Does E-Commerce Have Coronavirus/COVID-19?

We are in a global pandemic and I’m not going to sit here and lie to you saying my clients or I are not feeling the pain. However, what I am going to tell you is amidst this chaos there lies some incredible opportunities to capitalize on for your e-commerce store right now and in the near future. As Warren Buffet says, Be fearful when others are greedy, and greedy when others are fearful

The relationship between Coronavirus and e-commerce is complicated. Absolutely the industry as a whole will benefit since people cannot shop physically but realize that Amazon will try to swallow industries as a whole since they have an advantage in the supply chain. The good news is as a small business there are great opportunities to ride the Amazon coat tail or dominate specific verticals as a standalone e-commerce brand outside of Amazon. 

 

Phase 1: panic and chaos 

In NYC, where we are headquartered, we have just started to exit this phase as of March 23, 2020. There’s not much you can do during this time just make sure you, your family, and your team is safe. Practice social distancing and make sure to wash your hands frequently. 

We’re seeing major swings (good news) from two sets of seven day data comparisons. For Facebook for example across some of the clients we have:

• $4.19 CPM from Mar 9 – Mar 15
• $2.77 CPM from Mar 16 – Mar 22

It’s becoming cheaper to advertise since so many marketers are pulling out of the game.

CPAs are lowering and ROAS is going up. Just look at a quick snapshot of the same data ranges. 38% increase in ROAS and a CPA reduced by 33%.

In addition, we’re seeing a 71% decrease in CPA by changing our messaging to be Coronavirus related vs generic in this client account (still early on and not statistically significant):

 

Phase 2: quarantine and cabin fever 

In NYC, we are just starting to enter this phase as everyone is home. Italy is about 9 days ahead of us and here’s their e-comm sales so far. 

As you can see sales start to spike as people get cabin fever in their homes and retailers putting out deals. 

 

What should you do: 

• Staying Human and Putting People First: change your marketing message to reflect the increased sensitivity. No one cares that you lowered your pricing.
• Amazon: if you’re on here, bake in the keyword “coronavirus” into your product descriptions, whether your product is related to it or not. It will reap benefits for organic search. 
• Facebook Ads: Instagram Polling Ads
  • Fairly new ad type with FB ads that is specific for the placement Instagram Stories only. You are allowed to ask a question with poll responses to build engagement and drive action.
  • The high engagement results in super-low CPMs and CPCs, driving more traffic to your landing page from high intent users.

 

Phase 3: end of quarantine but caution 

This is the phase China is currently in as of the date of this article. Certain industries such as groceries and food delivery have exploded in revenue 6 fold. 

In South Korea, where the infections are plateaued, Coupang, which has secured $3 billion in investment from SoftBank, has seen deliveries climb to 3 million daily since mid-February from around 2.2 million per day late last year.

 

What should you do: 

• Influencers: start reaching out to all influencers in your space and negotiate sponsored post offers. With high economic tension in the air, these influencers should be open to discussing favorable deals for your brand. 
• Supply chain: Most importantly, make sure your supply chain is in order so you can fulfill the demand when it comes. 

 

Phase 4: it’s over and it’s time to rebuild 

EVERYONE, get ready for Q4!! Black Friday and Cyber Monday seem like eons away but it will creep up fast once this coronavirus is over by the end of summer. We’ll be sharing in the next post how to get ready for this.