Investing in relationships with consumers has never been more critical to the growth of e-commerce businesses. As the Coronavirus crisis deepens, new data has found, 90% of consumers say they are now shopping more online. What we are buying and where we are buying it from is also evolving, says Joe McCarthy, director of performance marketing at Klayvio.
Talking to The Drum Network editor, Chris Sutcliffe as part of The Drum Digital Transformation Festival, McCarthy revealed the macro trends that are developing in e-commerce consumers begin to adjust to their new normal. The data is taken from two surveys launched by the marketing platform in mid-March, one focused on consumer and another on commerce brands, and combined with data from its 30,000 customers. Watch the webinar on demand here.
What are the emerging ecommerce trends?
"People are being forced to shop online to get what they actually need, and that is one the largest trend we have seen," says McCarthy. "It presents such a unique opportunity for e-commerce brands. Customers are really searching for them right now to get the products they need in their daily lives."
Food and beverage sales rocketed in the early days of the lockdown, but so did sales of beauty and cosmetics and apparel and accessories. Demand for toys and hobbies soared as consumers looked to entertain themselves and, when as the schools closed, their kids. At this point, speciality products, including electronics and jewellery, were considered low priority.
A second significant trend - the "new essentials" - appeared when consumers were asked what they intended to spend on in the following two weeks. According to McCarthy, this new category includes products in health and fitness, kitchenware, home office equipment, skincare and toys and games.
Jumping forward, Klayvio's data for April shows that electronics are "starting to pop right now". The survey shows that 25% of respondents under 45-year-olds see it has an impulse purchase as they seek new forms of entertainment. Sales of homewares and DIY materials are also rising as people update their homes and take on projects they didn't previously have time to do.
Spend has increased across almost every vertical, even those people claimed they would not spend on, with some sectors performing better than before the Coronavirus. According to McCarthy, some of this is attributed to consumers getting over the initial shock of the pandemic. However, it is also due to a 58% growth in the number of individual shoppers in the UK using e-commerce brands.
The changing consumer behaviour
Consumers are also turning to independent retailers to source products they need, but also because of concerns about larger retailers fulfilling orders. Usage has risen from the low 20% to nearly 40%. Consumers are also open to trialling new brands as they hunt to get the products they need.
McCarthy sounds a note of caution, however. "When asked the real reason that they were changing their buying behaviour, 70% of consumers told us that the top reasons are product availability and free shipping."
McCarthy says that direct to consumer brands are in a strong position to capitalise on this wave of new e-commerce consumers. He highlights Hummingbird Bakery, which has had to close stores but is investing in its relationships with customers by sharing its most popular recipes. He says: "It develops a little of loyalty and a warm feeling that everyone can use just now."
The brands that are doing this well are already reaping the rewards, he adds. "We use this average number that a brand grows at 15% year over year. That's like the traditional growth we use internally for e commerce businesses. We see in some cases, businesses growing at 40% or 50%, compared to February. That's two years of growth in a single month."
How should brand communications adapt to these changing times?
McCarthy says brands should take this opportunity to review their communications, especially automated messages, to make sure everything sounds the right note for the current times.
He advises concentrating on three key areas – communicating with empathy; sharing good work within the local community or with first responders and generally be sensitive and aware.
The other trend is communicating effectively, he adds, particularly when you consider that availability and free shipping are driving many purchase decisions. McCarthy highlights US toilet paper subscription service Who Gives A Crap. While the service was quickly unable, it was upfront about its lack of inventory on its website. Instead, it asked customers for their email addresses so it could let them know when stock arrived—a simple but effective communication.
Ecommerce brands should view this time as a unique opportunity for brands to invest in lasting relationships with new consumers as well as in deepening relationships with existing customers.
He concludes: "You have customers who know you, and who are ready and willing to purchase from you again. There are so many people out there discovering new brands; you have an opportunity to create those new relationships. There's just tons of value right now. "
Watch the webinar on demand here.