Unprecedented events. Unexpected effects. Uncharted waters. A response guide for businesses leaders
Such is the context we’ve all been in for the last few weeks, juggling new real-life challenges.
Now… before jumping in deep to talk eCommerce, I want to stop for a second and acknowledge you and your concerns, fears and feelings: I feel you. We all do. Everyone is working hard to figure things out as they go and putting their energy and skills at best possible use to get a handle on this.
We will get through this.
The objective of the below is to help you zeroing in on your eCommerce business and put in place the right reactive measures.
First a bit of context…
New behaviours have emerged
Working and learning remotely feels now less traumatic than it did a few weeks ago. This will likely have a massive impact once the emergency is over, and speculating on its lasting second and third order effects turns into quite an interesting exercise.
Quite paradoxically in fact, so many people just experienced “work freedom” for the very 1st time in their life ...by being stuck at home for two months. It doesn't take a crystal ball to expect that some kind of friction will arise between employees & employers, as they will struggle to find a new “acceptable” balance of WFH vs Office.
What could this mean for your business? How could you take advantage of this shift?
Major adjustments in ad land
As behaviour and consumption shifted en masse, large changes have impacted the advertising space with a broad advertising spend cut across the board.
The interesting thing though is that, while most had to cut due to lower consumption and not enough demand (eg: travel), others had to cut due to too much demand (eg: Amazon) and not being able to otherwise cope with its surge.
The reduced competition for ad impressions, as well as the increased time spent online, has obviously been having a direct effect also on the actual cost of an impression.
This resulted in large CPM fluctuations on Facebook and Instagram.
Social distancing has made us crave for personal connection and this reflected in the increased adoption of new ways to connect, seeing the rise in adoption of experiences like Houseparty, Google Duo or Nextdoor.com.
Large shifts in the type of digital consumption by device too
By not having to commute to work and having constant access to our personal laptops at home, the digital consumption has shifted to larger screens and therefore shifting from Apps to Websites.
This does NOT mean that the mobile-first approach to web design should take the back seat, especially as online payments are getting incredibly easier by the day on mobile vs desktop.
Take this however as a good nudge to make sure your desktop UX is in great shape and friction for the customer is minimised, while ad campaign landing pages and checkout funnel are working hard.
The booming eCommerce and the O2O (Offline-To-Online) migration
You most likely saw a surge in the traffic to your website, and although most of it will be due to consumers killing time window shopping, a sizable portion is likely thereto deliver you incremental online sales.
It is incredible to see Shopify seamlessly dealing with Black-Friday levels of traffic on the daily – a testament to the scalability of the platform as well as to the power and potential of D2C eCommerce in general.
eCommerce Penetration at an all-time-high
eCommerce penetration has seen unbelievable acceleration - for example the US saw +10% penetration over the last 10 years (2009-2019) and +11% over just 8 weeks! (March & April 2020).
“There are decades where nothing happens and weeks when decades happen” - Vladimir Lenin
Remarkable times for Beauty brands online 💄
While some brands more than others are feeling the hit of the missed offline sales, their D2CeCommerce has been seeing an incredible surge in sales with some products seeing triple-digit growth (source: Retail Times) online this month compared with the same time last year.
The O2O (Offline-to-Online)migration is driving unprecedented New Customer Acquisition. A remarkable example is that of AdoreBeauty (#1 Australian Luxury Beauty Retailer) who saw lipstick and lip gloss sales drop by 24% while experiencing material growth in other critical categories (eg: moisturizers, hair treatments, bath oils, facial masks, etc..) and acquiring 3x as many new customers as usual.
Our Beauty clients for example saw improvements across the piece registering up to +1.5% incremental Conversion Rate points (depending on the category) during this surge in traffic.
and looking higher up the funnel..
Search trends in Beauty have shown a material shift towards the HOW across both Google and YouTube.
If you lead a Beauty brand, this information should be used to refine your editorial and communication strategy towards more “useful” content production – it will be very much worth testing this new direction across all your CRM touch-points.
What stood out so far
In the wake of the emergency we’ve seen a few brands (like LVMH, L’Oréal and the designer Giorgio Armani to name some) reacting swiftly, decisively and with resonating leadership to provide material support and relief to society as a whole, as well as to their own employees. Remarkable actions that aside from the inherent good karma, will also have the bonus of enhance long-lasting brand perception in the people’s minds.
Looking more broadly I feel most brands, although at varying degrees, reacted decently with their policies and communication.
Some examples of great communication that clearly stood out were the following:
Patagonia, showing emotional connection and setting expectations
Levi’s, being brief, self-aware and grounded
on the absolute opposite other side of the spectrum we’ve sadly still seen plenty of cringe-worthy messaging by respectable brands – along the lines of: give us your money now, and someday you’ll see your stuff… (as per the example below)
Enough pondering - let’s step into action.
So what should an eCommerce leader tackle? Never like today has the need to be a learning organization been higher.
Understanding the shifting environment around us by picking the right data-points and maintaining a cool head in deciding direction and a relentless focus in execution are now crucial. More than ever.
When the storm hits, the focus must shift to the fundamentals
2. CUSTOMER DATA & TRIGGERS
3. TEAM & ORGANIZATION
Sweating the fundamentals is the mantra
Strengthen the emotional connection through relevance.
► Is your messaging attuned with the current moment? Customer centricity now more than ever!
► Is a sense of grounded empathy coming through?
► Did you increase frequency of emails, whilst maintaining core engagement KPIs?
► Have you reviewed all your triggered comms to make sure there’s no tone-deaf leftovers?
► Have you re-planned your editorial & promo calendar? Be very mindful with promo sustainability.
► Have you strategized sampling to drive O2O (Offline-to-Online)?
► Are you enabling existing loyal customers to drive O2O via referral programs?
#2 CUSTOMER DATA & TRIGGERS
Monitor closely evolution and re-evaluate pre-existing logics
► How differently are your Existing vs New customers behaving right now? Tracking customers by cohorts of acquisition (eg: date, channel, etc..) is always crucial - think of these as“vintages” and spot key differences
With such a big wave of traffic are you leaving opportunities on the table or:
► Are you truly maximizing email subscriptions using smart triggers?
► Is your live chat on-site geared up (tech & team) to prompt collaboration and better conversion? How much of it is triggered by real-time interactions?
► Are you using real-time triggers by having a tightly integrated data flow?
► Are you revising retargeting triggers to higher purchase intent for both media and CRM?
► Are your look-alike lists relevant or still based only on your previously acquired customers?
► Are you keeping a closer eye on your existing CAC/LTV model? It will need reviewing as you go.
#3 TEAM & ORGANIZATION
Make sure you can react fast by tightening test & learn cycles
► How effective and tightly planned is your A/B testing process across Media, CRM and UX?
► Cut bureaucracy and overthinking on creative production: excellence is NOT perfection and the consumer response signal coming out of solid testing is extremely valuable. Now more than ever.
► Aside from having the right data available, does your team possess the right way of looking at it?
► How frequently are your CRM & eCommerce strategy and proposition revised?
► Are your CRM & eCommerce teams ultimately operating following a “Growth Framework”?
The Growth Framework as the ultimate Resilience Engine
There’s nothing quite like the Growth Framework to make your eCommerce business resilient – an elegant way of working that’s beautifully agnostic of technology and industry (Airbnb, Spotify, Google, Facebook, Uber, etc…)and yet 100% laser focused on driving results.
In short: the Growth Framework is ¼ culture and ¾ action and aims on optimizing one KPI at a time per each funnel stage (below) structured in a tight roadmap of experimentation cycles.
An eCommerce business that operates along this framework becomes inherently resilient to shocks in demand as it becomes geared to quickly learn and adapt to the shifting terrain.
More to come in the next weeks on the topics above... if what you read resonates and you’d like to learn more, you can reach me on firstname.lastname@example.org
About Saverio Bianchi:
Saverio delivered projects for 40+ of the most iconic Luxury, Beauty & Fashion brands in the world and is Founder & CEO of Atelier & Avenue, international eCommerce Acceleration & Growth consulting firm for VCs, Brands & Retailers.