Insights

COVID-19 and Ecommerce: What the Data Says

Justin Lambert & Angus McLean

You don’t need another article telling you that we’re in a strange, sometimes distressing situation right now. Economic uncertainty, market volatility, and the widespread closure of places of business are well known. Sadly, there’s also a lot of misinformation out there, which just adds to the doom and gloom narrative.

What you — actually, all of us — really need are facts and a level-headed interpretation of those facts based on experience.

So, we decided to bring our experience to bear on the current situation. With access to live and anonymized data from clients’ websites*, we’ve been able to glean some interesting insights into how the coronavirus epidemic, quarantines, and social distancing is impacting ecommerce.

How has COVID-19 impacted ecommerce as a whole?

Overall, as you would expect, we’re seeing the same basic volatility in the ecommerce sector that’s showing up elsewhere. What’s more exciting, though, is what we’re not seeing. We’re not seeing systematic ecommerce struggling as some had feared. Quite the opposite, actually.

What we know

In most of the standard metrics every website pays attention to — visitors, pageviews, time-on-site, etc. — we’ve seen wide deviations since March 13th. Some sites are way up, others have seen dramatic drops in traffic. You can see this in the chart below, which shows a marked increase in volatility across several metrics.

Plotting Ecommerce Signal Volatility over Time

Of course, as interesting as increased volatility is, the most important metrics for any ecommerce site are those related to revenue. And, that’s where things get even more interesting.

When we visualize the individual KPIs as averages across all the sites included, we see some markedly drop off while others rise after March 13.

Plotting Aggregated (Median) Signal Trends

This tells us that ecommerce businesses are experiencing reduced traffic but increased conversions. In fact, our data shows that ecommerce revenues have slightly increased or remained relatively stable, on average, despite all the turmoil. In many cases, these companies are making the same revenue from fewer visitors.

What we think

This is welcome news, both for well-established ecommerce sites and for businesses forced to rely more heavily on their websites than ever before because their physical locations have been closed, or have had their hours curtailed.

It seems to indicate that users visiting ecommerce sites are arriving with a stronger buying intent. They’re not as interested in kicking tires and researching a hundred options, they’ve come to make a purchase and move on.

For companies that already relied on their ecommerce efforts for all or most of their revenue, this means they have a good chance of weathering this difficult period. For companies that did little online business in the past, it’s possible to earn back a portion of the revenues being lost from the closure of physical locations by ramping up ecommerce efforts now.

How are B2B and B2C companies being affected by mass quarantines and social distancing?

Historically, B2C has always been a more volatile sector than B2B. It’s more heavily affected by changes in taste and fashion trends, as well as celebrity endorsements and other marketing tactics. The winds of change blow hard and fast in B2C, but less so in B2B. And, we’re seeing a similar trend among Gorilla clients at this point.

What we know

When we separate these 71 clients into B2B and B2C sectors, it becomes apparent that those selling directly to consumers are experiencing much larger swings in standard web metrics. B2B companies are still experiencing increased volatility, as noted previously, but not to the same extent.

Understanding Revenue Impact across Channels

The table above describes the percent change in revenue, separated out by the channels that supplied the traffic. Interestingly, we are seeing increased revenues from Direct, Email, and Referral channels in the B2B businesses while B2C is experiencing growth in search channels (Organic and Paid).

What we think

Obviously, you can’t change the core of your business to react to sudden changes like the impact of the COVID-19 virus, which was completely unknown just a few months ago. What this highlights, however, is the need for companies to prepare for unexpected events to the extent possible, especially those selling directly to consumers. And, to think creatively about how to service customers under unique conditions.

We’re actively helping our existing clients build out engagement tactics to react to the economic shifts that are occurring. As an example, we worked with one of our retailers that relied primarily on in-store customers to put the spotlight on their curbside pickup services. With a quick turnaround, they were able to salvage sales that would have otherwise been lost. If there are alternative ways you can continue to serve your customers despite the current circumstances, make sure they know about it by spotlighting it on your website and marketing mix.

Additionally, we’re seeing some more differences between commercial buyers and consumers in where they’re seeking goods to buy during these unprecedented times. Commercial buyers are falling back on established relationships (direct and email traffic) and on recommendations from colleagues and thought leaders (referral traffic). Consumers, on the other hand, are utilizing search to locate what they want to buy. Of course, whether a business is B2B or B2C, it’s always beneficial to leverage existing relationships wherever possible.

What industries are fairing the best under coronavirus restrictions?

It only stands to reason that certain industries will be hit hardest by the travel restrictions and social distancing measures that are being enforced across most of North America. Travel and Leisure has been hit very hard, as has automobile manufacturing.

But, as noted above, the commercial impact of the coronavirus isn’t turning out to be all negative on the ecommerce front. Let’s focus on the industries that are seeing positive results right now.

What we know

In the heat map below, the lighter the color, the higher the increase in each tracked metric.

Heatmap to Characterize Changes across Industries

As expected, a handful of these industries showed marked improvements, at least for the short term:

  • Medical
  • Health and Wellness
  • Household
  • Food and Beverages
  • Logistics and Supply Chain

This makes sense, considering the concerns on the minds of customers. This is right in line with the results of a recent McKinsey poll regarding U.S. consumer behavior.

What we think

Again, companies that already have an established ecommerce side to an otherwise offline business are likely to see a nice bump in online activity because so many people are unable to visit physical stores right now. Some are seeing a bigger increase than others because they sell items people prioritize during a time of crisis, especially medical supplies, food, and household goods like cleaning supplies.

Other industries and retailers that market less vital goods could see sales drop off depending on how long quarantines and travel restrictions last. But, for the time being, it appears that customers are maintaining an optimistic view and are still buying discretionary items for their families and their businesses.

What lessons should all businesses take away from the COVID-19 situation?

Here are a few lessons to take away from these insights:

  • Change is constant – While the coronavirus has pushed change to an extreme in some ways, the fact is that markets are constantly in flux. Businesses that are better prepared for the unexpected can weather these constant changes much more effectively than those that take a short-term view.
  • This data will change too – Likewise, this entire situation is changing on a daily basis. It’s vital to stay on top of your key metrics, gather feedback from employees and customers, keep your finger on the pulse of the industry, and on circumstances in your local community, as well. We’re also keeping a close eye on things and we’ll be updating these results accordingly. Stay tuned for updates.
  • Don’t exploit the situation – This is a difficult time for everyone, and it’s an opportunity for all of us to come together, help and support each other. While businesses may be able to make a few dollars in the short term by appealing to fear and perceived need, or by otherwise taking advantage of consumers by manipulating pricing. In the long term, though, that behavior can destroy trust in the business. Don’t sacrifice a hard won reputation for opportunistic short term gains.
  • Help people instead – This isn’t just about keeping yourself, business, friends, family, and neighbors safe and healthy during these difficult times. It can be a powerful marketing strategy as well. If you do sell products that can be ethically marketed to people or businesses concerned about COVID-19, you’ve probably noticed that your search ranking has been overrun with thousands of news stories and blog posts that may mention your product in passing. People have a lot of questions, and they’re desperate for information. So, provide it for them: consider creating and publishing helpful content that answers your customers’ questions right now. Include helpful links to product pages or category pages for products they’re likely to need, and you’re creating a win-win situation.

We’ll be revisiting the data on a regular basis, so please check back for updates. In the meantime, please wash your hands, practice social distancing, keep calm, and stay safe.

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Methodology

We pulled analytics data from 71 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 51 days, from February 1 to March 23 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.