing cashierless checkout for many years with order kiosks and self-checkout options. The concept of Walmart’s touch-free payment system is very similar to Apple Pay, which saw users increase from 67 million in 2016 to 441 million in 2019.
As ecommerce retailers continue to test new strategies and expand upon previous ones, the winners who see the most success will be the ones who test, test, test to figure out what works for their exact brand as opposed to trying to follow industry best practices.
Customer Acquisition to Retention: Now available on demand
To address the pressing concerns of growing brands, we partnered with BigCommerce, Searchspring, and Trustpilot for a virtual half-day event all about creating a seamless customer journey to become an industry-leading force.
In this video replay, you’ll access the following sessions:
- Multichannel Acquisition Insights: Google, Facebook, & Amazon (ROI Revolution)
- How to Convert Browsers Into Buyers (Searchspring)
- The Power of UGC: Build Your Brand Reputation and Increase Conversions (Trustpilot)
- Leveraging Headless Commerce to Level Up Your Site Experience (BigCommerce)
Want to dive even deeper into the current marketing landscape? Digital Commerce 360 is offering 30% off their 208-page analysis of the top 1,000 retailers and current ecommerce trends, as well as their database with more than 100 data points on each Top 1000 retailers. Download your report today and use promo code 1000ROI30 to get your discount!
COVID-19 ecommerce industry impacts
In a recent analysis of retail and online brands, Digital Commerce 360 found that brands that pulled back on marketing spend during COVID-19 are now seeing their online sales struggle. Brands that stayed on course with their spending have seen online sales steady out after an initial dip. Brands that aggressively pushed their spending are seeing unprecedented growth.
While looking at industry trends can be helpful in informing your strategy, it’s also important to look at how channels are performing within different categories. Wholesale and retail channels in general are underperforming during this time in any industry. During this time, retailers who were able to double down on their direct-to-consumer initiatives instead of leaning more on brick-and-mortar stores and wholesale have seen online sales growth.
Focusing on ecommerce and D2C in a way that allows for a mix of both retail and online sales is how most brands are finding success during the time of COVID-19.
These growths and declines have been happening while consumer discretionary spending has dropped over 50%. With consumers spending less on transportation, travel, restaurants, and childcare in light of coronavirus, and strong discounts and ad placements being placed near essential items being sold online, non-essential ecommerce has continued to fare well despite this dip.
COVID-19 ecommerce industry impacts
As COVID-19 continues on, ecommerce impacts continue to fluctuate depending on the industry. Around the end of March, the top five categories for YOY page view growth were:
1. Business & industrial
2. Toys & games
3. Food, beverage, & tobacco
4. Office supplies
5. Health & beauty
By the end of April, however, these top categories saw a significant change:
1. Toys & games
2. Arts & entertainment
3. Sporting goods
4. Animals & pet supplies
5. Business & industrial
Looking at YOY order count growth can provide an additional helpful perspective, and similar to the data above, these industries also changed from March to April. Around the end of March, the top five categories for YOY order count growth were:
1. Food, beverage, & tobacco
2. Sporting goods
3. Business & industrial
5. Health & beauty
At April’s end, these top five categories became:
2. Sporting goods
3. Vehicles & parts
4. Business & industrial
5. Arts & entertainment
The coronavirus pandemic has been filled with fluctuations and general unpredictability, and the impact COVID-19 has had on different industries is no exception. We’ll continue to keep you updated here with the latest COVID-19 and ecommerce news. You can also dive more into the research done by Bazaarvoice on COVID-19 industry impacts here.
Racial inequality and COVID-19
On top of racially charged police brutality, Black people in the U.S. have also faced higher rates of mortality and joblessness related to COVID-19. For every 100,000 people, 55 Black Americans have died from coronavirus compared to 25 Latinx Americans, 24 Asian Americans, and 23 White Americans.
In other words, the coronavirus mortality rates of Black Americans are more than twice as high as other races. In fact, in Chicago, Black Americans have made up 68% of coronavirus deaths, while the city’s Black population is only around 30%.
Centuries of discrimination and inequality in America play a major role in this and have led to fewer available resources for Black people – resources that have been much more easily accessible to White people, especially resources related to financial security and health. This lack of resources has contributed to Black people making up a disproportionate share of low-wage essential workers who have had to keep working during the pandemic, despite risks to their health. This helps to explain the disproportionate amount of deaths, and also the inherent racism built into the United States’ socioeconomic system.
Further, the median White worker makes 28% more than the median Black worker. This racial wealth divide has exceedingly grown over the past several decades. The median White family has 41 times more wealth than the median Black family.
You can visit inequality.org to learn more about racial economic inequality.
Black-owned small businesses in the wake of coronavirus
Black-owned small businesses have faced a disproportionately negative impact from coronavirus. The number of working Black business owners has fallen by 40% compared to the 22% drop across all demographics. Additionally, the Center for Responsible Lending estimates that 95% of Black-owned businesses had a slim chance of receiving a loan in the first round of the Paycheck Protection Program, which was created to help small business owners during the pandemic.
Black people have faced excessive difficulty starting and maintaining a small business in the first place. According to the 2018 Small Business Credit Survey, large banks approve around 60% of loans sought by White small business owners and just 29% of loans sought by Black small business owners.
You can visit McKinsey’s report on how COVID-19 has impacted minority-owned businesses here to learn more. You can also visit supportblackowned.com to locate and donate to Black-owned small businesses near you.
COVID-19 and ecommerce long-term impacts
In light of coronavirus, nearly one-quarter of shoppers are looking for contactless payments or delivery options, with 36% of shoppers saying they won’t return to brick-and-mortar stores until a vaccine is available, according to a recent survey of 3,558 consumers from Salesforce Research.
The amount of consumers who are shopping online has been steadily increasing throughout the pandemic, with 44% of respondents conducting more of their shopping online in mid-May – an increase from 42% two weeks earlier. Even after COVID-19 effects subside, 68% of U.S. shoppers expect to continue buying essential goods online. This is especially true for Gen Z and Millennials, 73% of whom fall into this category compared to 69% of Gen X and 57% of Baby Boomers.
Online shopping is slightly more prevalent among high income households during the COVID-19 pandemic, with 71% saying they see more online shopping in their future and 65% of lower income households saying the same. Coronavirus is also expected to impact back-to-school and holiday shopping, with consumers across all income brackets saying they expect to spend less during these seasonal times than in 2019.
Uncommon Goods sells face masks, donates 100% of profits for COVID-19
Online marketplace Uncommon Goods is donating 100% of the profits of its rainbow face coverings to NYC Health + Hospitals.
These washable masks were all made in New York and designed by children ranging in age from one to 11 years old. The masks come in sets of two, each with a label that has a big, positive message like “lift others up” and “keep smiling.”
There are three designs to choose from and the full $25 will go to NYC Health + Hospitals, an organization that provides essential inpatient, outpatient, and home-based services across New York City for trauma care, mental health services, primary care, long-term care, and more.
The masks can be found on the Uncommon Goods website here.
Amazon’s coronavirus testing efforts
The same team who developed the Amazon Kindle e-reader, Echo smart speaker, and Fire TV stick is in the initial stages of building a robust COVID-19 testing network. Amazon’s plan is to build out robust internal testing labs to test its workforce for coronavirus.
The multi-state medical testing network would aim to fly samples from Amazon warehouses around the U.S. to a central hub in Hebron, Kentucky, where Amazon’s main air freight hub is located. There are currently job listings for microbiologists, medical researchers, legal roles, and design engineers to assist with the development of this project.
This development comes as part of Amazon’s $4 billion commitment to dealing with the effects of coronavirus. Funds will also be allocated toward providing personal protective equipment (PPE) for Amazon warehouse workers, cleaning of facilities, and increases in hourly wages. The ecommerce giant’s robotics group is also working to make face shields for frontline workers, roving bots that emit disinfecting UV light, and sorting machines that cut down on human contact.
Optimizing your paid and organic channels during COVID-19
Paid and organic search are the digital duopoly for audience acquisition that can transform your brand into an industry-leading force. To help you make the most of your paid and organic efforts, we partnered with the experts at Digital Commerce 360 to show you strategic insights to optimize and strengthen both channels in a webinar last week. A replay of that webinar is available now! You’ll learn:
- Underutilized PPC customer acquisition strategies to increase revenue at a profitable return.
- The hidden levers to SEO domination and the metrics to effectively track and monitor your performance.
- Client success stories from brands just like yours showcasing the tremendous impact of a paid + organic advertising strategy.
- Expert insights from Don Davis, Editor at Large for Digital Commerce 360, on the state of paid and organic search and how the Digital Commerce 360 Top 1000 is adapting.
It’s time to take your SEO and PPC efforts to the next level. Watch the video today!
Walmart’s ecommerce during coronavirus
Largely due to online grocery orders, Walmart’s ecommerce sales increased by 74% last quarter – revealing an area where Walmart has ample room to compete with Amazon. After seeing around 25% year-over-year sales growth for U.S. ecommerce in 2018 and just over 40% in 2019, Walmart has seen 74% YOY growth so far in 2020.
Walmart CEO Doug McMillon says that Walmart has seen four times as many new customers trying their pickup or delivery services, many of whom are becoming repeat customers.
Even with Whole Foods under its belt, it’s hard for Amazon to compete with the 3,200 Walmart locations that offer in-store pickup compared to the 150 Whole Foods.
Walmart is also fighting Target for the ecommerce spotlight, with both companies’ online sales surging during Q1 2020 as a result of coronavirus. Comparable sales surged 10% for Walmart from February to April 2020 and 10.8% for Target. While Walmart’s 74% ecommerce growth is impressive, Target’s ecommerce has surged 141% during the COVID-19 period.
Impact of COVID-19 on SMBs
According to a recent survey by global payments network Veem, 81% of U.S. small businesses expect to feel long-term impacts from COVID-19, with 87% preparing for economic slowdown.
More than one-third of the small- to mid-sized businesses surveyed say they’re pivoting their supply chains during this time, with around 25% investing in new technology or aligning their IT systems in some way in response to the COVID-19 pandemic.
A key pain point for SMBs has been liquidity. 52% are cutting operational costs, with 54% freezing hiring.
The three SMB industries most impacted by coronavirus are personal service, hospitality, and retail. SMBs in the telecommunications, professional services, and life science industries are feeling the least negative impact from COVID-19. Other heavily impacted SMB industries include education, financial services, and retail.
COVID-19 industry updates: automotive, apparel, & gaming
The automotive industry has seen a 42% increase in online revenue since March, compared to 9% this time last year. In paid search, the average cost per click of a digital automotive ad has dropped 31% year-over-year. Looking at the beginning of May versus the beginning of March, conversion rates on ecommerce automotive websites have increased 11.1%. In the last week of April, automotive ecommerce revenue went up 61%.
The apparel industry has struggled throughout the pandemic as consumers choose to spend their discretionary income in sectors deemed “essential.” Apparel sales are continuing to decline, with U.S. retail sales dropping almost twice as much in April compared to March. Some areas in retail are performing better than others, with U.K. luxury apparel brand Browns seeing a 70% increase in loungewear sales during the COVID-19 period. The fashion industry as a whole is expected to face a 27-30% drop in global revenue as a result of coronavirus.
While the casino industry faces devastating numbers, at-home gaming and puzzling retailers thrive. As one of the leaders in the casino industry, Caesars is experiencing a daily cash burn of $9.3 million. Despite furloughing 90% of their North American employees, Caesars will soon begin a phased reopening of some of its properties. Contrasting in-person gaming, board games and puzzles spiked 240% and building set sales are up by 59%. While puzzle retailers are benefiting from their huge increases in sales, many of their manufacturers are only working at 40% capacity, making meeting that demand very difficult.
Paid search post-COVID-19
No matter your industry, if you work with Google Ads and Microsoft Ads, you’ve likely noticed COVID-19’s impact on ecommerce search interests, buyer habits, and overall performance.
In the initial weeks of the unprecedented stay-at-home mandates, marketers felt like they were on shaky ground. The closings of brick-and-mortar stores presented an opportunity for digital commerce, but the rising unemployment rate created uncertainty in whether or not commercial and consumer product sales would come to a screeching halt.
After a couple of weeks, it became clear that consumers were depending more on ecommerce than ever before for essential and non-essential items alike (everything from face masks and gloves to puzzles and children’s swing sets).
How will your paid search performance be affected once daily consumer life has returned to a level of normalcy? To help you answer that question, we’ve compiled a short list of tips for making the most of the inevitable shift in competitive landscapes, buying behavior, and consumers’ renewed confidence in brick-and-mortar after the peak of lifestyle disruptions caused by coronavirus. Dive deeper here!
Amazon debuts digital storefront for fashion designers
In partnership with Vogue and the Council of Fashion Designers of America, Amazon is launching a digital storefront where shoppers can purchase luxury goods from independent designers.
Common Threads: Vogue x Amazon Fashion is aimed at providing relief to high-end designers who have suffered greatly from the cancellation of fashion weeks globally. The partnership also benefits Amazon greatly. Many high-end designers have avoided Amazon for fear of being associated with inferior or ordinary products, so this pandemic is pushing them into agreements that they may not have considered under normal circumstances.
Amazon is also showing their generosity by donating $500,000 to the Common Threads grant program, which raised over $4 million in their first round of fundraising. This program was developed to help support designers, retailers, and garment manufacturers during this period of plummeting demand.
While some consumers may be excited about the easy access to luxury goods, others may be skeptical about purchasing high-ticket items on the ecommerce website.
Google Business COVID-19 updates
At the beginning of April, Google My Business created an option for businesses to post updates specific to COVID-19. Businesses should be aware that these updates may replace standard Google Posts, which could impact local SEO strategy.
If you use a lot of Google Posts as a part of your local SEO strategy, consider deleting the COVID-19 posts or updating them to include the same information as your standard posts.
In March, Google stopped displaying new business reviews in Google My Business. Early this week, new reviews started showing up. This included backfilling old reviews during that suspended period as well as new reviews since the suspension was lifted. These reviews will be important to check because they may comment on how businesses are functioning during this crisis, for better or for worse.
Amazon works to catch up
On Sunday (5/10), Amazon lifted restrictions that limited the amount of inventory suppliers could send to Amazon warehouses. They also have addressed long delivery times for nonessential products. Some delivery times that stretched weeks have been shortened back to days.
With quick delivery a central part of Amazon’s competitive advantage, fixing these times is essential for customer retention. Amazon received 800,000 negative reviews in April – double the amount last April. Despite Amazon’s rapid hiring, demand has been a challenge to keep up with.
During the worst weeks of April, many shoppers turned to competitors Walmart and Target for curbside pickup, a more immediate option than what Amazon could offer. While it is unlikely that these shoppers will turn away from Amazon permanently, the expedited change in habit may lead them to spread their spending across these huge retail options in the future.
Walmart and Target have been working tirelessly to challenge Amazon’s online presence and may benefit in the long run by converting loyal Amazon shoppers into repeat customers for themselves.
Social media advertising in Q2
As businesses are pushed to cut budgets, marketing has taken major hits. Advertisers pulling back spending have pushed social media ad prices to fall as much as 50%, while engagement has reached all-time highs.
For tips on taking advantage of this increased engagement, see our latest blog post, Facebook Advertising Strategies During COVID-19.
Some companies in technology, telecom, and CPG industries continued to spend on social media and benefited from the lower prices. While each industry will likely see different patterns in the coming months, CPMs are predicted to remain low throughout Q2 and into Q3.
The overall economic health of the U.S. will play a role in dictating CPM levels, while industry-specific CPM levels will likely depend on the elasticity of the industry and how well the industry aligns with consumer needs post-pandemic. Marketers simply can’t prepare for all the possible outcomes of the coming months. What they can do is make decisions that set them up to be agile and ready to move quickly and efficiently in an unpredictable market.
B2B sales challenges
With COVID-19 decreasing overall economic activity, many businesses are experiencing budget cuts. This can often lead to the end of partnerships with B2B companies, and can certainly reduce opportunities available to B2B sales teams.
When asked what their biggest struggles are during this time, B2B teams’ top answer was customers postponing purchasing decisions. This puts salespeople in a limbo that is a struggle to fight against. Unless sales people can prove their services will help a business weather this storm better or recover more quickly, they will find it hard to close sales.
This leads right into salespeople’s biggest fears about the future of business development: the lack of budget available to buyers. This is closely followed by losing more deals due to the pandemic.
Based on all of this data, most (about 2/3 of) sales teams have low confidence that they will hit their sales targets this year. While B2C businesses will hopefully start recovering in the coming months, B2B recovery will likely take longer to bounce back. Businesses will likely wait till they are more financially stable before opening budgets back up for B2B partnerships.
Google’s update on consumer interests
Google is launching a new Rising Retail Categories tool on Think With Google. It will surface fast-growing product categories in Google Search, the geographical locations they’re growing in, and the queries associated with them. The data will be updated daily.
Considering the fast-changing digital landscape brought on by the coronavirus, these daily updates will be a huge boost for businesses trying to stay informed.
These insights can be used to better inform content creation, promotions, or even product ideas. This month’s surging categories feature sewing machines and baking materials. So, a craft company may consider promoting sewing machines on their homepage or a home goods store may discount cooking supplies.
If businesses create content that appeals to these searches, it may also be an asset to their ranking on SERPs, which can have an effect lasting longer than promotion itself.
Prime Day deals deadline extended
Amazon has finally announced that they will be accepting Amazon Prime Deals until June 5th. Prior to this announcement, the deadline remained May 8, despite the postponement of the shopping holiday itself.
This will come as a big relief to sellers and vendors, as predicting inventory and profitability months in advance is highly complicated during the COVID-19 crisis. Additionally, since Amazon has yet to announce a finalized date, it’s possible the event will be moved again.
While this is great news for vendors and sellers, Amazon has suspended other Amazon deals until further notice. This means that deals that Amazon has already approved will still run, but no new deals will be accepted.
Many sellers had planned deals to coincide with upcoming holidays such as Mother’s Day, but those deals were rejected by Amazon. Many retailers are pivoting to offer heavy discounts on their .com sites to compensate for the absence of promotions on Amazon.
Amazon has offered no clear reason why they’ve stopped accepting new deals or an end date for this limitation.
Facebook introduces Messenger Rooms
Pairing with our update from Google on Tuesday, Facebook has also released an app to rival Zoom. Messenger Rooms is very similar to Zoom, but differentiates itself by focusing on personal meetings rather than professional.
Currently, rooms can be created for free within Messenger or Facebook, but they will soon be available in Instagram, WhatsApp, and Portal, as well. Rooms accessible to a user will also be visible on their News Feed, Groups tab, or Events menu.
With Facebook Messenger already being used by 44% of adults to talk to friends and family, Messenger Rooms has a good foothold to compete with Zoom.
Facebook will also be incorporating augmented reality (AR) features from Messenger into their new app. Users will be able to use filters on themselves while in the rooms and will soon be able to use immersive 360-degree backgrounds from iconic locations. As of now, Messenger Rooms won’t feature ads.
Updates from Google
Google Meet free to all users
Over the next few weeks, Google will be releasing their video meeting tool, Meet, to all users for free.
With COVID-19 spawning the surge of video conferencing tools, Google is hoping this change will help them better compete with their direct competitor, Zoom.
While Zoom and Meet both have screen-sharing capabilities, real-time captions, and a tiled layout, there are some differences between the two platforms. The biggest difference is that Meet users must have a Google account to participate in meetings. While this does add more friction, it won’t be a big barrier for most people. Google stands by this requirement because it allows for a safer platform by running in the browser.
It also addresses one of the biggest issues Zoom has been facing: Zoombombing. Meetings all over the world, from AA groups to government gatherings, have been impacted.
Currently, the only limit to Meet is that meetings can’t have more than 100 participants. After September, however, free accounts will be limited to 60-minute meetings.
With daily participants surpassing 100 million last week, Meet is likely to see a huge surge in the coming weeks.
The return of free shopping listings
While not completely related to the coronavirus crisis, Google has announced the return of free product listings to the Google Shopping tab.
With many brick-and-mortar stores closing, ecommerce strategy has inflated importance during this period. The opportunity for free, organic listings could be a huge asset to some retailers.
This change is a part of Google’s long-term vision and was simply expedited by the crisis. The Google Shopping tab will now house paid ads at the top and bottom of the page, with free organic listings in the middle (similar to the main search results tab).
Google My Business impressions plummet
A study of over 80,000 listings found that impressions for Google My Business were down by 59% across all verticals. This indicates that no industry was spared from the impact of COVID-19 on their business listings.
While views have been decreasing week-over-week since late February, April has shown the views flattening out and hopefully starting to show growth again.
With impressions taking a hit, it is no surprise that clicks are also suffering. Total clicks are down by 37%, but clicks to visit a website or call a business were not as drastic (31% and 21%, respectively). Despite poor performance in most other categories, clicks to call restaurants have received a huge spike as consumers check to see if they are open for pick-up or to place orders.
Fashion, luxury, and “new essentials” amid the coronavirus crisis
While fashion brands originally took a hit due to delivery delays and decreased discretionary purchases, the industry is starting to show signs of recovery. Transactions were up 23% last week and global sales are up 63% since the onset of the crisis. Luxury goods have also recovered slightly. Despite a 19% decrease in online traffic, U.S. sales have increased by 45%.
While this could be inflated by Mothers’ Day (celebrated in the U.S. on the second Sunday of May), global luxury sales are also up by 21%.
The pandemic has defined a new category of goods called “new essentials.” New essentials are products that help consumers feel more comfortable under stay-at-home orders. This includes office supplies, fitness equipment, cosmetics, housewares, home improvement, toys, and hobby-related products.
These goods account for almost 40% of all consumer spending right now. 30% of the total 40% is beauty and cosmetics. Both fitness equipment and toys/hobbies account for 29% of the new essentials spending.
As the world begins to revert back to old habits in the next few months, spending in this category is likely to decrease, but not completely disappear. We should soon see non-essential goods start to lift again, as well.
Amazon Vine suspended
On April 24, Amazon announced that Amazon Vine would be suspended until further notice. Amazon Vine is a program that invites top reviewers to post opinions on new or pre-release products. Reviewers are ranked and chosen based on various factors including recency, volume, and helpfulness of past reviews.
This news will affect vendors the most, rather than sellers, because they aren’t allowed to directly contact customers to ask for reviews. Without the help of external review solicitation programs, it can be difficult for vendors to increase product reviews. This can hurt their ranking on Amazon’s algorithm in addition to decreasing conversion rates.
One of our Amazon experts offered up four strategies for vendors to get reviews in lieu of Amazon Vine:
1. Send a launch email to customers lists.
2. Include package inserts reminding customers to review your product.
3. Use affiliate marketing to increase traffic to your new Amazon product pages.
4. Leverage Google and Facebook ads to send customers to your Amazon page.
Ecommerce orders continue to surge
Ecommerce order volume has increased by 50% compared to 2019. This surge, combined with disrupted supply chains, has led to an increase in shipping delays, as well.
Retailers are taking, on average, 1.5 days longer to fulfill orders. Supply chain disruptions are a result of factories being shut down, transportation methods being limited, and social distancing regulations slowing efficiency.
Larger products, such as furniture, have even larger delays. The fulfillment times for these orders have more than doubled in the past six weeks from 32 to 68 hours. These products are taking longer to fulfill because they are less often stored in inventory. While smaller products may only experience delays when being delivered to the customer, larger products may face delays from suppliers and during manufacturing processes.
Businesses that previously held large amounts of buffer inventory or diversified their manufacturing will be better positioned to succeed during this time and will hopefully recover faster in the upcoming months.
Shopify offers free tool
Last week, Shopify announced the global launch of Shopify Email, a new marketing tool to make email marketing easier and more accessible for businesses new to digital marketing. In light of COVID-19, Shopify is offering this tool at no charge until October 1, 2020.
With stay-at-home orders causing spikes in screen time, merchants who typically rely on offline avenues can take advantage of increased digital traffic by using email marketing to connect with their shoppers. With premade templates that can pull branded images, products, descriptions, and more directly from a merchant’s store to create branded emails, Shopify Email makes communicating with shoppers more efficient and convenient – especially for marketing teams with already-strapped bandwidth.
These emails are perfect for communicating special promotions, changes in operations, or any other COVID-19 updates you want your customers to know about. Shopify Email also has the capability to track the results from each email in an analytics dashboard.
Increase in contactless payments
Another result of stay-at-home orders is a huge surge in demand for digital payment services. Italy, for example, has experienced an 81% increase in ecommerce transactions since the end of February. While these surges have been a challenge for payment platforms, many companies have contingency plans for high-demand events such as Black Friday or Prime Day, which have been vital to their success in handling huge payment volume.
Despite the success of payment processing companies so far, there are signs of the internet reaching capacity during this crisis. Netflix, YouTube, and Facebook have all agreed to reduce video streaming quality in Europe to avoid broadband congestion.
As we’ve seen with other shopping habits, the pandemic has triggered a change in behavior ahead of its time. Groups who may have been hesitant to convert to online payments before COVID-19 now use it as their primary option. Time will tell if this will be a lasting change in behavior.
Facebook’s coronavirus efforts
Facebook is partnering with researchers at Carnegie Mellon University to build an interactive map that shows the symptoms people are experiencing most around the United States, county by county.
Data will be collected based on Facebook users’ self-reported symptoms to help identify “hot spots” where more supplies are needed and predict possible resurgence of the virus.
The data is built into an aggregate report that doesn’t include individual responses, and the individual responses won’t go to Facebook either.
On April 20, the survey was expanded internationally in an effort to get more accurate data on how many people have had the virus in each country. This is on top of an effort by Facebook to take down posts that get classified as harmful misinformation.
SEO coronavirus checklist
During the current coronavirus pandemic, the ecommerce landscape is changing rapidly. Consumer priorities have shifted in recent weeks in response to COVID-19, and this means that ecommerce brands need to react quickly and nimbly in order to maximize organic traffic and revenue.
At this moment in time, SEO is in a unique and opportune space because COVID-19 is forcing consumers to shift their buying habits to online. While we don’t know if these changes will be temporary or long-term, we do know the immediate and lasting impact will be that more customers will move online for a greater percentage of purchases.
We’ve compiled a checklist of tips for SEO in the time of coronavirus. By continuing to invest in SEO efforts during this time, you are choosing to remain visible in the search results. This will pay dividends now, and tenfold when search demand returns to normal and we are no longer adapting SEO to coronavirus times. Find it here.
Amazon reopens shipping for nonessential items
Amazon has announced that they’re reopening their shipping services for nonessential items. At the start of the outbreak, Amazon shut down this service to third-party sellers to prioritize products that would assist in the containment of the disease the most.
With sellers making up 58% of Amazon’s sales, this announcement will offer a huge boost to the company. Each seller will still have limits on how much they can ship to ensure essential goods still have rooms in the warehouses.
Amazon is able to make this change partially due to the mass amount of workers they’ve hired for their distribution centers and delivery network. In the past month, they’ve hired over 100,000 people, and are looking to fill an additional 75,000 roles. These jobs are a great opportunity when so many other companies have had to furlough employees. These jobs will be temporary work, similar to hiring during the holiday period, and will likely not be sustained after the crisis subsides.
Consumer behavior changes
The New York Times has released two articles this month on consumer behavior during the pandemic, featuring informative, timely, and easy-to-read graphics for their readers. The first is on how consumers are searching and the second is on how consumers are spending. Here are some takeaways on how COVID-19 has affected internet behavior.
Activity on websites specializing in entertainment (Facebook, Netflix, and YouTube) is up. Their apps, however, are stagnant or decreasing. This points to an overall trend of mobile traffic lacking the boost that desktop traffic has received. With people spending the majority of their time at home, they are picking their laptops and desktops over the cell phones.
News and media sites have seen an uptick in readers as the search for updates on the virus continues. The media organizations who have seen the largest inflation are CNBC, The New York Times, and The Washington Post. Partisan sites, which have been popular in recent years, haven’t experienced the same popularity as the non-partisan sites. It seems that the search for unbiased facts has overcome the need for opinionated takes.
Zoom has become a worldwide phenomenon. Other services that have helped businesses transition to the home include Google Classroom, Microsoft Teams, VPN Super Unlimited Proxy, and Hangouts Meet by Google.
Another surprising habit change comes in the dumping of sports for gaming. Twitch.tv is up almost 20% while ESPN has dropped a whopping 40%. With no new events to draw in viewers, ESPN is suffering.
With internet gaming so popular this quarter, it’s no surprise that Americans have increased their spending in that category, as well. Other increases in spending can be found for online grocers, food delivery, meal kits, alcohol, home improvement, and general merchandise and ecommerce.
Spend is, unsurprisingly, down in many travel-related categories, including cruises, airlines, and lodging. Other notable categories that have suffered include apparel, toys, arts and crafts, sporting goods, and book retailers.
Stay-at-home orders impact grocers
An industry that has seen huge increases in spending is grocery. As an essential good, this spike is expected. With stay-at-home and shelter-in-place orders being announced more frequently, here’s how consumers are affected:
- An essential retail store with less than 10,000 square feet must have less than 25% of its occupancy inside at one time.
- An essential retail store that is 10,000 square feet or larger must have less than 10% of its occupancy inside at one time.
- Lines will form outside of the stores, with people waiting approximately 6 feet apart.
- Some grocers expect or even require shoppers to wear masks and gloves before entering.
Coronavirus exposes gaps in Amazon’s regulation of their marketplace
The problem of counterfeit goods isn’t a new issue for Amazon, but the need to regulate and remove these goods is more important than ever. Hundreds and thousands of hand sanitizers, face masks, and other cleaning products have popped up on the sight claiming to prevent coronavirus.
More than one million products with similar suspicious or misleading claims were removed from the site in February alone.
One step Amazon took to discourage sellers from profiting off of the pandemic is banning sellers from bidding on keywords like “coronavirus” or “covid-19”. While this was a good first step, sellers have easily worked around it by putting the false claims in images next to the products.
This avoids Amazon’s algorithm from sweeping the product description and identifying the false claim.
A problem that goes hand-in-hand with false claims is sellers increasing their prices on cleaning products to gain from consumer panic. Amazon has suspended over 3,900 sellers for violating the Amazon Marketplace Fair Pricing Policy rejects offers that harm consumer trust, which these cases certainly fall into.
It seems that Amazon is fighting battles on all fronts. The gaps in the regulation of their marketplace have been exposed, their inventory is volatile, and they have order surges so high that they are looking to hire 100,000 people. To make matters more difficult, they must tackle these challenges while ensuring that they don’t contribute to the spread of the virus. This period should prove to be Amazon’s most challenging yet.
Upcoming virtual event: Driving Ecommerce Growth in the Wake of COVID-19
Staying up-to-date on this pandemic and its effects on ecommerce is a great first step in weathering the storm. But once the dust settles, businesses will need to hit the ground running if they want to recover from the impacts of COVID-19. ROI Revolution is hosting a free half-day virtual event to help you discover how to overcome the hurdles you’re facing in the ever-changing online landscape.
Driving Ecommerce Growth in the Wake of the COVID-19 Pandemic will lead you in unifying your digital strategies to stabilize and grow your brand online. Virtual sessions led by our experts will include Embracing (or Salvaging) Your Amazon Efforts, Maximizing AI-Powered Campaign Technology, Enhancing Attribution Models to Make Every Dollar Count, and AMA With Experts in Digital Strategy.
Join us on April 30 from 10-1 to join your peers in being proactive, not reactive.
Amazon Prime Day postponed
With uncertainty in the air and Amazon operations strained, Reuters announced that Amazon will no longer be hosting its annual sales event in mid-July. The event is expected to occur sometime in August, but with future projections of COVID-19 variable, it could be even later.
While this delay may, in the end, help Amazon and 3P sellers by waiting to capitalize on the huge sales day until the economy lifts, it will put a big strain on inventory and revenue. The decision will leave Amazon with 5 million extra electronic devices and they are surely not alone in having inventory already prepared for the big day.
With small business sellers reaching more than $2 billion in sales last year, this loss in revenue will only exasperate the tough times that have taken over these businesses. This announcement was inevitable, but hopefully the summer will bring clarity and Amazon Prime Day 2020 will be bigger than ever.
While the share of bad news seems to overwhelm the good these days, the pandemic has also brought about many inspirational stories of brands and businesses contributing to aid efforts selflessly. In an article published on April 8, 2020, we share some of those stories. Here’s an excerpt:
“Crocs is donating 10,000 free pairs of shoes a day to healthcare workers. While any shoes would help healthcare workers, crocs are especially helpful because of their easily cleanable rubber material. JanSport, a heritage backpack brand, is also giving away their specialized products. Their initiative plans to donate 10,000 packs of food to the World Central Kitchen to compensate for students who lost their free meals with school closures.
With a lot of businesses closing their physical offices, one firm in Atlanta is doing something rather creative with their stock of supplies. By founding the Toilet Paper Exchange, the marketing firm has found a way to donate their stock of toilet paper to those in need and has offered to help other organizations with the distribution of their excess.”
For a recap of how COVID-19 progressed through Q1, please visit our infographic where we outline the impacts of coronavirus on global communities and ecommerce.
COVID-19 webinar replays
Over the past few weeks, we’ve hosted two virtual events to help you navigate these uncertain times.
In our Paid Search Trends in the Coronavirus Climate webinar, we analyzed past trends & data and offered strategic advice to help guide your brand through this challenging period. You’ll uncover how to stay agile with your advertising budget and what long-term paid search strategies you can implement to overcome short-term market pitfalls. Watch it here.
Next, we hosted COVID-19, Ecommerce, and Your Brand, a live, interactive roundtable discussion answering the top questions on the minds of brands and marketers. In this replay you’ll uncover strategies to combat supply chain disruptions, low-risk campaigns to maintain and gain market share, and the live answers to viewer’s questions. Watch it here.
Small business assistance
Support from Google
In an attempt to alleviate financial pressure on small and medium-sized businesses (SMBs), Google is giving away $350 million in ad credits. These credits will be given to SMBs that have been active since January 2019. The credits can be used until the end of 2020.
Google hopes this will help provide stability to SMBs in a time when their local communities may not be able to make use of their products or services. Eligible SMBs will see a credit notification appear in their Google Ads account in the coming months.
Support from the government
As part of the $2 trillion coronavirus stimulus package, the U.S. has reserved a much-needed $370 billion for small businesses loans. The loans, backed by the Small Business Association, can be used to pay for basic expenses. Additionally, owners would not have to repay portions that were spent on paying employees, a mortgage, rent or utilities.
For more information or to apply for a loan, access the site here.
Adobe releases 2020 Digital Economy Index
Adobe’s 2020 Digital Economy Index analyzes trillions of online transactions across 100 million products in 18 categories. Here are some of the top insights Adobe uncovered:
- Digital purchasing power has increased by 20%.
- Computers and monitors have seen a 40% increase in average daily sales comparing March 1-10 to March 11-25.
- Fitness equipment has seen a 55% increase comparing those same periods.
- From January 1-March 11, non-perishables have increased by 87%.
- During that same period, virus protection products (gloves, masks, hand sanitizer, etc.) have increased by 807% and over-the-counter cold/flu drugs have increased by 217%.
“The Dow is now up 20% from its coronavirus sell-off low reached on Monday.” – CNBC
Conversion optimization during COVID-19
Is consumer behavior in the current crisis an indicator of things to come? Short answer: Yes.
By utilizing specific statistical methods, testing micro-conversions like add-to-cart events or PDP views, and iterating on and expanding winning tests, you can test faster than your competitors and stay ahead of the curve.
Whether your industry is being affected positively or negatively by the crisis, it is more important than ever to be correctly managing your on-site testing program.
Our latest blog article on keeping up your digital marketing in this crisis covers how to win new customers and retain existing ones over the coming weeks and months by utilizing on-site testing to optimize your messaging and site experience. Our website optimization service lead, Brandon Howell, guides you through the best tips and strategies for conversion optimization in this crisis.
Travel industry updates
The travel industry is seeing some of the biggest hits from COVID-19 as fears and restrictions around travel grow. While some of the statistics are shocking, experts believe once the crisis subsides, the travel industry will recover – starting with local tourism.
- Global airlines stand to face a $113 billion hit if the coronavirus continues to spread.
- Hotel occupancy dropped by over 24% year-over-year for the week of March 8-14, with revenue per available room down more than 32%.
- Carnival Cruise Line’s stock is down nearly 60%, with Royal Caribbean and Norwegian down over 70% in the past 30 days.
- The canals of Venice have become clear for the first time in centuries. Perhaps in the future cruises will decrease and this may be maintained.
- Pollution around the world has dropped dramatically: According to NASA, nitrogen dioxide levels across eastern and central China have been 10 to 30 percent lower than normal. Since Italy went into lockdown, nitrogen dioxide levels in Milan and other parts of northern Italy have fallen by about 40 percent.
- While the US is behind both these countries in terms of stay-at-home orders, we are already starting to see the effects of those orders in places such as Los Angeles, Seattle, and Atlanta. The maps on this site compare the pollution levels between March 2019 and March 2020.
Source: European Space Agency
Fulfillment by Amazon (FBA) provides warehousing and shipment services for third-party sellers. FBA, in addition to Amazon’s larger vendor shipment services, will be suspended through April 5th to allow Amazon to prioritize “household staples, medical supplies, and other high-demand products.”
- Amazon is prioritizing products associated with childcare, health and household, personal care, grocery, scientific supplies, and pet care.
- The program is predicted to end on April 5th, but as the pandemic progresses, the limitations may continue.
- Sellers continue to have the option to sell their goods and fulfill the shipments themselves.
The demand for faster downloading speed is higher than ever. With a 75% increase in bandwidth demand from March 8 to 15, the rollout of 5G is being expedited.
- VPN usage is up by 34% and video bandwidth usage is up 12%.
- Last week web traffic was up 22% and voice usage was up 25%.
- 5G can also better support the development and running of apps that take and monitor temperatures.
Due to the impact of COVID-19, television and streaming services are also seeing a massive surge in consumption.
- 21% of consumers who have signed up for a streaming service say coronavirus helped drive their decision.
- Television viewing could jump by 60% as a result of more viewers staying at home.
- Netflix and YouTube are throttling streaming quality in light of increased demand.
Advice from Google
In this time of constant change and uncertainty, it is essential to keep your business information up to date. Whether you’re reducing hours to help your staff or closing down completely, make it clear to your customers. In addition to updating your website, you should also update your Google My Business profile, which many consumers solely rely on when searching via Google or Google Maps.
Whether your hours or business operations are changing or not, you should make some sort of notice on your site so your customers know they are receiving up-to-date and relevant information from your business.
Here are some actions you should consider taking:
- Update your business hours on your website and on your Google Business Profile.
- Clarify what extra precautions your business is taking to ensure the health and safety of your employees, customers, and community.
- Share if you are providing any new or extra services to the community.
- If you are experiencing delays, be transparent about what kind of expectations your customers should have.
- Add a new tab or bold header to your home page where consumers can easily find all information related to COVID-19 and your business.
When COVID-19 first started showing its effect on the United States, it primarily affected brick-and-mortar businesses. In the states that have issued shutdowns of nonessential operations, we are now seeing equitable shutdowns of ecommerce operations. The ecommerce sites shutting down for the foreseeable future include fashion brands Reformation, Marysia and The Frankie Shop, and retailers TJ Maxx, Marshalls, Victoria’s Secret, and HomeGoods.
Retailers experiencing a shopping surge
On the other side of these closures stand grocers, big-box stores, and electronic stores that are seeing huge boosts. Walmart has responded to this increased consumer need by raising entry-level wages for workers by $2. Walmart hopes this will help them manage the shopping surge and more properly reward their workers for the hard work they’re doing. Walmart’s rivals, Amazon and Target, have also increased pay and hiring to help manage their own respective surge in orders.
Despite the rise in sales to stores like Best Buy, Target, and Walmart, retail is suffering. Retail associations are pleading with the Trump administration for relief. They specifically are asking policymakers to lend a helping hand to the retail workforce and provide liquidity to retailers throughout the crisis.
Corona pushing industries and regions to ecommerce
The auto industry has been highly dependent on the in-person sales experience up until this crisis. In an attempt to combat the immense drop in car sales that China saw, dealerships are testing out ecommerce capabilities. Select dealerships are making the following changes to adapt to social distancing needs:
- Introducing one-on-one appointments in-person
- Leveraging their large showrooms to allow for social distancing
- Adding new services to their online sites
- Allowing test-drives at the home or office
- Offering at-home vehicle delivery
As with many of the changes in shopping the coronavirus is bringing, we may see these offerings stick around even after the crisis is over.
Upcoming virtual events
In times of strife, business must adapt and think to the future to survive. In an effort to help you maneuver in this uncertain period, we are tackling the toughest questions in two live, interactive discussions.
The first webcast, The State of Paid Search in the Coronavirus Climate, wrapped up at 2pm on March 25th, but you can still register to watch the replay! The video will analyze past trends in paid search and offer strategic advice to help your brand navigate this challenging period. It will be focusing on staying agile with your advertising budgets and what strategies you can embrace to overcome short-term market pitfalls.
The second webinar, COVID-19, Ecommerce, and Your Brand, will take place on April 1st at 2pm and is the best place to get all your questions regarding COVID-19 and your business answered LIVE. In addition to answering your questions, we will cover supply chain disruptions, revenue-boosting campaigns, and how to thrive once this crisis subsides.
Register for both events here.
Instances of innovation
Every week reveals more drastic and unprecedented impacts resulting from COVID-19. While not all of these impacts have a silver lining, we have seen many companies react to setbacks with fantastic, innovative solutions. Here are some of the top cases.
One real estate developer, Evergrande Real Estate Group, retrained their offline sales force to use virtual reality and social media to engage customers. This has allowed them to provide a positive boost to the economy in its time of need and also allows customers to continue to make decisions and payments to benefit their future. These strategies may benefit them beyond this crisis allowing them to better serve their customers.
Another example is the grocery industry in general. Grocery delivery services have shown record sales growth as a result of social distancing efforts. Customers who may never have shifted to mobile grocery shopping, including senior citizens, have abandoned strict habits and converted with ease.
Again, this change of habits may never have occurred without the need for isolation, but after the crisis, the habits may remain.
Strain on events
As traveling fears grow and countries like Italy extend travel restrictions, marketing events across the globe are feeling the impact.
Many major in-person events are being postponed, canceled, or virtualized after the Centers for Disease Control and Prevention recommended that all businesses cancel non-essential company travel.
This recommendation is being taken seriously. Facebook canceled F8, its largest event of the year, which was to take place in May. Google transitioned its Cloud Next 2020 conference to be held online, and Adobe did the same with their annual Adobe Summit conference. Additional canceled conferences include Mobile World Congress, South by Southwest, Shoptalk, Shopify Unite, and Google I/O, among many more.
At the beginning of 2020, 41% of marketers said they would be increasing their event budgets this year. On top of that, 53% of marketers consider in-person events and tradeshows the best way to drive engagements and conversions.
From an events perspective, coronavirus has the potential to have a lasting negative impact on budgets, revenue, and sales for the rest of the year.
In fact, according to eMarketer, the total loss from canceled events will surpass $500 million.
That being said, all is not lost. If you have in-person events coming up this year, prepare now for the possibility that they’ll turn into virtual events. Create additional copy to reflect that the event is virtual, alert your attendees immediately of any changes, and make sure you have all of the tools necessary to conduct a virtual event.
Be proactive, not reactive, in how you pivot to a digital event.
Additionally, being forced to cancel events provides an opportunity for marketers to analyze just how effective events are for their business. Do virtual events actually perform better than in-person events? Are in-person events worth the heavy time and money investments they require, or do they outperform virtual events for your specific business?
Be sure to measure everything so that you can accurately analyze the true impact of events on your brand and make informed decisions moving forward.
Influx in online shopping
As more consumers continue avoiding crowded public places, they’ll increasingly turn to online shopping to get their essentials. In fact, JD.com, China’s largest online retailer, has seen sales of common household staples quadruple over the same time period last year.
With the growth of ecommerce, coronavirus shouldn’t disrupt the economy as much as the SARS outbreak did in 2002. However, it will still bring strain to online-based businesses who need to deal with potentially delayed deliveries or out-of-stock items because of increased demand.
On Amazon, it is extremely important to not let any of your products run out of stock in order to avoid being punished by Amazon’s organic search and advertising algorithms. If your product is out of stock for over 30 days, it will be treated as if it has no sales history once it comes back in stock.
In other words, your product’s ranking for its most important key words drops significantly and will thus show up much lower in search results.
Fears over having products go out of stock may be part of what fueled some third-party sellers to price gouge on Amazon when the virus first started taking hold in the U.S.
Some of the biggest culprits included a pack of two 12-ounce Purell hand sanitizer bottles being sold for over $100 and Clorox wipes being sold for 8x their typical cost. The items have since been completely removed and a company spokesperson told ABC News that there is “no place for price gouging on Amazon.”
Overall, prices on Amazon spiked at least 50% for most surgical masks and hand sanitizers when coronavirus arrived in the U.S.
In addition to price gougers, counterfeiters have also been taking advantage of consumers’ coronavirus fears, selling products that claim to cure the virus or that don’t meet safety standards.
For example, latex-free gloves that claimed to “prevent coronavirus, flu, and pneumonia” as well as plastic face masks that claimed to “isolate saliva-carrying viruses” had to be removed. Over the last week of February alone, Amazon removed over one million items for violating such policies.
If your brand sells items related to hygiene and sickness, you’ve already seen an influx in sales. Compared to this time period last year, U.S. sales of hand sanitizer are up 54%, with thermometer sales up 34% and aerosol disinfectant sales up 19%.
Focus on keeping your products in stock and be up front with customers if there are going to be any delays.
Delivery and supply chain concerns
With the proliferation of online shopping and delivery demand comes inevitable delays. Consumers who are working from home, on sick leave, or trying to avoid contact with others are ordering more products to be delivered to their house. A shopper who tried to purchase items from Amazon on March 5 received a message warning that increased demand was leading to shorter supply and longer delivery times.
This comes at a time when consumers value fast delivery times more than ever before, with Amazon Prime promising free two-hour delivery for some products. Other major suppliers like Walmart and Target are competing for similar options.
Can your brand handle this higher demand?
As we mentioned in a January Amazon update, Amazon recently made some heavy investments in one-day shipping that aren’t paying off quite yet. In Q3 2019, its net income fell by 26% and shipping costs rose by 46%. Stay tuned to our blog for future updates on how the coronavirus pandemic impacts Amazon’s profits throughout the first half of 2020.
Another factor impacting Amazon is that many Amazon merchants rely on Chinese suppliers. Some sellers spent 6% less this year compared to last year on advertising throughout the middle two weeks of February. Ecommerce supply chains will be strained by COVID-19 as well as factory closures in China.
These factory closures will also impact mass merchants like Target and Walmart, who will almost certainly experience supply chain disruption, a drop in casual shopping, and an increase in purchases of essential toiletries, groceries, and health items.
Additionally, some food delivery companies, such as Postmates and DoorDash, are testing or rolling out contactless delivery options. With 32% of consumers reducing their frequency of eating at restaurants because of coronavirus fears, such apps are seeing an influx in traffic.
Your brand may have never considered advertising on this type of app, but now may be the time to do it!
What’s a brand to do?
Determining how to proceed with events and keeping items in stock are only two items on the marketer’s to-do list as the coronavirus outbreak continues.
What other steps does your ecommerce brand need to take to thrive despite the COVID-19 disruption?
While overall ad spend is down, TV ad spend could see an uptick. With more consumers staying home to work and keeping coronavirus coverage up on their television, switching more of your ad budget to video platforms like television and even YouTube could be a good idea.
As we know, transparency is one of the most important characteristics that today’s consumers look for in a brand. When it comes to coronavirus, proactively addressing customer frustrations and fears (e.g. delivery delays, out-of-stock products, the cleanliness of your warehouse), will support your brand’s reputation and encourage customer loyalty.
Tell consumers about the coronavirus protections you’re putting in place. On top of that, consider providing your agents with additional training on handling any inquiries with appropriate sensitivity.
Additionally, make sure that your display advertising game is up to par. App downloads (especially of news apps) may increase as people spend an increasing amount of time at home. In addition to the delivery apps previously mentioned, app downloads in general have surged as a result of coronavirus. In China, app downloads over the first two weeks of February were 40% higher than the average for all of 2019.
As the coronavirus pandemic continues, pin this blog post to keep an eye out for updates on how the virus will impact your brand and ecommerce in general. We’ll keep updating it as more news comes in.
In the meantime, check out our other content related to coronavirus below:
For additional COVID-19 resources, see below:
- 4 Paid Search Strategies for the Aftermath of COVID-19
- [Video Replay] Looking Beyond the Pandemic: How to Thrive – Not Just Survive – in a New Ecommerce World
- Facebook Advertising Strategies During COVID-19
- How Coronavirus Is Impacting Ecommerce
- COVID-19 and Ecommerce: Amazon, Paid Search & Social, and Industry Impacts
- COVID-19 Supply Chain Disruption: Amazon and Beyond
- Amazon Vine Suspended in Response to COVID-19 & Supply Chain Disruptions
- April 2020 Industry Updates: Amazon’s Coronavirus Journey & Mobile’s Decline
- SEO Checklist for COVID-19
- Ecommerce Brands Helping During COVID-19
- [Infographic] COVID-19 in Q1: The Impacts of Coronavirus on Ecommerce
- Conversion Optimization During COVID-19
- [Video Replay] Paid Search Trends in the Coronavirus Climate
- [Video Replay] COVID-19, Ecommerce, and Your Brand