How to Adapt Your E-Commerce Strategy To The New Normal
COVID-19 has altered the online consumer behavior. Here’s how to adapt your e-commerce strategy as the world returns to the new normalcy.
The impositions brought upon by COVID-19 have introduced a shift in consumer behavior. The SEA market, which hasn’t been so accustomed to shopping online in the past, quickly adapted to the changing landscape due to the stricter lockdown and stay-at-home measures. With the threat of Coronavirus under control, the SEA countries have shown the green light to restart their economic activities, of course, with certain restrictions. This leaves a lot of room for speculation as to how consumers will accommodate their online shopping behavior now that brick-and-mortar stores are back in action.
To put succinctly, as the economy reopens, the e-commerce stores will continue to thrive as consumers will still be hesitant to visit their favorite physical stores due to health concerns.
How Are Consumers Spending During the Pandemic?
The Nielsen Impact of COVID-19 on Consumer Behavior (March 2020) survey that focused on Singaporean customer behavior reported the following findings:
- 37% of consumers have increased their online shopping activities, and 76% noted that they wouldn’t return to the same levels of online spending before the COVID-19 outbreak
- 69% of users who purchased household products for the first time would continue doing so in the next 12 months
- Except for electronic durables and electrical appliances, non-FMCG products did not see a surge in demand.
Essential services and products such as medical advisory, education, and groceries, have seen a big increase in digitalization throughout SEA, the same as for professional, entertainment, and health-related categories. This vast number of consumers entering new digital categories for services and products has major implications for ecommerce businesses.
Image source: WARC
What the Pandemic Has Revealed About E-Commerce
The regional e-commerce disruption brought in by the pandemic has catapulted online stores into their heydays.
- Brands or online stores that doubled down on their marketing and advertising efforts managed to grow their revenues significantly. In contrast, the ones that cut back on their advertising expenditure struggled to boost their sales. The adage “Out of sight, out of mind” couldn’t be more accurate
- E-commerce companies such as Lazada, Shopee, and Carousell are offering free paid ad credits to NGOs and SMEs to help them recoup the loss faced in the early phase of COVID-19
- Online grocery shopping has been a relatively unexplored niche in the region, which has grown by 300% since the COVID-19 outbreak. This is a golden opportunity for brands to lead this niche provided that they manage to build an unfaltering supply chain.
In this changed ecommerce landscape we identified several trends for marketing priorities that we believe will remain once the pandemic is over.
Emerging E-Commerce Marketing Trends
Along with personalization and omnichannel experience, here are four emerging e-commerce marketing trends to help brands flourish in the SEA region:
1. Social Commerce
Major social media platforms have already introduced e-commerce friendly features for brands. For instance, Instagram Shopping allows business accounts to feature their products in their posts or stories. A few taps on the Shoppable post takes the user to the brand’s website to complete the purchase.
Instagram Checkout lets users complete their purchases within the app itself, though the feature is currently present only in the US. Facebook allows brands to set up a shop on their official Facebook pages.
Apart from these channels, Snapchat has enabled direct-to-consumer (D2C) brands to run dynamic ads based on their product catalog. As the social commerce space matures, the platforms will enable users to complete purchases in their native environment.
2. Conversational Commerce
Categorized under conversational commerce, chatbots and digital assistants use AI to improve CX throughout the buyer’s journey.
Along with website chat, chatbots have made themselves ubiquitous through several messenger apps and are now capable of keeping shoppers updated on their orders. Digital assistants have evolved to the extent where buyers can place orders using voice commands.
A few use cases of conversational commerce include acting as virtual sales representatives, following up on cart abandonment, dealing with order delivery, and collecting post-purchase feedback.
3. Subscription Commerce (SubCom)
Subscription commerce allows consumers to buy frequently used products on a regular basis promoting customer retention and recurring revenue. This includes FMCG, meals, grooming products, etc. SubCom is already an established business model in North America.
The biggest challenge during the nascency of SubCom will be to attract and retain customers, followed by maintaining supply chain efficiency during the pandemic. But as the region recovers from it, we can expect brands to experiment with the SubCom model.
4. Using Google to Drive Sales
Next to the above, e-commerce stores can use the following practices with Google to drive revenue:
- Google Shopping Listings: The retail sector quickly went into jeopardy as the pandemic started to spread like wildfire. To help brands recuperate their losses, Google has made Google Shopping listings free for e-commerce merchants
- Micro-Moment Marketing: Micro-moments are intent-rich instances where the consumer turns to their smartphone to make a decision. Google has identified four micro-moments, viz., I-want-to-know, I-want-to-go, I-want-to-do, and I-want-to-buy. E-commerce stores can boost sales by optimizing content around these moments
- Voice Search: To cater to the growing adoption of voice search, e-commerce stores must emphasize on local searches.
How to Adapt Your E-Commerce Strategy for the Post-COVID World
To bounce back from the pandemic, brands will need to ramp up their marketing activities to cater to the new consumer needs. Understanding how consumers are planning their expenditure will help you strategize your e-commerce strategy accordingly.
1. Focus on Your Bestsellers With the Highest Profit
Not all products yield the same profit. Capitalize on your cash cows, i.e., products with a high sales volume and a higher margin. To stay afloat during this time, stock up on them at all costs. If necessary, build relationships with alternative suppliers to maintain a constant influx of these products.
L.E.K. Consulting’s research in the SEA region indicates that entertainment, fitness, and F&B retail sectors will see growing demand as the economy recovers, followed by consumer electronics, beauty products, apparel, and footwear. Keep in mind these forecasts while planning your marketing and operational activities.
Image Source: L.E.K.
2. Align Your E-Commerce Branding Strategy to New Consumer Behaviors
Firstly, as we noted above, health and safety are on top of the consumers’ minds these days and for the coming future. Brands should take note of that and include safety aspects into their marketing campaigns so that consumers feel safe and connected.
Next, AdColony’s Coronavirus Impact Survey in the APAC region noted that 76% of consumers are keen to stay updated on the brand’s communication, and 47% are expecting ads that show compassion and support towards local communities. Hence, bringing empathy into campaigns is highly recommendable.
Finally, the segmentation strategy should focus on the new consumer context, which is more focused on home (less travel) or outdoors, and more on consumption at home. Hence, creative ways to blend in your products in the home environment will help make the campaigns more relatable. For your paid media, hedge your ad budgets to maximize your revenue in the short-run and plan how you’ll tweak the strategy once everything is back to normal.
Nielsen has categorized evolving consumer behavior into six segments, viz., proactive health-minded buying, reactive health management, pantry preparation, quarantined living preparation, restricted living, and living a new normal. Use Nielsen’s Six Consumer Behavior Thresholds for reference as you are planning your strategy.
Image Source: Nielsen
3. Be Ready for Another Pandemic
The past pandemics have come in waves, meaning even though the countries have been able to contain the spread, there’s still a possibility of another incoming wave. So, if you are an offline brand that has got into the e-commerce space after the outbreak, don’t put your online store on the backseat once everything is normal.
Building a trustworthy CX and customer loyalty should be a priority to create a strong user base. Free shipping is a great way to establish the early rapport, but e-commerce stores need to make the delivery process efficient to convert it into customer loyalty. Brands have done this by partnering with ride-hailing companies. For example, the Indonesian e-commerce company – Bukalapak has collaborated with Grab and Gojek.
Planning a long-term strategy isn’t a wise choice reckoning the volatility of the present situation. Keep evolving your strategy based on your analytics, consumer purchases, and ad campaign results. Use analytics to identify new trends, understand product demand, and new locations and incorporate them into your strategy.
To conclude, brands and marketplaces need to be agile with their strategy when the world returns to the new normalcy. Growing an e-commerce store isn’t easy, but having the right strategy and being nimble despite the situation can help you scale your growth.
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