Insights

COVID-19 and Ecommerce: What the Data Says Part II

Justin Lambert & Angus McLean with Abby Fuller

As the unprecedented COVID-19 situation continues to unfold, we’ve been tracking the performance of dozens of our merchant clients to assess the impacts on their businesses. As we continue to monitor the situation, and extract insights from the data, we are providing regular updates to see how engagement and purchasing behaviors are changing over time. We hope having access to this information can prove valuable in helping both B2B and B2C brands adapt their digital commerce strategies.

Still, the challenges we all face are many. If you have digital commerce issues you’d like to discuss, please do not hesitate to reach out to us at digitalcommerce@gorillagroup.com. We are committed to providing expert-led consultations to minimize impacts and potentially capitalize on nascent opportunities.

What impact is COVID-19 having now on ecommerce as a whole?

To start, we’ll quickly review how things have changed or stayed the same compared to the data we reported previously.

What We Know

Overall, we’re finding that ecommerce activity is normalizing in some ways, now that consumers are becoming more accustomed to our new shared reality. For example, whereas three weeks ago we were seeing a dramatic drop in traffic in some sectors combined with a surge in returning customers, we’re now seeing an uptick in new visitors and an accompanying increase in overall traffic (although not yet to the level we were seeing prior pre-virus).

Conversion rates remain elevated, although not as high as they were a few weeks ago. But, it’s encouraging to note that, overall, ecommerce revenue is still rolling along at the same level or slightly higher than before COVID-19 changed everything in many sectors.

What We Think

These results fall in line with our expectations: When a State of Emergency was initially announced and various levels of quarantine began filtering through North America, a period of “panic buying” set in. This manifested itself in the form of increased conversions from returning customers — the consumer’s need to quickly obtain what they felt was important, from trusted sources, as quickly as possible.

As the populace has become more attuned to the reality of quarantine orders across North America, that period of panic purchasing has subsided. Shoppers are taking a little more time making buying decisions and researching price and availability on various sites, as exemplified by the increase in new visitors and sessions.

Has anything changed in the impact on B2B vs B2C?

In our first article, we noted that B2B has always been less volatile than B2C, and that’s what we were seeing playing out during the coronavirus outbreak as well. However, some definite changes occurred as social distancing recommendations evolved into stay at home orders in most areas.

What We Know

Compared to what we were seeing three weeks ago, B2C revenues and conversions have increased while B2B revenues have flattened.

Likewise, we’re seeing some changes in which channels are proving most effective for generating revenue:

  • B2C is now seeing increased revenue from email and social media channels (whereas organic and paid search were the key channels a few weeks ago. As many companies are pulling back on digital ad spend to preserve cash, that may also play a factor in the paid search declines.)
  • B2B had been riding high on referral and search traffic, but now both those channels are trending down.
  • As an interesting side note, we are seeing an uptick in B2B ecommerce activity from mobile devices.

    What We Think

    This falls right in line with expectations, but it does offer a sobering consideration for B2B ecommerce organizations:

    As more and more businesses have been forced to close their doors to comply with stay at home orders, the online B2B activity has necessarily reflected the slowdown. Many businesses are being forced to undertake drastic cost-saving measures, even laying off or furloughing workers, because their revenue has dropped significantly. While a promised stimulus package has already been approved by the U.S. Congress, aid is taking a long time to reach businesses that desperately need it. So, it makes perfect sense that many of these businesses are no longer buying what they used to online, or at least not in the quantities they once did.

    On the other hand, with so many Americans and Canadians spending so much more time at home, online shopping for consumer items like loungewear, groceries, and household goods are on the increase. It saves a potentially dangerous trip to the store, and it’s incredibly easy. At this point, although millions of Americans are (at least temporarily) out of work, the combination of incoming stimulus checks and enhanced unemployment pay are keeping most consumers relatively confident about short-term spending, especially for household needs.

    As to the increase in B2B activity on mobile devices, it’s likely because most business buyers are currently working from home. So, they’re more likely to be making their purchases on a phone or tablet rather than the desktop they used at the office.

    What is the latest impact on different industries?

    We published a heat map in the last article, comparing various industries across a number of ecommerce metrics. Below is the same heat map, broken down into individual days over time.

    What We Know

    Some industries we listed in the last article continue to experience increased activity as expected:

    • Food & Beverage
    • Household
    • Health & Wellness

    A new addition to this list is Sporting Goods, especially firearms and ammunition.

    One industry that has fallen sharply over the last few weeks is Logistics & Supply Chain. It now sits below its long-term metric averages, along with Automotive and Apparel & Fashion.

    What We Think

    Again, these trends match the common sense reality of what the world is going through right now:

    As more and more businesses have been forced to shut down or dramatically curtail their activity, there’s been a huge drop in the need for supply chain activity that used to be the lifeblood of modern business. At the same time, with more of us stuck in our homes more than usual, we’ve increased our purchase of household goods, groceries, and other necessities for comfortably living at home, while deferring purchases of clothing and related product categories.

    New insights from Google Trends

    Now that enough time has passed, we’ve been able to pull some insights from global search trends surrounding the coronavirus outbreak and its impact on how consumers are seeking out information and making purchasing decisions.

    What We Know

    As the keyword chart above illustrates, some terms initially saw huge increases in search volume during the “panic buying” phase. Examples include “hand sanitizer” and “toilet paper”. As the initial panic subsided, those terms fell back into the average pool. Many other terms surrounding activities done at home — loungewear, recipes, food delivery — saw an initial dip, but have generally increased since people have settled into a “quarantine routine”.

    Digging deeper, we found some of these trends mirrored in search phrases incorporating “bulk” and “in stock” qualifiers as well.

    What We Think

    The results tell a simple story: Initially, people were reacting to a new, frightening situation most have never dealt with before. And, they handled it like they do when preparing for a major storm. After the initial panic, we’re finding online searching and buying trends following a predictable pattern. Those products and activities needed most when you’re stuck at home are rising to the top of search volume.

    Within the past several weeks, both consumers and business owners have been organically searching for “bulk” terms to ensure they are stocked up on the essentials, and “in stock” queries to find items that are still available. Below is a chart of the top trending terms related to “in stock” and “bulk” from March 1, 2020 to April 1, 2020.

    As “panic buying” has decreased, users are now searching for products to be used during their time at home. Increases in terms surrounding clothing, food and beverage, health and wellness and household products have increased, which aligns with the household “bulk” and “in stock” related trends above.

    “DIY” or “do it yourself” terms have also seen a spike in interest as consumers are looking to create DIY face masks and cleaning products, as well as fill their time with at-home crafts and home improvement projects.

    According to the most recent search trends, consumers are also looking for an at-home alternative to some of the regular services they used to receive outside the home, such as haircuts, hair coloring, manicures, and the like. Especially with the explosion in the use of video conferencing, it’s important for people to keep up their appearance during quarantine.

    These findings fall in line with data from Wal-Mart, recently published by CNN, about the trends they’ve seen at physical stores and on their website.

    Have the lessons for businesses changed in the last three weeks?

    In a nutshell, no.

    While the entire situation surrounding COVID-19 continues to evolve, and mass quarantining efforts are still affecting so many consumers and businesses, the ecommerce industry is weathering the storm impressively well. Some industries are being hit harder than others, and this is reflected in online sales as well. But, even when struggling, the potential ROI supports maintaining ecommerce activities as close to normal as possible, since that’s where the lion’s share of business is being done.

    For companies that already had well-established digital commerce channels, continued investment in optimization, fulfillment, and customer service remain the top priorities. For those companies that have had to scramble to establish or upgrade their ecommerce presence, the marketplace is now expanding as consumers are again searching for the best options available.

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    Methodology

    We pulled analytics data from 77 current North American clients to develop the statistics published in this article. To maintain appropriate confidentiality, we will not share the specific company names or URLs. We broke these sites down into groups by industry and whether their main ecommerce target was B2B or B2C. We pulled data for a period of 89 days, from January 13 to April 13 to isolate recent valid site data from before and after the point where COVID-19 began to impact North American businesses. We chose March 13 for that pivotal date, as it is the day a State of Emergency was officially declared in the United States.