An overview on the impact of COVID-19 on eCommerce Paid Media

Introduction

Retailers around the world will be experiencing varying challenges from COVID-19, whether that be across physical store closures, production, fulfilment etc. In addition to the broader business challenges, there has also been a substantial shift in online purchase behaviour as consumers adapt to changes to their daily routines.

We’ve seen a number of retailers shutting down online stores altogether, the likes of Net-a-Porter and Next, for example, all initially removed the ability to shop online. Despite these choices, however, demand is very much still there and in some sectors, we are seeing volumes greater than seasonal peaks such as Black Friday, and the way in which brands respond to the current climate may very well impact how they recover.

IMRG data suggests sectors such as health and beauty and home and garden are in particular projected to see large yearly growth, however, the likes of clothing and footwear are looking to have the most detrimental impact. 

Paid Search Data 

The data below consolidates primarily mid-market retailers across Google Search and Shopping who we work with. Overall search volume itself has remained pretty consistent since COVID-19 started to evolve, with growth seen in the build-up to lockdown being announced and people generally stockpiling. When we view the UK, EU and USA in isolation there was a clear trend of search volume increasing up to 16th March, which gradually began to decline, with the exception of last week that saw a relatively sharp increase in all territories. This will vary massively depending on the retailer and industry though and these insights are simply for broader analysis and monitoring consumer online behaviour. 

In addition to retailers pulling activity altogether, it looks like there has been the border decision to reduce media spend in general, we have seen this from our side with a large number of accounts benefiting from lower CPCs and generally less competition. In regards to budget, we would recommend this on a case by case basis. Overall eCommerce is still performing well and there is a good opportunity for brands to be pushing interesting content (please see opportunities below). 

In-line with improved CPCs and less competition we’ve seen a natural increase in CTR as well, which will be contributing to the improved number of sales below;

The biggest considerable change is the improvement to conversion rate. As you can see from the below there was a sharp rise from the end of February / beginning of March peaking noticeably in the week commencing 16th March, just prior to lockdown in the UK being announced. This trend was again seen across UK, EU and USA. However, the UK markets have seen an average drop of 31% in conversion since the peak, with EU down to a lesser extent of 13% and the USA markets actually improving slightly. Although numbers have dropped since peak trading weeks, we are still seeing higher than average order numbers. 

What are brands doing and what is the opportunity

In general, it is a pretty interesting time within the paid media space. As day-to-day consumers, we can see the massive shift from larger advertisers serving much more content around supporting communities and supporting the NHS. Whether promoting cooking together via video calls (Uncle Ben’s) or giving free data usage to NHS staff (EE), a number of brands are adding value where they can in our battle against COVID-19.  

Consumers generally now have more time on their hands and there is a clear consumer trend for people purchasing. Our clients PMT Online and Borough Kitchen sell musical instruments and cooking equipment respectively and both have seen considerable increases in sales. Google trends also show a clear increase in searches for terms including ‘learn to’ for example. It’s also a good opportunity for brands to be publishing buying guides and broader content which they would not normally be promoting. Our client The Sports Edit has really capitalised on the increasing trend of working out from home. They have since published and promoted guides on ‘at home killer core moves’, ‘improve mental health and dealing with isolation anxiety’, ’running for beginners’, ‘how to structure your work from home day’ and much much more. 

We also work with a pet food retailer and a key focus in the future for them will be how to engage with the increased number of new customers. With fulfilment issues across a range of industries - it is likely that brand loyalty has on occasion been pushed aside (for example supermarket shoppers, buying where delivery has been most readily available). If you are in this bracket, you want to ensure you have an effective CRM strategy in place. Whether that be promoting loyalty benefits, discounts or general USPs, it's a good opportunity to expand your returning customer base and CLV. For PMT Online, for example, you will want to be serving content relevant to the user’s purchase. A new customer buying a beginners guitar would likely benefit from ‘how to play the guitar’ guides and would likely be interested in supplementary equipment (amps, strings, picks etc). 

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If you have any questions on the above, please feel free to contact us.