For businesses around the country, the last month has felt like a lifetime.
But in the wake of an economic downturn, we’re noticing that in eCommerce, the response hasn’t been one of panic. In fact, what we’re seeing from many of our clients is a calm and measured approach.
This article, we’ll detail our observations in eCommerce during the pandemic so far. It will feature specific examples of how some of our clients have chosen to respond. We’ll also highlight four emerging trends during this period among our own eCommerce clients:
- Staying the Course
- Decreasing Ad Spend
- Increasing Ad Spend
- Fluctuations in Organic Traffic
Circumstances are bound to change in the coming days, weeks, and months. With that in mind, we’ll continue to update this post with how our clients adjust. Below is what we’ve gathered over the first few weeks since the economy took a turn for the worst.
Trend #1: Staying the Course in Light of the Crisis
Since COVID-19 caused major concerns in the U.S., this trend has been the most common response we’ve seen. Of 18 clients surveyed, 10 have chosen to wait and see how the pandemic unfolds. Most want to hold on making any drastic decisions.
After all, we only have a few weeks of data to work with at the moment. It’s not a bad idea to wait things out and gather more information before making any major moves.
Now for some of you reading, you may not be in a position to do that. Maybe you’re in an industry hit hard by the downturn. Or perhaps, you have a heavy reliance on cash flow to keep your business running.
But for most of our clients, the shock of the downturn hasn’t weakened the health of their business. And because of that, they don’t need to give up any ground on what they’ve already built (with SEO and paid advertising) in spite of the crisis.
What Staying The Course Looks Like for Some eCommerce Companies
Some companies we work with haven’t seen their business slip too much during the downturn. Meanwhile, there are others that have seen steep drops in results.
In either scenario, both kinds of companies aren’t hitting the panic button, yet.
We have a client in the sporting goods industry that specializes in fishing. In the immediate aftermath of the U.S.’s coronavirus wake-up call, they saw an initial drop in organic traffic. But in the week that followed, visits to their site followed an upward trajectory.
Now when you think about it, this isn’t all too surprising. Fishing is an outdoor activity you can do alone.
We recommended that they highlight this in their messaging. But other than that, they’re not planning to alter much of their strategy. The only changes they’ve made is to postpone the launch of their blog, which they had planned for this time.
Another company we work with sells high-end baby products. Unlike the business above, they’ve had significant decreases in sales from PPC. They’ve generated less organic traffic, too.
The drop in search traffic is likely due to their consumers’ behavior. Luxury baby products are likely the least of their concerns right now. Despite the decreases, the company is still on track to hit its first quarter goals. Although things are changing rapidly, the current plan is to focus more on marketing essential baby products to meet current consumer buying habits.
Trend #2: Decreasing Ad Spend
While most stand pat, we’ve seen some eCommerce companies make cuts to their PPC spend. In fact, 3 out of the 18 companies we surveyed have chosen to do this. Some have to do this because their industries are obviously hard hit by COVID-19 (e.g. travel). For others, it may be more subtle issues. Below are some examples.
Here is an example of industry proving to be a major factor. This particular eCommerce company we work with is in the travel business.
Tourism has been one of the industries hit the hardest by the spread of the virus. As a result, our client decided to cut spending because demand for trips have declined. This is a totally reasonable decision.
Decreasing ad spend has helped some of our partners find their footing. That’s been the case for one eCommerce company we work with that specializes in home improvement.
Before the downturn, we had been helping them recover from a slight decline in SEO. This was due to Google’s latest algorithm updates. Then, the pandemic took center stage, which caused a decrease in search volume in their space.
As a result of lower demand, they also chose to trim their PPC budget. But so far into the crisis, we’ve seen an exponential increase in ROAS (12x now compared to 7x in the previous period) for their campaigns. This is due to lower CPCs (costs per click), and cutting PPC budgets in less efficient areas. This combination cut costs by around 70%, but the revenue drop was only 45% lower. Therefore, we were able to maintain far more revenue than the amount of ad spend that we cut. This led the account, as a whole, to see a sizable increase in ROAS.
Trend #3: Increasing Ad Spend
We’ve also seen a select number of eCommerce companies who’ve enjoyed an uptick in business. In particular, one of the companies we work with has already decided to increase their spend. Meanwhile, another is on the verge of recalibrating their promotional efforts.
What Increasing Ad Spend Looks Like for Some eCommerce Companies
Similar to businesses who’ve been forced to lower their budget because their industry is hard hit by the current crisis, some eCommerce companies stand to get a sales increase from this situation.
For example, some companies sell products that their customers can’t get anywhere else right now. As a result, stay-at-home orders have actually boosted their sales.
Rather than standing pat, these companies have decided to act. To take advantage of the opportunity, they’ve chosen to scale up their PPC budgets.
Take, for example, one business we work with that sells pet supplies. Instead of pulling back, they’ve chosen to become more aggressive. They hope to capture as much new business as possible.
The data we’ve seen since the outbreak supports their decision. Key metrics like transactions, revenue, and ROAS have all been on the rise.
Our assumption is that eCommerce has become a focus for pet owners in light of the pandemic. Many physical retailers have had to close due to stay-at-home orders around the country. That’s likely forced many pet owners to buy online.
Another company we work with sells magazine subscriptions. Despite the downturn, they expect their sales to remain steady.
Why? Because they sell a product that people staying at home have time to use.
They haven’t decided to increase their spend yet, but they’re mulling the possibility. If they do, they may make their digital magazine selection the focus of their new promotions.
Trend #4: Decreases in Organic Traffic
Many of our clients have seen their traffic from Google take a hit during the crisis. Of the 18 companies we surveyed, 4 saw their traffic drop in the days that followed the initial downturn.
This could be because some of the products they sell are non-essential. It’s also possible that many consumers are directing their searches to the topics related to the pandemic instead.
How Some eCommerce Companies Have Chosen to Respond
Decreases in SEO traffic have ranged from significant to slight. For some companies, a decrease in search volume across their niche is the cause. For others, we’ve seen a slight week over week or short term traffic decline, but they are overall still performing better than the previous year.
Homeware and Household
We have one eCommerce company that’s in the home improvement business. They experienced a sharp decrease in traffic in the days after Wednesday, March 11th. If you recall, this was the day when these four news stories broke:
- The World Health Organization officially declared COVID-19 a pandemic.
- President Donald Trump restricted travel to and from Europe.
- The NBA postponed its season after one of its best players tested positive for the virus.
- Tom Hanks and his wife, Rita Wilson, announced on Twitter that they had COVID-19.
The drop in traffic concerned them at first. But they felt relieved to hear that they weren’t alone in their experience, too.
These decreases haven’t scared most of our clients away from pushing onward. One company we work with sells mobile accessories. Instead of scaling back, they’ve approved us to ramp up their SEO efforts.
In April, our plan for this client is to start investing more in the following facets of SEO:
- Link building
- Creating more content
- Re-optimizing any existing pages on their site.
Looking at eCommerce Marketing Long-Term
For the large majority of clients we’ve talked to thus far, the common theme is patience. They see this pandemic as a short-term disruption to business. It hasn’t spooked them into making major changes yet because events continue to unfold.
This is a testament to the kinds of businesses our eCommerce clients have built. Many of them did the hard work of fortifying their companies before disaster struck.
Some are even hopeful about the long-term prospects of their business. Remember the company that sells suburban Home Architectural and Design products? It isn’t farfetched to assume COVID-19’s impact on cities may motivate more people to move out of cities, resulting in new constructions (in suburban areas), thereby increasing demand for our client’s products.
The immediate future is murky. But in spite of the pandemic, the long-term outlook for most of our clients remains optimistic. Before making any drastic changes, they’d like more information. The only way to achieve that is by weathering the current storm with calm.
If you’re debating what to do on the marketing front for your eCommerce store, here are a few additional articles that could help.
- Strategies and Options for eCommerce Businesses During the Coronavirus Crisis
- SEO: How to Pick and Profit From Long Tail Keywords for eCommerce
- SEO: Content Pruning Can Yield Good ROI. This could be a great use of marketing resources for brands diverting spend from other places.
- PPC: A Case Study That Shows Which Metrics Can Optimize for Profitability Better Than ROAS in certain situations.
- PPC: How We Used the ‘See, Think, Do’ Framework to Build Profitable Facebook Ad Campaign Structures. Brands seeing good ROAS on Facebook, like some of our clients, could benefit from this right now.