Growth in online shopping - is it here to stay?
Consumer Behaviour has changed enormously over the past few months. When usually this scale of change can take years, we have witnessed shifts in behaviour over a matter of weeks. Of course, with people being asked to stay at home with their families, shops, cafes and restaurants being forced to shut their doors and travel being restricted things would change and the impact would be huge. The question we all have is – will this change in behaviour stay or as lockdowns ease around the world, will we go back to ‘normal’. The truth is that we don’t have a crystal ball, but there are definite signs, signals and data suggesting that there will be some aspects which are likely to stick.
New (online) customers have been forced through barriers to entry
The % of online grocery shops increased from 8% to 13% during lockdown in the UK (that’s the same percentage points increase which took the previous decade to achieve, Kantar) With setting up new accounts online, and 2 out of 3 customers going on to repeat purchase, combined with customers lower levels of comfort and confidence to shop in bricks and mortar stores likely to continue, we can forecast that there will not only be a growth in retail sales online from new customer groups, but also in customers at a total level.
One of the most impacted groups is the over 55s – who are not only buying more online, but using online much more in the customer journey, specifically for research. According to Kantar data, before Covid-19, 60% of over 55s researched products online (in consumer electronics, fashion and home categories) this shifted to 8/10 during lockdown. Brands will need to review their websites to ensure that they are equipping these new customers with everything they need in order to make their purchase decisions.
Brands who succeed will be those who integrate their off and online offerings – giving customers flexibility and choice to shop how best suits them. Now is an opportunity to surprise and delight both new and existing customers with a positive experience at every touch point.
Emily Long, Head of Client Services
PPC Insight - Look to China for clues on what consumer behaviour will stick
It’s not clear when the Covid-19 pandemic first arrived in UK, but the first cases were confirmed on 31st January, a month after the first official reports of cases were made in Wuhan. The UK entered lockdown on 23rd March, 2 months after Wuhan entered their own lockdown on 23rd January. Due to this delay, we’re able to look to the trends in China and see how UK, European and US consumer behaviour may look in the coming weeks and months. 60% of consumers in China say they would avoid going into crowded areas to make a purchase, indicating that the spike in online shopping is unlikely to drop down to pre-Covid levels imminently. We’re also seeing the continuation of elevated home and garden purchasing, and a focus on mental and physical health. We’re already seeing emerging trends in the UK in purchasing outdoor clothing and equipment and this is again a trend which has continued to last in China. This highlights that while we have seen some changes in behaviour since restrictions have started to lift, we may now see the current behavioural ‘moment’ stick for the remainder of Q3.
Imogen Collins, Head of PPC
Social Insight - Are you Q4 ready?
The long term trend of convenience and value will be amplified in Q4 as the gifting mindset kicks in in a changing landscape.
What we are seeing is that Covid-19 has been a catalyst for a decade of digital growth in just 5 months eCommerce sales now make up 27% of all sales.
In 2019, adults across EMEA were surveyed as part of a cross Media Owner study by Facebook and Google to discover where they would look to discover ideas and inspiration. 71% said in-store, 44% search, 41% Facebook family, and 15% from other social platforms with the remaining touchpoints coming from website, TV, OOH, print, and radio. Bricks and mortar is still important but since COVID-19, the role in the path to purchase has now changed as consumers now go with a buying mindset rather than part of the discovery stage. With digital growth and eCommerce increasing, although it is too early to be certain where the gaps will be filled from in-store, I would say it is a safe bet that it would be coming from online.
This means that now more than ever that quick loading times and making every step to purchase frictionless is of great importance. 70% of Gen X and Boomers have experienced frictions when shopping on mobile. Social Media platforms can support this in your digital plan by utilising shopping formats, such as DPA and Shopping Pins to drive to tailored landing pages.
These feed based formats are particularly key when it comes to Q4 as behavioral signals are difficult to target as we are trying to reach an audience whose mindset and purchasing intent has shifted from ‘BAU’ purchasing to gifting. Leaning in on a feed with a broader audience means that we can capture these mindset changes while still able to tailor each ad to an individual. This is a common factor before Covid-19 and the landscape we are in now.
Having said this as much as I would like to say that Paid Social can drive the majority of sales, realistically this is not the case, and another common attribute pre-Covid-19 and now, a multi-channel plan is still key.
Rachel Milner, Head of Paid Social
Affiliate Insight - How to tackle continued uncertainty
As digital ad spend is on the rise, affiliate networks including Trade Doubler and Impact saw clients shift their digital marketing budgets to affiliates last quarter, investing in the security of the Cost per Acquisition model during the uncertain period. This was reflected by the growth of leading networks Awin who saw a 41% increase in general retail in Q2, whilst Web Gains saw an overall increase of 27%
Will this strong performance and optimism continue in H2? With Covid-19 it’s impossible for us to make any predictions with certainty. However, Awin have given us a steer on what we are likely to see in H2, outlining three core themes:
- Continued diverse brand representation on publisher sites
- A shift in retail spending back to brick & mortar will not slow digital growth YoY
- Marked performance on peak trading days like Singles Day and Black Friday.
With online spending set to continue, the mood within the industry is certainly positive. At Awin’s recent Insights Webinar, when asked to describe the immediate future of the industry in one word, affiliate agencies answered with language suggesting the future is bright; ‘booming’ ‘exploding’ ‘rebooted’ ‘innovation’. Our team can definitely agree. We’ve seen our clients lean heavily on the affiliate channel as a means to manage unpredictable spend and maintain a positive, healthy ROI and expect this approach to continue throughout the year.
Bethan Callely, Digital Marketing Account Manager