Question

The impact of COVID-19 on user behaviour and ecommerce

There’s no doubt that the crisis caused by the global Coronavirus (COVID-19) pandemic has created an incredibly difficult business climate. Businesses are being presented with many new challenges as international borders close, bricks-and-mortar businesses shut their doors, and people are told to isolate at home. Many companies face temporary or even permanent closures, with staff facing months of financial uncertainty and worry.

Consumer behaviour has been forced to immediately change, and change on a massive scale. Those in isolation or under lockdown can’t perform their usual routines, especially since many local shops have been forced to close their doors for safety reasons. Concerns about the availability of goods have encouraged panic buying of items in bulk. Financial uncertainty and the prospect of a severe and long-term recession make for a stark backdrop which has led to an impact on consumer outlook, perceptions and behaviours.

For the businesses that remain active at this time, questions are inevitably being asked about how best to cope with the prevailing trading conditions, and how best their strategies should adapt. This is a difficult question to answer since the Coronavirus pandemic is so new that the circumstances are changing fluidly and on a daily basis. Defining a strategy now is difficult as there is limited evidence or precedent to base assumptions on. Initial indications about what might happen to businesses and the economy could be gauged by looking at the data from the countries which first suffered from the effects of COVID-19.

While there’s no guarantee that others will follow the same trajectory, analysis of these countries can reveal useful patterns and insights.

COVID-19 is already impacting buyer behaviour

Online, the world is changing just as fast as offline. In early March 2020 The Drum reported on research that shows that, while annual advertising growth rates in China are predicted to fall from 7% growth in 2020 to 3.9%, ecommerce advertising spend is predicted to grow by 17.7% and social media spending to rise by 22.2%.

This seems to reflect the changes in consumer behaviour as they switch from buying offline to buying online. They also show that as people are spending more time at home, brands have responded by shifting spend from offline media to online, with 14% reporting this course of action.

In the same piece of research, they go on to state that “e-commerce as a platform has already seen exponential growth, especially in FMCG which saw spending through ecommerce channels in China grow almost seven times as fast as the sector overall in 2019; a trend that the coronavirus outbreak is likely to accelerate.”

The same picture is painted in research published by Business Insider Intelligence and eMarketer analysts in March 2020, which suggests that ecommerce is likely to grow as consumers avoid physical stores. Their data suggests that 74.6% of US internet users said they’d be likely to avoid shopping centres and malls if the coronavirus outbreak in the country worsens, and over half would avoid shops in general.

A new study from Ipsos MORI from mid-March 2020 reveals that 50% of Chinese and 31% of Italian consumers say they’re now using ecommerce ‘more frequently’. In contrast, only 18% of UK respondents said that they were using online stores more frequently, with close


to half reporting there was ‘no change’ in their ecommerce habits. However, now that the UK is in lockdown these statistics are likely to change dramatically, probably trending towards the figures seen in other countries with more advanced COVID-19 issues. While the types of goods people need might change due to their circumstances, the need to purchase these somewhere will remain, and we will likely see a general switch to online shopping.

Ecommerce challenges

In theory, online stores of all sizes stand to benefit from the switch of consumer behaviour to online shopping since they are already well-positioned to serve the increasing demand for goods and services. However, there are challenges. Ecommerce is not a magic bullet in itself, and MorningStar cites issues with adoption (especially amongst lower-income consumers) as a dampening effect against any uplift in sales. There are also issues with the supply-chain and product delivery, with companies already starting to be clever about resolving them through innovation.

Perhaps an even more limiting factor for businesses will be the level of readiness of their ecommerce offering. If their online platform is not capable of offering a competitive user experience, the chances are it will fail to entice, impress or retain customers. Ensuring that your ecommerce site or app is optimised and ready will be critical in the success of your online offering, and how competitive you can be in an increasingly competitive landscape. Fortune states that: • “companies with robust e-commerce offerings … will fare the best in the current turmoil” • “analysts agree that retailers still playing catch up on e-commerce will be the biggest losers” • “retailers with good sites will lose the least”

Those are pretty stark warnings, and it’s clear that companies need to ensure that their sites are more than just good. They need to deliver the best ecommerce experience possible. To start with, they must be discoverable via search engines at the time their customers wish to make a purchase, and once customers are on the site the ecommerce platform must be responsive and meet or exceed customer expectations.

Changes to ecommerce traffic We have already seen big changes in search behaviour in the Fashion sector. It’s not uncommon for fashion brands to have a significant proportion of their traffic coming through branded search. In the example below we can see one UK-based fashion retailer’s branded search traffic drop by approximately 40% after strict new measures were introduced in midMarch to combat the COVID-19 virus (we’ve actually seen some other fashion brands drop by as much as 70% in the same period):

During this period, the same site’s generic traffic also dropped-off, indicating a general downturn in demand for fashion items (Lord Simon Wolfson, Next’s chief executive, stated recently that “People do not buy a new outfit to stay at home”).

So different sites, and sectors, will experience different effects from the changes in consumer behaviour. What is clear though is that user behaviour is definitely changing online, and sometimes quite dramatically.

Are ecommerce sites set up to cope with these changes?



Improving your ecommerce offering to remain competitive

As the Coronavirus crisis continues to bear down on the world’s population, and as their behaviour adapts, companies with a strong ecommerce offering can ensure that they are there when consumers need them. Nike, for example, has managed to increase digital sales by 30% as a result of their fitness and e-commerce apps being particularly well integrated.

As consumer behaviour changes and results in more and more customers shopping online, so too will the marketplace change to become ever-more competitive as companies seek to capitalise on this trend. If your site is not found in search engines for relevant searches, or your site’s responsiveness lags behind your competitors, your ability to compete will be severely diminished. In today’s tough economic climate, this is the digital equivalent of rubbing salt in a wound.

This implies that, rather than stopping marketing activities such as Analytics, Search Engine Optimisation (SEO), Content Marketing, Conversion Rate Optimisation (CRO), Pay Per Click (PPC) and Paid Social etc., companies could be best served by investing into (if not doing so already), or investing more heavily into these types of activities. While each business is different and will face its own challenges, investing into these areas may actually help companies thrive in a competitive space, and help offset the financial impact of the loss of offline sales. Investment here will certainly prevent the loss of online market share, and will help position brands in preparation for the increase in demand that will surely come once this crisis abates.

We recently published some tips on How to keep your digital strategy safe from the effects of COVID-19, which suggests some initial steps companies could take to review their current offering and help safeguard their business in these troubled times. While it might be sensible to remain invested in online marketing activities such as SEO and Paid Media to promote your brand during this crisis, it’s likely that the specific tactics employed will change.

Both SEO and Paid Media might need to change the focus of campaigns due to changes in demand, and focus on different sets of keywords based on new consumer search behaviours. For example, we have noticed that Fashion brands are attempting to pivot to loungewear items, given that most of the population is stuck at home. In Paid Media, bid strategies will probably need to be adapted (we have some specific tips about this on our blog here), and SEO might find new opportunities for new types of content and changes to on-page optimisation.

Editorial content is usually seen as a quick win since it normally requires little technical input and can therefore be developed and implemented rapidly. The key is in understanding your customer’s intent and providing content that meets or exceeds their needs. We have noticed some ecommerce companies are attempting to pivot their content marketing to capture users who, as of the beginning of lockdown, are at home with far more time to surf the web. This shows us that companies should probably perform a deep-dive into their Analytics and really understand the current needs of customers, since these needs will almost certainly have changed recently. Have ecommerce sites kept up with these changes? In this new world, as customers are having to spend much more time shopping online, even small changes to a site’s user experience and page load times will likely have a much bigger impact on customer retention and conversion rates.

Performing a careful analysis of how fast a site’s pages load within different devices will usually reveal opportunities to improve site speed, many of which can be fairly simply to implement and therefore represent quick wins.


Remember, page speed is a ranking factor in Google these days, and there has been much research published showing a direct inverse relationship between the speed of a page and the number of conversions. One such study by Amazon showed that an increase in load times of just one second reduced conversions by 7%. This doesn’t sound like a lot, but for Amazon at that time, 7% represented $1.6 Billion in sales! Optimisation of page load times is a genuine opportunity to improve baseline revenue.

In a similar vein, making sites work better for existing customers by analysing their paths to conversion, and the subsequent optimisation of that journey, will allow customers to have a smoother and more satisfying checkout experience. This will almost certainly provide uplifts to the revenue generated by the site, and will probably generate increases in brand affinity too.

Final thoughts While the world is reeling from the effects of the Coronavirus pandemic, user behaviour is being forced to change and shoppers are increasingly moving online. Ecommerce sites are in a position to be able to capitalise on this, but only if they are able to be found by customers in the first place.

While tactics may need to be adapted to the new environment, we find ourselves in, businesses should consider retaining investment in their analytics, online marketing and online content so that they can remain competitive and meet the needs of shoppers. In these uncertain times, there are still opportunities; it just takes a slightly different mindset and approach, and a positive attitude.

Question: Critically evaluate the benefits of the Internet marketplace to businesses and customers within the context of this case study and during the outbreak of COVID-19.

Answer 1

Evaluate the benefits of the Internet marketplace to businesses and customers within the context of this case study and during the outbreak of COVID-19 :

There's no uncertainty that the emergency brought about by the worldwide Coronavirus (COVID-19) pandemic has made an unfathomably troublesome business atmosphere. Organizations are being given numerous new difficulties as universal outskirts close, blocks and-mortar organizations shut their entryways, and individuals are advised to seclude at home. Numerous organizations face transitory or even perpetual terminations, with staff confronting a long time of budgetary vulnerability and stress.

Buyer conduct has been compelled to promptly change, and change for a gigantic scope. Those in detachment or under lockdown can't play out their typical schedules, particularly since numerous nearby shops have been compelled to close their entryways for security reasons. Worries about the accessibility of products have empowered frenzy purchasing of things in mass. Monetary vulnerability and the possibility of a serious and long haul downturn make for an obvious setting which has prompted an effect on customer viewpoint, recognitions and practices.

COVID-19 is as of now affecting purchaser conduct :

On the web, the world is changing similarly as quick as disconnected. Toward the beginning of March 2020 The Drum wrote about research that shows that, while yearly publicizing development rates in China are anticipated to tumble from 7% development in 2020 to 3.9%, internet business promoting spend is anticipated to develop by 17.7% and online life spending to ascend by 22.2%.

This appears to mirror the adjustments in customer conduct as they change from purchasing disconnected to purchasing on the web. They additionally show that as individuals are investing more energy at home, brands have reacted by moving spend from disconnected media to on the web, with 14% announcing this strategy.

In a similar bit of research, they proceed to express that "web based business as a stage has just observed exponential development, particularly in FMCG which saw spending through internet business directs in China develop right around multiple times as quick as the segment by and large in 2019; a pattern that the coronavirus flare-up is probably going to quicken."

Online business challenges :

In principle, online stores of all sizes remain to profit by the switch of buyer conduct to web based shopping since they are as of now very much situated to serve the expanding interest for products and ventures.

In any case, there are difficulties. Internet business is certifiably not an enchantment shot in itself, and MorningStar refers to issues with selection (particularly among lower-pay shoppers) as a hosing impact against any elevate in deals. There are likewise issues with the store network and item conveyance, with organizations previously beginning to be cunning about settling them through advancement.

Maybe a significantly additionally restricting element for organizations will be the degree of status of their internet business offering. In the event that their online stage isn't equipped for offering a serious client experience, the odds are it will neglect to lure, dazzle or hold clients.

Those are quite distinct admonitions, and obviously organizations need to guarantee that their destinations are something beyond acceptable. They have to convey the most ideal online business experience. To begin with, they should be discoverable by means of web crawlers at the time their clients wish to make a buy, and once clients are on the webpage the web based business stage must be responsive and meet or surpass client desires.

Changes to online business traffic :

We have just observed huge changes in search conduct in the Fashion area. It's normal for style brands to have a noteworthy extent of their traffic coming through marked pursuit. In the model beneath we can see one UK-based style retailer's marked inquiry traffic drop by roughly 40% after exacting new measures were acquainted in mid-March with battle the COVID-19 infection .

Improving your internet business offering to stay serious :

As the Coronavirus emergency keeps on weighing down on the total populace, and as their conduct adjusts, organizations with a solid web based business offering can guarantee that they are there when buyers need them.

Nike, for instance, has figured out how to increment advanced deals by 30% because of their wellness and web based business applications being especially very much coordinated.

As purchaser conduct changes and results in an ever increasing number of clients shopping on the web, so too will the commercial center change to turn out to be perpetually serious as organizations try to exploit this pattern. In the event that your site isn't found in web indexes for pertinent quests, or your webpage's responsiveness lingers behind your rivals, your capacity to contend will be seriously lessened. In the present intense financial atmosphere, this is what might be compared to focusing on salt an injury.

CONCLUSION :

While the world is reeling from the impacts of the Coronavirus pandemic, client conduct is being compelled to change and customers are progressively moving on the web. Internet business destinations are in a situation to have the option to benefit from this, yet just on the off chance that they can be found by clients in any case.

While strategies may should be adjusted to the new condition we wind up in, organizations ought to consider holding interest in their investigation, internet advertising and online substance so they can stay serious and address the issues of customers.

In these dubious occasions, there are still chances; it just takes a marginally unique outlook and approach, and an uplifting mentality.

On the off chance that you believe you need assistance understanding the effect of COVID-19 on your business, Ayima has groups of masters who can support you. On the off chance that you have any inquiries or might want to talk with us about how we could help, kindly connect.

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