The emergence of e-commerce since the onset of Covid-19 is no longer news. Even last summer, TechCrunch offered data that showed the pandemic had accelerated the shift to e-commerce by a full five years.
We won’t be so bold as to proclaim Covid as a thing of the past. But much of the country has emerged into something looking like ‘normal’ thanks to the vaccine rollout over the past several months. And with it as a sense of what Covid has changed for digital in general, but e-commerce specifically.
Let’s talk consumer spending first, to see where it was and where it is.
Last year, department store sales declined by over 60% for the full year. Meanwhile, e-commerce grew by nearly 20%. And groceries, alcohol and home improvement materials sales accelerated by 12%, 16% and 14%, respectively.
That was last year. Let’s look at the past five months in 2021 and the data that shows a trend in a “post-Covid” world —
No category has grown more than clothing, shoes and accessories, up 81%, followed by sporting goods/hobby/musical instrument and book stores at 55%. Retail hasn’t bounced back as hard, though — just a 23% rebound.
Amazon leapfrogged a number of players to firmly entrench itself as the number three digital ad platform behind Google and Facebook. Not a surprise that the number one e-commerce site on earth did well.
A surge in home buying has led to the growth of builder-based brands, and opportunities for home furnishing brands. Maybe it’s not the mass urban exodus of the 1950s, but Covid has pushed home buyers into more open spaces, and has pushed others into the purchase of second homes to retreat to. And the gasoline on that fire has undoubtedly been historically low interest rates. That has led to a surge in opportunities for brands that specialize in both home furnishing and home building/remodeling (but also a shortage in lumber).
Used car demand is at an all-time high as automakers have struggled with production thanks to a worldwide shortage of semiconductors. It has forced them to idle plants and made it difficult for dealers to keep their lots stocked. As a result, drivers are switching to used, and the average used car value has gone up 17 percent in the past year. (Hello, Carvana).
Let’s summarize this simply — stores were closed. People wanted to booze and order takeout. They wanted to hit the open road, and they wanted to fix that ugly ass garden they’d been avoiding for two years, but started staring at daily. And to meet those needs, they ordered stuff — even used cars — online. Boom.
And now let’s summarize where we’re headed, hopefully just as simply.
People are tired of being cooped up inside. They want to pick up the volleyball or the golf clubs, kickstart some new habits and buy some clothes and accessories that make them look good and feel good as they go back in public.
But, they’ve gotten comfortable with doing more of that shopping online than they otherwise would have. The timeline has been accelerated.
Emarketer says US digital ad spending is growing 25.5% this year. Total media spend will grow 18% and even traditional TV will bounce back by 5% — but digital is still outpacing it by 5X. Marketers are going where consumers are spending. And as we showed before, that is online.
TV and OOH will bounce back after sharp declines last year but, and I don’t mean to sound dramatic, but...they’ll never be back to where they were. Connected TV is pushing out linear TV. I do expect OOH to fare better than most ‘traditional’ media as we go forward.
But for as good as this is on paper for digital marketers, it’s also creating a logjam on the top channels. Facebook and Google are expensive.
Somewhere in there is a causal relationship to what’s happening on Amazon. They’re seeing an unprecedented shift in ad spend from both post-pandemic consumer behavior, paired with the hit Facebook ads are taking with the iOS14 update in the last few months. As a result, Amazon is seeing the fastest growth in digital ad revenue this year among the big players.
But it’s not just digital or traditional. It’s about the evolution of both.
In fact, with businesses opening back up, vaccine rollouts, and mask mandates getting lifted, fewer people are spending all of their time on digital. This opens up the market for other marketing tactics, like OOH advertising, particularly as the interest in outdoor events surges.
So where does that leave you, the e-commerce brand? Glad you asked.
Double-down on the quality of your e-commerce offering: The demand for e-commerce brands or e-commerce transactions has never been greater. But it’s not enough to just offer things for sale online. You’ve got to meet customer needs and obsess over the quality of that experience. This blog from our archives should help.
Find the opportunities that others are missing: I’m spitballing here, but as people move to the ‘burbs, there are opportunities to push landscaping and home maintenance services online. Create home remodeling kits with checklists for all of the items you need to re-do a bathroom, for instance. In the used car market, do hyper-local ad campaigns and take your sales team into neighborhoods to transact without stepping foot into a dealership. And if you’re an advertiser, buy-up effective but discounted ad opportunities — if your customer is still there, then it’s basically just on sale.
Embrace Amazon with one eye open: No brand is excited to join Amazon and give up a chunk of their customer data. But your competitors are taking your market share on that channel if you’re sitting out. Consider ways to acquire new customers there, then figure out ways to get them to your site — or stores — for subsequent transactions.
Move quickly: Opportunities don’t wait, and they’re not always there for a long time either. But if you overanalyze and overthink, someone else will have beaten you to the punch. Know your customer. Know your product. And act with confidence.
Tips of your own? We’d love to hear them. Leave a comment.
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