The coronavirus pandemic continues to reshape how customers search and shop online. As we move along the road to recovery, we must not forget the lessons we learned and challenges we faced during the previous three months. NetElixir was joined by three leading retailers to share their insights, experiences, and lessons from the course of the coronavirus pandemic so far.
“We are seeing abnormally high numbers,” Bose says, in regards to year over year growth. Most retail categories are seeing substantial, triple digit growth:
If your ecommerce business is not growing at 100% year over year, then you are probably losing marketing share.
The Apparel retail category had a slow start, but started gaining momentum with the release of the stimulus checks in mid-April. Bose notes that sales are still fluctuating “off and on, but I’m fairly positive apparel will sustain this robust growth trend.”
The Food and Grocery retail category has had unrivaled growth from the beginning of the pandemic, but demand has since calmed down slightly to average at about 150% year over year growth. Gifting, meanwhile, also saw huge initial spikes, but has also seen a leveling off of demand.
Demand has seemed to shift to the Home Furnishing retail category. Sales spiked in April, presumably with the release of the stimulus checks and demand has persisted. Year over year growth for home furnishing now surpasses Food and Grocery – and is the first retail category in our data set to do so.
Based on the data from the Monthly Retail Trade Reports for 2020 and 2019 from the U.S. Census Bureau, NetElixir forecasts that online sales will account for 23% of total United States retail sales by the end of this quarter – up from the 16% margin accounted for in January. While June’s overall online retail sales quota increase will be slight compared to May’s (a predicted 23% compared to the documented 22%), Bose notes that the trends point to a continued increase.
“What we are experiencing in online retail is nothing less than a gold rush,” Udayan Bose says.
The closure of brick-and-mortar stores and their slow reopening has prompted many customers to try online shopping for the first time. New shoppers continually flock to ecommerce sites – conversion rates are still strong across the retail categories within our dataset. The probability of a visitor converting into a paying customer has at least doubled, if not more, throughout the course of the pandemic.
As detailed in our graph below, all retail categories within our dataset are experiencing an increase in new shopper wins. Apparel has the lowest new customer acquisitions, but still has a year over year growth of 40%, when compared to the same timeframe (May 17 to June 13) in 2019.
“This is conclusive proof that a significant chunk of new shoppers acquired by these retailers are staying,” Bose says. New shoppers acquired over the last three months have increased shopping power and potential.
So, these new shoppers most likely will be permanent online shoppers; they might not exclusively shop online, but as they have started a habit of shopping online, they will most likely continue to shop online at least partly in the future.
New habits are forming. Therefore, omnichannel retailers have to rethink their strategies as more sales are coming from the ecommerce channels than brick-and-mortar means. New shoppers, if continually engaged, can become a massive resource in the upcoming holiday season.
Our live panel discussion consisted of three retail executives of varying backgrounds, whom we were honored to have join us:
“You know the whole world is about to change, but you don’t know how,” Jeffers starts. Along with facing some personal challenges in the wake of the coronavirus outbreak, Jeffers also contended with supply chain disruptions, reforming a work-from-home structure, and back orders from vendors who shut down – challenges that countless other retailers navigated, as well. She relates how much shipping was affected, as simple orders were now being shipped in multiple packages whenever they were ready, which drove up shipping costs.
Kantz misses the camaraderie of the office environment when working from home. However, he says a nimble philosophy helped Itzy Ritzy to survive and thrive.
Pelander says that at the onset of the stay-at-home orders, he did not think it’d still be ineffective at this point in time. Navigating the initial emotional fallout that comes from such a disruption and the new home and family environment proved challenging, as it did for many of us. However, over time Pelander says he has more of a set routine, especially as the volume of online sales for GovX continually ramps up. As his coworkers settle in more to the work-from-home reality, Pelander says he can better envision what a future work environment could look like. One of the most important aspects of this new work future is human to human conversations, checking in on people, offering to help, and showing one’s humanity.
All three panelists feel more optimistic about the future, especially having successfully navigated the shift to remote working and maintaining elevated sales. Kantz says Itzy Ritzy has a strong platform to continue building and growing, so he is1 “very optimistic” about the future.
Jeffers says she is “so optimistic about the future.” One of the advantages of the coronavirus outbreak is that it has forced a quick change in things that may have taken years to reevaluation and push, but has now emerged in a matter of weeks. Most importantly, the pandemic has strengthened relations with a lot of Jeffers Pet customers as Jeffers herself becomes more available to her customers.
Pelander says that he sees more shoppers spending more and more quickly, making him hopeful for the future. Of note is that the members of GovX are still buying expensive products that are nice to have, but not deemed necessarily essential. Pelander attributes this to the occupational security that GovX’s members have – being a community that caters to first responders, military, and similar governmental personnel to share access to discounts and promote veteran-owned businesses.
“We never paused, we never pulled back,” Pelander says, regarding GovX’s ad spend. “We increased an already aggressive ad budget to take advantage.”
Because consumers are less on the move, Pelander noted that the conversion rate on desktops outpaced that of mobile conversion rates.
Kantz agrees in seeing more people shopping faster. Mobile, however, remains supreme for Itzy Ritzy as Kantz jokes that the customer base of new parents don’t have a laptop on their lap, but a child. And, in the coming months, Kantz expects this customer base to grow, as people will continue having babies and working from home with those children.
In response to the coronavirus, Itzy Ritzy created an essential collection to help parents find what they need more easily.
Jeffers sees an increase in questions regarding animal health, as many consumers are now home grooming their pets. Jeffers revamped her call center to respond more quickly to these inquiries, as the need for information exploded. Of note, she sees a change in engagement with email campaigns, as weekends now bolster more response because people are home and checking their emails more often.
All of our retailers agree that showing a more authentic human face behind the brand helps create a better customer experience. By connecting with the customers and taking time to explain delay in shipments or a forgoing of a traditional holiday sale to give employees a day off, customers are more understanding. Pelander adds that overachieving now on customer support in a time of crisis will have a long-term impact on loyalty. This is twofold: connecting with customers now will encourage them to remember a brand and come back to it and, as customer’s shopping habits have reformed throughout the pandemic, so too can business models and customer support centers.
The coronavirus outbreak has been a time of immense learning for everyone involved. Jeffers says she learned how important being human and transparency is to foster even better relationships, between employees and customers alike. Additionally, she adds to question everything – constantly think about how to increase efficiency and learn at every opportunity. Question if there is a better way to do something and act on it, employing one of Professor Jerry Wind’s guidelines for creating opportunities in times of crisis.
“It’s easier to change when everything is changing,” Ruth Jeffers, CEO of Jeffers Pet, says.
Kantz says what he learned blended on a personal and professional level because of how entwined both lives became. While living day to day is not generally considered the best way to live, Kantz says doing so has helped him stay flexible, humble, and agile as he learned to better navigate the new reality caused by the pandemic. He adds to not assume anything – judge benchmark data, but make your own decisions based on what works specifically for your brand. Measure everything.
Pelander concludes that remote working is possible and can become ingrained in our new normal. He adds that time is precious, so work on things that will have an impact.
Bose includes that he has learned more about being thankful for what we have and practicing gratitude.
While concrete advice is hard to give because everyone has a different budget and business style, Pelander says that he finds it easier to plan for the future. People have settled more into working from home and Pelander can look at what is needed to “maintain this in Q3 and nail this in Q4 and what we need in 2021.”
“If you can’t measure it, it doesn’t exist,” Jeffers says, advising to track and measure everything. Monitor inventory to judge if changes in buying behavior are just blips or dynamic shifts.
Kantz agrees on measuring everything to find out what works specifically for your business. “Measure relentlessly,” Kantz emphasizes. The new normal is expanding for everyone and opportunities can be found and created.
Bose concludes to remain optimistic, as the data shows a pent-up demand.
NetElixir is proud to announce our first virtual holiday readiness summit. Connecting the Dots is a ½ summit that brings together preeminent retail industry leaders, channel marketing specialists, supply chain experts, and strategic thinkers from Google, Microsoft, UPS, Columbia Business School, and more. Through this webinar, we aspire to help retail and business leaders rethink their holiday approach and innovate new strategies to move forward during this unpredictable year. RSVP for this summit on August 13th and follow us on social for more updates.
Our next speaker in our Reimagine Tomorrow series is George Day. Professor Day will speak on How Vigilant Organizations Gain An Edge on Thursday, July 9 at 2 PM ET. Register at https://www.netelixir.com/experience/.
You can join the conversation on social media using #NxInsights. If you have any further questions, please feel free to email us at firstname.lastname@example.org.
For further reading, you can see our prior retail analytics updates on retail ecommerce and online shopping behavior: