Free eBook: Coronavirus Survival Guide for E-Commerce Retailers

This is the second article in our series on managing your e-commerce business through the COVID-19 pandemic. In Part 1 we discussed the impact on consumer behavior.

In this article we provide an overview of the impact of the pandemic on digital advertising and conversion then move on to present a range of marketing tactics and strategies that you could implement to help your business thrive both during and after the pandemic.

Impact on digital advertising and conversion rates

Internet usage has grown significantly with many people choosing to, or forced to, stay at home. Unsurprisingly, online ad spend has declined sharply as advertisers pull back their budgets due to uncertainty and a looming recession. 

The Interactive Advertising Bureau (IAB) reported that US digital ad spend dropped by one-third (33%) in March in response to concerns about consumers’ willingness to open their wallets during these uncertain times.

Large retailers have cut back ad spend, most notably Amazon who turned off most of its Google ads on 11 March. This appears to be in response to Amazon’s struggle to meet overwhelming demand for essential products. 

The good news is that higher traffic levels and less advertising mean that the costs of advertising online have declined. For example, Wordstream reported a 9% decrease in average cost-per-click (CPC) for its retail clients on Google search. So you should be able to get more traffic to your site more cheaply than before.

However, on the flipside, depending upon your retail category, you might expect to see a drop in your conversion rates as shoppers tighten their purse strings and browse e-commerce sites more for entertainment than a desire to purchase. Wordstream reported a 14% overall drop in retail conversion rates on Google search. 

However, some retail categories have shown improved conversion rates. Wordstream saw a 15% increase in search conversion rates for cards and greetings, a 30% increase for gift baskets and a 43% increase for floral arrangements.

Marketing tactics & strategies you can adopt

Changing consumer behavior, constraints on the supply chain and the types of products you stock will all need to be considered when deciding how to adapt your marketing to best fit the continually evolving situation.

Focus on your best customers

It’s always easier and cheaper to get existing customers to buy from you again than to acquire new customers. In these challenging times now, more than ever, it’s important to focus your marketing efforts on nurturing and rewarding your most valuable customers.

Give your best customers the VIP treatment by rewarding their loyalty with discounts, free shipping or value-adds that will incentivize them to make purchases now. 

For frequent purchasers consider offering a loyalty program like Amazon Prime where customers can get free shipping in return for a monthly subscription fee.

Reposition your products

Consumers initially spent up big both offline and online on essentials – stockpiling groceries and health products to build up their pandemic pantries and medicine cabinets. 

If you sell any essential products you would want to focus your marketing efforts around those, assuming you have sufficient stock. But what are you to do if you don’t sell essential products?

As more and more people are forced to, or choose to, work from and stay at home they have started to purchase more products that:

  • Keep them and their families entertained 
  • Enable them to work productively from home
  • Help them keep them fit and healthy 
  • Make them feel better emotionally 

Products that meet these needs can be considered to be the “new essentials”. 

Consider shifting your marketing efforts to the promotion of any new essential products you stock and focus on repositioning your products to show how they benefit people now they are spending most of their time at home. 

For example, Rodd & Gunn, a New Zealand based menswear retailer, has repositioned its sweat tops and pants as the perfect solution for being comfortable whilst working from home.

rodd-gunn-email

International bookseller Book Depository has started focusing on promoting books about stay at home topics like cooking, DIY and arts & crafts.

book depository email

Dell has repositioned its computer products as the perfect solution to working from home.

dell Facebook ad

When prioritizing products to promote focus on those with the best margin and the most reliable supply chains.

Offer value-added benefits

You might consider adding new services or bonuses that will be appreciated by consumers and make them more likely to open their wallets. For example, offering to personalize purchases with etching or monogramming might be highly valued by consumers. Alternatively, you could offer free gifts with purchases above a certain amount.

Boost your remarketing & retargeting efforts 

It’s worth considering shifting some of your marketing acquisition spend to remarketing and retargeting. Remarketing involves sending emails and messages to reconnect with known customers who recently visited your store without making a purchase. Retargeting is advertising your store and products on other websites and apps to known and unknown people who visited your store. 

In these difficult times consumers may take longer than usual to make a purchase decision so reminding them of your store and the products they viewed can be an effective way to get them back.

Facebook Ads, Google Ads and Adroll are all great platforms that enable you to dynamically target ads that contain products to people who previously visited your store. 

With the current constraints on supply chains it can be difficult to restock your products as they sell out. But you don’t want to miss the opportunity to sell to people looking for out of stock products. Apps like Maisie enable you to subscribe customers and automatically send back in stock notifications via email, SMS or Facebook Messenger as soon as your inventory has been replenished. 

If you’re already running abandoned cart recovery emails through your e-commerce platform or email marketing platforms like Klaviyo you could also consider sending abandoned cart reminder messages in Facebook Messenger and WhatsApp via apps like Maisie

Create content that adds value to your customers

Content is a great way to find and engage new customers as well as strengthen your relationships with existing customers. 

The COVID-19 pandemic presents a great opportunity to create new and unique content that helps people better endure their time at home. Depending upon your brand, products and target audience you could create videos on topics like how to keep fit and healthy at home or produce educational “how to” guides on various home hobbies and interests. Alternatively you can create something humorous that helps people find a welcome distraction from all the bad news.

Expand your social media presence

Social media networks have seen a significant increase in usage since the start of the pandemic. You should look at ways to tap into this increased social media usage by asking your staff and best customers to spread word of mouth about their favorite products and how they enable a more comfortable homestay.

Test new channels 

If you have the right products, sufficient stock levels and a reliable supply chain you could test selling in online marketplaces like Amazon and Walmart if you’re in the United States. 

You might also wish to explore marketing in new channels that have boomed during the pandemic. Some examples are online gaming sites and the apps Tiktok and House Party, usage of which has grown greatly due to social distancing measures. Of course, make sure any new channel matches your target audience and, if so, invest time to understand the best ways to engage and market to people in these channels.

Start building your audience on Facebook Messenger and/or Whatsapp

Facebook reported a 50% month-on-month increase in messaging volumes on its Messenger and Whatsapp services following the outbreak of the coronavirus. 

If your customers are spending a lot of time in these messaging apps it makes sense for you to try to engage with them there as well. You can look at advertising directly within Messenger or Whatsapp or you could consider adding Messenger plugins to your website to help build your audience.

Focus on the profitability of your ad campaigns

Given the rapidly changing situation it’s wise to be conservative and focus on the profitability of your ad campaigns to ensure you’re making money from every sale. This means changing your focus from metrics like CPA (cost per acquisition) or ROAS (return on ad spend) to metrics like First-Order Profit.

To ensure every dollar you invest in advertising is profitable you should be thinking in terms of the marginal cost and marginal return. For example, if I spend an extra $100 on an ad campaign, will that increase my profit by more than $100? If not, you should be looking to reduce your spend to the point where that last dollar spent is break-even.

Note that the economics of your ad campaigns probably will have changed a lot over the last month. You might be seeing lower CPCs and CPMs but, depending upon your retail category, your conversion rates may be down. 

Rethink your ad creatives

In the current environment the usual ad copy and creatives are unlikely to perform as well as they have in the past. Consumers are understandably nervous and worried and won’t respond well to being sold to. 

You should rethink your ad imagery and copy to emphasize the simple pleasures of being at home and the convenience of your service.

Adjust your paid search campaigns to reflect new search trends

As search behavior is shifting continually and no one knows what will be trending tomorrow it’s important to review your search keywords regularly. You need to keep on top of how much traffic your search ads are generating and quickly add new negative keywords to your campaigns to ensure you’re not reaching irrelevant panicked searchers.

Make sure to visit Google Trends regularly to understand changes to what people are searching for online so you can take advantage.

Shift ad spend from Google Search & Shopping to YouTube & Google Display Network

As ad traffic from Google Search and Google Shopping appears to have reduced sizably, either due to reduced search volume or people being less inclined to click on search ads, you might consider shifting some ad spend to YouTube and Google Display Network where ad traffic is up significantly. Whilst this should lead to increased website traffic you’ll need to weigh up or test the relative latest conversion rates of these different channels to determine whether it will increase or reduce overall revenue.

Create geo-specific audiences

If you sell to customers in countries outside your home market remember that every country is at a different stage of the pandemic so consumers in those countries will have different needs. So you’ll need to consider creating different audiences, creatives and messaging for your ad campaigns in each country to ensure you remain relevant.

In these uncertain and ever-changing times it’s more important than ever to keep on top of your marketing and be prepared to constantly adapt it as the situation unfolds. 

Good luck!