Looking Behind the Curtain of Global Retail
The general picture is changing vigorously. Dozens of offline retailers have closed their stores due to lockdowns. Some of them are switching to online as quickly as possible; omnichannel players embrace their online sector as well. Additionally, the purchases of essential goods are surging, while the sales of non-essential ones drop down dramatically. Consumer behavior is transforming, and e-commerce is in the winning position.
Retailers are in the anti-crisis mode. Affected by distribution difficulties and production delays, companies should focus on pricing to stay afloat. Online shopping has become a new battlefield for retailers. The competition between e-tailers is fierce, and it will remain so for the next few months.
To succeed in these harsh conditions, online retailers should be aware of rivals and market dynamics. Monitoring such dynamics can be effectively implemented with a competition-based pricing strategy, which allows retailers to identify their true competitors and key-value items (KVIs) in addition to allowing retailers to process price thresholds confidently.
While retailers face problems of supplying and pricing, marketers experience their own set of obstacles that emerged because of the coronavirus pandemic.
Facing Current E-Commerce Marketing Issues
The policy of cutdown
Cost-saving initiatives are a major part of the anti-crisis mode businesses find themselves in. Thus, marketers have to cope with the problem of underfunding. Availability, as a driver of business in regular times, loses its influence during the crisis. In other words, media presence, ad campaigns, and other activities aimed at the improvement of brand image and awareness are currently devalued in the eyes of business owners. The decrease of budgets intersects with changing roles in marketing departments — layoffs in many cases have become an urgency. Experts forecast that global spending on marketing will be further reduced in Q2 of 2020.
Unstable consumer behavior
The outbreak has forced consumers to change their purchasing habits. Online grocery and e-pharmacy have drastically increased in popularity. Meanwhile, online stores in the fashion, apparel, and accessories industry have experienced drastic drops of sales up to 40% when compared to March 2019. An instant pivot of shopping patterns has caused two challenges:
- marketers of essential goods online must focus on how to attract more customers
- efficient marketing strategies of non-essential categories are hard to determine and launch.
Traffic and conversion suffer
On a global scale, if you’re not operating in a news segment, the traffic of your site and conversion have probably decreased. According to recent statistics by Neil Patel, the organic traffic to travel industry sites has declined almost half. Online retailers, with the exception of those in food and pharma fields, had near 10% fewer visits to their websites in March 2020. Marketing teams have a difficult task of finding ways to get traffic and conversion metrics back to where they once were.
Two Strategic Moves to Survive the Recession
Embrace your pricing
To help their companies pull through the crisis, marketers should assist in the execution of an effective pricing strategy. In crisis times, price is a key interface of communication with your clients and a strategic factor of growth. That is why your price offers should be more competitive than that of your rivals.
To reach this goal, a retailer needs to understand that pricing during these hard times should be mostly market-based. Analyzing your true competitors’ marketing approaches and advertising your true KVIs gives you an advantage.
Ultimately, you should focus your efforts on the promotion of one profit-making product instead of trying to clean your stocks by offering discounts on items that are in low demand. Such a strategy will not work now due transformed customer preferences. Using competitive data you can set advantageous prices and promote them to your customers.
Build a robust content strategy
When the environment is chaotic, you need something stable to lean on. From a marketing perspective, an anti-crisis approach should be agile. The uncertain consumer behavior and overall unpredictability force businesses to react quickly but strategically.
A marketing strategy has to be as flexible as possible, yet primarily oriented on the long-term goals of customer LTV and building brand trust. Marketers should develop a robust content strategy, and make it agile and relevant. You need to provide your audience valuable content to stay attractive and top-of-mind since the memory of shoppers is volatile.
Similarly, it’s time to think about lost clients and how to reconnect with them — email marketing still is a good option, especially when combined with content that provides value to your readers. Customers are susceptible to COVID-19 and related topics. It’s not taboo to speak about the current situation. That being said, when discussing the crisis, you should remain empathetic and aware of your audience’s sentiments since everything you do now is being critically analyzed. In simple terms: do not exploit the virus (no -19% sales or similar wicked methods).
Alternatively, now is an excellent time to refine your blog, inspect your content, update any posts that have gone stale, and repurpose it for your audience. When possible, share with your audience some insights or statistics on how your business is handling the crisis — this emphasizes your transparency and credibility.
Paying attention to social media is a must right now. You should work on intense social media presence fueled by great content. However, don’t forget that your audience may be easily irritated. Above all: don’t be aggressive, be responsive to your clients, and be useful. Use social media to share relevant tips and opinions, showing your involvement and intention to help.
Living in the Post-COVID Era
Every crisis has an end. Regarding the current pandemic, unfortunately, we don’t know when it will be over. But we can be sure of some things:
Consumer behavior will change again
How exactly? Hard to say. But it obviously depends on the time spent in the quarantine, the pandemic ferocity, the severity of the economic recession. Presumably, essential goods will remain on top in post-pandemic retail, and consumers may keep the habit of buying extra supplies ‘just in case.’ Currently-trending options like ghost kitchens and home delivery will stay popular as well.
At the same time, shoppers will tell you what they want. It may sound too obvious, but it’s true. Now, e-commerce focuses on market rules and competitors. But when the crisis is gone, shoppers’ transformed demand patterns may become a central force of sales. Therefore, it is essential to communicate with your customers and examine their behavior regularly.
Offline may strike back
People will miss the good old shopping experience and may visit physical stores to refresh those emotions. Offline shopping, especially of non-essential goods, will probably thrive. In addition, offline store owners will ensure the ‘cleanliness’ of that experience: scan-and-go stores equipped with sanitizers will attract customers. That is why when focusing on short-term initiatives, businesses shouldn’t completely ignore the long run.
We, as humans, are on the verge of something epic. We, as specialists, should understand how to act. Even though online retail is currently in high-demand, e-commerce marketing is still facing many challenges.
To help your business stay afloat, be adaptive in decisions and transparent with your customers. To be successful, determine and present your advantages to your customers, existing and potential, with the assistance of a sound content strategy and market-based pricing.
About the Author
I am a Pricing Solution Architect at Competera with more than 10 years of experience in Marketing Research and Analytics. I am proud to be a part of our team that is passionate about helping retailers to develop and succeed. We are always happy to share some expertise and insights.