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The Product Data Lab

How to Continue Growing Sales in the COVID-19 Pandemic

Brands and retailers are fighting against many challenges during the coronavirus crisis. IMRG reported a 36.5% YoY growth in retail as electricals, home & garden and beauty sectors thrive whilst fashion suffers. As brick and mortar stores are temporarily closed, there’s a constant shift in online product demand and change in consumer behaviour. Ultimately, retailers are struggling to get conversions and revenue.

 

As some merchants pause trading, there’s uncertainty in the direction eCommerce and retail is heading. Active retailers are scrapping their yearlong campaign plans and investing more into digital channels to continue business. Thankfully desktop search is booming, as people working from home are frequently browsing across online channels. But how can retailer’s keep growing sales with a shifting customer demand?

 

Understand the Changing Demand

Every week that passes is a new learning in this pandemic. From the start of the crisis, eCommerce and retail were not prepared for the overblown demand of online sourcing, as demand in healthcare products such as sanitisers, masks and soap began to surge.

 

When the lockdown was approaching, customer demand shifted onto food, drink, medicines, toilet roll and other household items. This panic caused footfall in supermarkets to soar as shoppers stockpiled their newest demands. Grocers saw 80 million more shopping trips being made in March, as spending increased to £2 billion on food and drink compared to 2019.

 

Once supermarket stock became strained, customers pursued an omnichannel shopping journey to fulfil their substantial needs as quickly as possible. It led ecommerce grocers, such as Ocado, to shut down their app and even take down their site briefly. This allowed them to make site changes to keep up with overwhelming orders, whilst prioritising vulnerable customers. Now, grocers are getting up to speed, but measures have been put in place to preserve stock, limit customers to a certain number of items per basket and give priority to the vulnerable. Yet, the demand is so high that Ocado can’t accept new customers and existing ones can only shop every 14 days.

 

At present, customers have stockpiled and fulfilled most of their essential needs. But while exercise, working and activity is centralised at home the customer demand shifted into adjusting home life into something more convenient and comfortable. These products in particular fulfil the needs for home exercise, home offices, things to distract the kids and making the most of the nicer weather – which we seem to have been blessed with ever since the lockdown. To keep on top of this shape shifting demand, retailers need to analyse and understand time sensitive and unpredictable consumer behaviour trends to create relevant, targeted ads.

 

State of the UK Market

Even though some sectors are bringing in sales, there’s no guarantee they’ll be thriving for the long term. Adaptability is important for retailers to maintain business performance.

 

The strengths of eCommerce and retail are being tested. Different parts of their supply chain are facing challenges severely impacting their customer services. These come from multiple factors hitting businesses such as limited staff, warehouse safety concerns and both online/offline stores being closed down. It’s led to retailers putting COVID-19 notices on their homepages.

 

Many of our customers are in great positions given their strict warehouse processes or investments in automation. For instance, retailers such as Wiggle implemented very strict distancing measures in their warehouses. Others such as BooHoo are also equipped with fully automated warehousing. Even after the recent news of the first animal in Bronx Zoo being infected by a human, it’s unlikely that a robot will ever be at risk.

 

That’s why, after the pandemic is over, many retailers will likely consider significant investments in warehouse automation - if they don’t have this capability already.

 

IMRG Webinar Graph Blog

Source: IMRG Data Webinar

 

According to IMRG’s study of 300 retailers, the market share between fashion, health & beauty, electrics and home & garden fluctuated between the end of February and mid-March. In the past two weeks, home & garden, health & beauty and electricals saw a sharp rise in sales, reinforcing the high demand of home comforts. Unfortunately, as a result, the clothing sector is suffering from a lack of sales.

 

Nosto also reported a -30% YoY dip in fashion online sales meaning, right now, fashion isn’t in high demand. Consumer needs are quickly changing, making it difficult to predict when these poor performing sectors will recover. It’s important to rethink your strategies to quickly adapt to the ever-evolving demand. That’s why we’ve put together our top tips to help you stay on track.

 

Focus budget on high converting, high ROAS product level ad activity

First, identify the current trends in consumer behaviour to find what channels customers are searching on to make their purchases. This way retailers can figure out what channels and paid search ads are best to invest in.

 

Many retailers are investing their limited resources into their best performing channels as a main source of revenue - but it’s not guaranteed to get the best results. This creates pressure on internal teams to secure a high ROI from their Google Shopping product listing ad (PLA) activity. Though PLAs can bring in sales, the way to effectively maximise campaign results depend on the source powering your PLAs: the product data feed.

 

Ensure your product data feeds are complete, accurate, consistent and up to date, to get products in front of shoppers looking to buy and secure higher conversions. By optimising this, they’re able to maximise PLA visibility and gain a competitive edge. PLA activity becomes highly targeted to increase sales and deliver the strongest, most controllable ROAS.

 

If you don’t have a solution provider that can help you to quickly enrich your product data feeds across your offsite channels, our guide can help you to make the most effective changes.

 

Run experiments to target your campaigns to focus on high demand items

Armed with an enriched product data feed, the next step is to optimise your campaign strategy. Whatever new campaigns you’ve spent all year preparing – scrap them. The answers to optimising product performance lie in your metrics.

 

Now is the time to act quickly and make informed decisions with scientific experimentation. But it’s crucial to conduct initial research by diving into your data analytics to identify what products are in high demand and what products are having fewer conversions. Using this in conjunction with tools such as Google Trends, helps to segment what products are in high demand and enables you to tailor your campaigns to push your most relevant, in-demand products.

 

Through this insight, retailers can run A/B and MVT testing on high demand product areas to strategically optimise campaign content. Ultimately, it helps you to drive product visibility and take impression share from competitors.

 

For instance, our fashion retail clients identified shoppers weren’t purchasing a lot of clothing, as they’re spending their daily lives indoors. In this example, rather than pushing “Spring/Summer dresses”, make your campaigns more relevant to current events and focus on “Loungewear” to assure comfort for the consumers newly adjusted lifestyle.

 

If you’re unsure about what content to test, take a look at the types of testing we use for our clients.

 

Maintain or look to increase your bidding spend

During the 1980s Reebok had dominated athletic footwear whilst Nike were initially positioned as a smaller retailer. When the recession had hit the industry, Reebok drastically cut their ad spend whilst Nike saw an opportunity to aggressively invest into more advertising. Once the recession was over, Nike saw greater increase in profits while Reebok suffered from a decrease in revenue and market share.

 

You want to be in the market for the long term. If you have the financial resources, it’s a good opportunity to continue maintaining and increasing your bids while other retailers may be cutting their ad spend. By continuing to invest in bidding you can grow market share and succeed in the long term.

 

Keep on top of your supply chain

Once you’ve got the sale, that’s half the battle won. The true victory is getting your products to the finish line in the hand of the customer. Merchants need to be keeping on top of their supply chain, particularly if their business is based within marketplaces. To keep up with the pace of online demand, prioritise the products already stored in your company warehouses.

 

Logistics companies are performing extraordinary right now, as front-line delivery staff are keeping the UK going. It’s important to set accurate dispatch times to ensure there’s transparency and realistic expectations to avoid disappointing customers in this climate. Make sure you keep them informed all the way through the process. Customers will be more understanding and it's much easier to tell them proactively, rather than dealing with thousands of incoming queries chasing their order!

 

For retailers in one of the current “sweet spots” of customer demand, ensuring the supply of products from manufacturers is key - and needs to be a key focus.

 

Shipping products from overseas will become more difficult due to rising costs. It’s best practice to take on the extra cost for higher value, higher margin products. Perhaps it’s the time to think creatively about sourcing products; maybe there’s a local supplier or direct to consumer (D2C) brand struggling or unable to shift product? Could “making local” in Great Britain start to make even more sense now?

 

Update stock in your feed more often

This goes back to the core of your product ads, but across many channels. To avoid overselling, it’s essential to update your product data more frequently to keep data as accurate as possible.

 

Adding stock buffers for fast selling lines also helps to avoid disappointing customers and risk any long-term damage of bad feedback. After all, successfully selling during a crisis will make your brand more reliable and can build customer loyalty.

 

Solution

Right now, time is of the essence. It’s important to test, learn and scale as quickly and effectively as possible. Even with measures put in place by the government to help people financially, consumers are conscious of saving money in fear of losing their jobs.

 

Pressure falls onto internal teams to ensure online sales continue. So, it’s important to be mindful that basic data management can be very slow and time-consuming without an advanced solution provider. By investing in a solution that helps optimise your data and conduct scientific experimentation at scale, it can encourage you to make well informed decisions and keep on track.

 

If you’re looking for a solution provider that can help, our experts can help advise you on the areas you need to focus on to continue growing revenue. We’ll also provide a free data feed audit to help during this challenging time.

 

Free Data Feed Audit