Life as we know it looks a bit different these days. Even as lockdown begins to ease and shops and leisure spaces open back up, restrictions and social distancing mean that we’re not going to go back to normal for quite some time to come. For business owners and marketers, there is a brand new landscape to deal with as consumer habits have shifted so massively over the course of the last three months. How you market to those customers has to change too.
Figures from the Office of National Statistics illustrate this shift; after 15 years of growth, the UK’s high streets fell quiet in March when lockdown began towards the end of the month, resulting in a 5.2% decline in sales. In April, high street sales were down 18.1% and 15% of stores made no sales at all. It was a similar story in the USA, where social distancing measures saw retail sales fall 8.3% in March and a record 16.4% in April.
Quite simply people have stopped (at least for the moment) shopping in store where possible. They are ordering in rather than dining out and accessing streaming services and social media for entertainment rather than heading to the cinema or a bar. When you read that UK GDP fell by 5.8% in March and 20.4% in April as a result of those closures, or hear that the US officially entered a recession in February, it’s all too easy to worry what’s next.
For many businesses, a knee-jerk reaction to this onslaught of data has been to cut costs wherever possible in order to survive. Long term survival however depends on customers. It’s determined by how many people return to your brand, buy your products and book your services.
For that, digital reactivation is vital.
It’s also imperative that it happens quickly – before you even turn your lights back on – in order to bounce back and give your business the best possible chance of survival in the new commercial and retail landscape that’s emerging post-pandemic.
We know that making decisions and plotting a marketing course can feel fraught with roadblocks right now and the last thing you want to do is make the wrong call. The reality is that there is no other way than digital to take the first steps on the road to recovery. Your digital channels are more important than ever in life after the pandemic and there is an enormous wealth of data which definitively proves just how invaluable digital is right now, to every business, regardless of size or sector.
Here, we’ve pulled together the very latest facts, figures, trends and survey results to make the case for immediate digital reactivation for you. Whether to convince yourself or a higher up, here’s why digital is vital to surviving and thriving in the new normal.
Consumers are spending more time online than ever
While physical interaction has ground to a halt with retail, leisure and dining venues closed and social distancing enforced, digital has thrived. Adults are spending 29% more time online right now than they did before lockdown according to a survey carried out by Opinium, with an average of 41 hours a week spent on the web. This time is spent shopping, planning future trips, catching up on social media, streaming content, working and video calling.
This increase in digital consumption can only be good news for those brands which commit to expanding their digital presence and get the ball rolling again on social media, content marketing and other digital activities in record quick time.
With more time online comes more opportunities for you to educate, inform, connect with and deepen relationships with your consumers. They have additional hours which can be spent watching your videos, reading your blog posts and engaging with you on social media. In sheer numbers, you have almost a third more time than you did before COVID-19 to win over Internet users, to make them aware of your business and to give them reasons to spend money with you.
E-commerce is thriving
It should come as no surprise to learn that e-commerce is thriving given all this extra time online– but the extent of that growth and the volume of sales is staggering. Make no mistake, consumers have fully embraced shopping online out of necessity and they are buying in tremendous amounts.
If you don’t have an e-commerce presence, there has never been a more critical time to take your business online. You can find a step-by-step guide to doing just that here.
To illustrate exactly why you need to prioritise and market your online sales offering consider this; Primark, one of the biggest retail brands in Europe recorded zero sales in April because it was forced to close its store doors. It doesn’t have an ecommerce store so couldn’t sell a thing. In comparison, the Spanish fast-fashion chain Zara also had to close its doors across Europe but it says its online sales grew by an incredible 95% in April.
If you leave your digital channels dark, you’re putting yourself in Primark’s shoes. Make your presence felt online and you could emulate Zara instead and benefit from the enormous appetite for online shopping abounding as we transition from lockdown.
The outlook for online spending is much rosier than high street sales
The latest eMarketer forecast for US retail sales predicts a 10.5% drop for the balance of 2020, with sales not expected to return to 2019 levels until 2022. It says, “Brick-and-mortar retail sales will fall 14.0% to $4.184 trillion in 2020. It will take up to five years for offline sales to return to pre-pandemic levels.”
However, at the same time, e-commerce is set to grow substantially, with an expected 18% leap this year.
Closer to home in the UK, online sales reached a 12-year high in May during the worst of the pandemic, with an “astonishing” 32.7% year-on-year increase, according to figures from IMRG.
Andrew Lipsman, eMarketer principle analyst said, “Everything we’re seeing with e-commerce is unprecedented, with growth rates expected to surpass anything we’ve seen since the Great Recession.”
Overall, US online retailers have seen an average 126% increase in revenue from digital channels in the last three months, in the Nordic countries that figure increases to 166% and in the wider EU, there has been an average 115% rise.
What’s more, this trend looks to be here to stay, making sustained digital activity all the more business critical.
China, which went into lockdown and subsequently emerged from restrictions sooner than anywhere else in the world is already seeing online sales being sustained. In an article for the World Economic Forum, JD.com managers Vivien Yang and Ella Kidron write, “In the first four months of this year, China’s total retail sales of consumer goods amounted to RMB10.68 trillion ($1.5 trillion), a decrease of 16.2% compared with the same period last year, while sales of online retail reached RMB2.56 trillion ($360 billion), an increase of 8.6%.
“This shift from offline to online is significant and has continued after the lockdown, leading customer’s online shopping habits to leapfrog at least one or two years.”
These figures show us that soaring revenues from online sources aren’t a fad and are happening worldwide. Consumers are spending their money online and will continue to do so at least for the balance of the year.
If you aren’t investing in digital advertising and digital marketing, you simply aren’t putting your business in the running for any of that spend.
Click-and-collect and in-store pick-up has surged – with sales originating online
If you have a physical location, reactivating your digital channels is even more important as new patterns of consumer behaviour emerging during lockdown suggest that digital is a key driver of in-store visits.
Crucially, a significant proportion of in-store visits are being driven by online purchases, meaning you absolutely need to be highly visible digitally in order to get consumers into your place of business physically.
eMarketer principal analyst Andrew Lipsman says we have witnessed a cataclysmic shift in the popularity of click-and-collect (buy online and collect in store). It is now at a level of maturity that wasn’t expected until 2024. He says, “Certain e-commerce behaviours like online grocery shopping and click-and-collect have permanently catapulted three or four years into the future in just three or four months.”
Investing in your digital presence means you can potentially tap into this new way of shopping and give your business every chance to convert those looking for the peace of mind and convenience that comes from being able to pay online and then quickly collect in store into customers.
Promoting the fact that you can facilitate click-and-collect also shows that you understand how and why consumers have adapted their behaviour and shopping habits – an understanding which could deepen brand loyalty at this critical juncture.
Simply speaking, click-and-collect is emerging as a new sales channel and it’s helping to power real world business growth. Get the digital infrastructure in place to meet that demand and you’re likely to see the impact on your bottom line.
Lipsman says, “Big-box retailers are leveraging their click-and-collect models to accelerate their e-commerce businesses. This will push Walmart into the No. 2 position for the first time. Along with Target, Best Buy, The Home Depot and Costco Wholesale, Walmart is expected to grow e-commerce sales more than 35% in 2020.”
Social commerce is taking off – and it’s free to set up a shop
Although it’s been around for a while, social commerce has failed to truly set the world alight so you could be forgiven for overlooking this route to sales in the past. As with so many things, the pandemic has flipped that status quo a full 180°. Social commerce is now thriving.
According to the Digital Marketing Institute, if you’re looking to win over younger consumers, social media platforms are the place to do it. What’s more, they’re also a source of sales. It says, “Gen Z spends three times as much time shopping on social media platforms compared to the average online consumer. The vast majority of this online shopping is done on visual platforms like Instagram and Snapchat… Research indicates that 42% of people aged 18-34 claimed to use social commerce regularly.”
The good news if you’re new to social commerce and wary of loosening the purse strings too much on something untested? You don’t need to spend a penny of your budget to activate this digital sales channel.
Just a few weeks ago, Facebook launched Shops as a way to help small businesses hit hardest by the pandemic to begin selling online. If you have a Facebook business page, you can set up a Facebook Shop quickly and at no cost. Viewable from both Facebook and Instagram, your Shop acts as an instant digital storefront, with social media users able to browse your products, ask you questions and buy from you, all without leaving the Facebook or Instagram app.
Find instructions on how to set up a Facebook Shop and start selling here.
Shoppers say they will favour online experiences for the foreseeable future
If you were in any doubt about the importance of reactivating your digital channels in as timely a manner as possible, consider this; around half of consumers say they won’t return to shopping in physical stores for a ‘long time’ or ‘some time’. Just 9% of consumers say they will begin to visit shops ‘immediately’ when they reopen.
It’s clear that digital experiences will be the preferred means of accessing goods and services for some time to come. Prioritizing the reactivation of digital channels now means you’ll be on the same page as your consumers, not scrambling to catch up as they stay online even as the world opens back up.
Consumers are actively searching for information online
We saw earlier that we’re all spending more time online than ever. Google cites Nielsen data which concludes that the coronavirus pandemic has led to ‘unprecedented levels’ of digital consumption, with an average increase of around 60%.
In its whitepaper, ‘Navigating your Retail Business through COVID-19’, the search engine says that 8 in 10 consumers are at home and they’re turning to Google to find what they need. It says, “With hundreds of millions of shopping searches on Google each day, it’s crucial that retailers are connected to the customers searching for their products.”
Shoppers are not only adjusting how they obtain products to prioritise digital means, they’re also searching for information by digital means too. Google says, “People are looking for clear, specific information about where, how, and when they can get what they need. In the week ending 28 March, searches for “curbside pickup” and “home delivery” have grown by 70% and over 100%.”
It also reports a 60% increase in searches for “what’s open near me”.
Consumers want to hear from brands digitally
While reactivating your digital channels is crucial to serve customers in this new climate and take a piece of the sales available, there’s another compelling reason to ramp your digital activity back up. Quite simply, consumers want to hear from you.
According to Google data, 76% of consumers say they want to hear from helpful brands during this time. Opinium research into brand communications during the crisis back this up, noting “a very large majority of people in the UK would like to hear either the same amount, or even more, from brands across categories ranging from healthcare to fashion and beauty to entertainment.”
This represents a clear opportunity to serve your client base. What’s more, you don’t have to feel that your updates should be coronavirus-related and potentially see you walking a tightrope to get your authenticity across, with Opinium finding that “…over a third of the UK would prefer for brands to talk about something other than the pandemic.”
History shows us digital is critical to survival
History shows us that in times of economic crisis, digital offers a lifeline for business survival. In the aftermath of the 2001 recession and the 2008 Great Recession, online sales grew and maintained that growth. In its research report ‘The Next Consumer Recession | Preparing Now’ Deloitte says that while many industries faltered and unemployment soared, e-commerce growth actually accelerated.
It notes, “The contribution of e-commerce to total retail growth actually accelerated during the Great Recession. Between the two twenty-first-century recessions, e-commerce contributed just over 10 percent of total retail growth. During the Great Recession, however, e-commerce continued to grow.
“But perhaps more interesting, the relative importance of e-commerce skyrocketed as it accounted for nearly all of retail growth during this period. Since the end of the Great Recession, e-commerce sales have averaged a 15 percent growth rate, and now e-commerce growth accounts for more than 20 percent of total retail sales growth, twice the pre-2008 recession level.”
It’s significant that in the last two recessions, digital flourished. Consider that the present generation has grown up with digital and the whole ecosystem is much more mature, with digital adoption ingrained in almost every industry, and it’s easy to see how fundamental digital channels could be now. Not only are we facing a recession, we’re also dealing with the shadow of social distancing looming over offline experiences – together this makes an even greater case for digital experiences and digital reactivation.
Adrac can help your business optimise its use of digital and e-commerce to thrive in the new normal. Contact us now to find out more.