We’re witnessing an evolution of consumer demand. Klaviyo, one of our partners, pulled data from 38,000 eCommerce stores to evaluate how Covid-19 is changing buying behaviour and pushing eCommerce as the new norm. 

Demand Before vs Demand Now 

Australian Courier companies such as Shippit and Australia Post are recognising the high-demand and consequent delays in delivery.
Shippit updated the community on April 28 stating, “Due to COVID-19, we have seen order volumes reach peak levels as eCommerce demand surges. As such, there have been continual delays across the carrier network Australia-wide.” 

Similarly, Australia Post has stated, “with the spike in online shopping, we’re processing and delivering up to two million parcels a day across Australia.

As New Zealand opens up the economy again, allowing eCommerce to recommence, we anticipate a similar peak in eCommerce. 

While we anticipate this peak, it’s interesting to consider that the goods purchased may not be what we’ve previously come to expect. Consumers traditionally spend based on Maslow’s hierarchy of needs. But as our lifestyles have changed, new needs and new essentials have arisen. 

New essentials are products that play a key role for the majority of consumers staying home i.e. home-wares, sporting goods, garden supplies, office equipment, and so on. 

 

Covid-19 New Essentials GraphCovid-19 Industry Breakdown by Category

Consumers are still spending, they’re just spending more time online, more time on social media, and have become accustomed to eCommerce. In fact, eCommerce is up 80% since January. The fact of the matter is, a lot of people – even when stores open their doors again – won’t be comfortable going in-store. They’ve become accustomed to shopping online, from their couch, in their PJ’s and will be less likely to go out their doors when they want to buy something. Merchants will need to consider post-covid19 consumer behaviour, as Zyber’s Digital Strategist said recently, “things have now changed forever.”

This is particularly true for the older generation as we’ve witnessed a massive shift in buying behaviour. A generation that was once slow-to-adopt or resistant to adopt all-together, has now become comfortable with shopping online, whether for groceries, home-wares or hobbies, and more comfortable with technology in general. This shift will likely persist.

And this begs the question:

How permanent is this shift?

On average, eCommerce retail sales have climbed at a rate of 15%. This is expected to jump to 22, 23 or 24%. A massive jump in a very short period of time. 

People are purchasing items online they previously would have always bought in-store. They’re trying new categories and expanding their online shopping. Consumers expectations are also changing in regards to how long they’re willing to wait for items. 

“I think E Commerce is going to be the new normal and it’s going to take like probably a good year for retail sales to kind of get back to normal again because people are going to be hesitant.” – Steve Chou

Which eCommerce Categories are Performing Best?

Of course, all essentials are performing well – this is a given.
But besides those typical essentials like food, beverages and healthcare, the new essentials we already mentioned are flourishing.

Sporting goods such as weights are booming as fitness enthusiasts are kicked from the gyms and into their homes. People who continuously make it their New Year’s resolution to get fit are finally at home, with time on their hands, and are also likely purchasing all they need to kick-off their fitness journey. 

Health and beauty is an interesting (and slightly surprising) category to see flourishing, but as Zoom calls become part of our day-to-day, make-up sales have increased. Likewise, people are investing more into their skin-care routine and may be shifting towards healthier lifestyles that include supplements, essential oils, and more.  

See the bottom of this article for graphs from Klaviyo showcasing which categories are performing well.  

The Sales Strategies Businesses Are Implementing

Brands where sales are up have a super optimistic sentiment. They don’t believe this will last forever and are taking advantage of a temporary situation. Whereas, for brands that are down, the general sentiment is nervousness and the nervousness is particularly surrounding how long this will last. 

Almost as many brands are increasing their ad spend as decreasing spend or pulling ad-spend all-together. Decreased competitors means better CPMs, CTRs, CTAs and overall, better ROAS.

Brands are seeing good traffic and results online because they realise consumers are scrolling a lot. People are bored and online – it’s a great time to communicate to them. 

For companies wanting to pull ad-spend and hold onto their cash due to cash flow uncertainties, focusing attention to strategies that can organically push people on-site, such as working with other brands, cross-promoting and other such tactics are great options to avoid burning out now.  

In America, one gym was down, as expected, so reached out to a fitness apparel company with an offer: “We’ll promote your goods to our customers if you give us some revenue share and help us out.” This partnership of affiliation has been a successful strategy by a number of companies, both for short-term survival and also, hopefully, mutual long-term growth. 

What Now?

eCommerce has already become a new norm. For the past 5 weeks, it’s been New Zealand’s only option for many, many products, and will continue to be our only option for certain goods until further notice. 

Never has eCommerce been such a necessity for the survival of businesses. In fact, eCommerce isn’t just enabling businesses to survive, for many businesses, it’s making them thrive. 

Need an eCommerce update or strategy? 

Chat to the experts. 

 

Category: Apparel & Accessories

Apparel & Accessories Graph for Covid-19

Category: Automotive Industry
Automotive Category Graph Covid-19
Category: Electronics

Electronics Industry Category Covid-19 Graph

Category: Food and Beverage

Food and Beverage Category Graph Covid-19

Category: Health and Beauty

Health and Beauty Category Graph Covid-19

Category: Home and Garden

Home and Garden Category Graph Covid-19

Category: Sporting Goods

Sporting Goods Category Graph for Covid-19

Category: Toys and Hobbies

Toys and Hobbies Category Graph Covid-19

Klaviyo logo

Written.

by Sequoia Painter
May 3, 2020

Categories.

Update of Your eCommerce Strategy.

eCommerce has never been such a necessity for business success.

More From Us.