Since mid-February, stock markets have been experiencing a very high level of volatility – broad global market indices dropped steeply. This is often an important indicator of future uncertainty, and will inevitably impact consumer buying behaviour.
Many Key Sectors Affected
Already there have been many sectors affected across the globe, with the most significant being: Leisure, Airlines and Energy Companies.
Central banks around the world are slashing interest rates again and expanding their quantitative easing (QE) programs to provide liquidity to the market to keep the economy going. Governments are taking action by giving fiscal stimulus like paid sick leave, free testing and support to health care institutions. There is no doubt about it – we have again landed in a global crisis, which can trigger an economic crisis.
A high risk hovering over the market is the presence of small and medium enterprises with high debt burdens and low cash flows (or none at all) to cover their interest expenses and overheads. In addition to the risk in the SME sector, a big concern is also in the fixed income space, where BBB- rated companies (now yielding almost same as junk-rated fixed income) are at risk of being downgraded. This will, in turn, lead to layoffs damaging the consumer buying power. But is it all doom and gloom? Or are there still commercial opportunities we should be looking out for.
Opportunity to Save the Day
Goldman Sachs forecasts Global GDP to decline to its lowest in 30 years at approx. 2% and expects the S&P 500 index to be -15/-20% for 2020. However, all the estimations are based on uncertainty, which makes it difficult for businesses to choose the best way forward.
With some refocusing, we still have time to achieve our Q2 goals and maybe even do better than planned in Q3 and Q4, despite the effects of the coronavirus threat. Businesses will need to adjust and accommodate their sales strategies now that many governments have announced huge emergency packages to enforce trust in the market.
We need to keep in mind that consumers might still be hesitant (but above all, limited in their mobility) to keep the economy going. As Chief of Staff to President Barack Obama, Rahm Emanuel, once said: “You never want a serious crisis to go to waste. It is an opportunity to do things that you think you could not do before.”
Can COVID-19 Drive E-Commerce Sales Beyond 2020 Projections?
According to Forbes, coronavirus may drive the US and likely global e-commerce sales beyond 2020 projections. Consumer behaviour is influenced by technological advancements, environmental, economic and sociological factors – all of which are evident with the current COVID-19 pandemic.
According to Adobe Analytics, e-commerce sales in many product categories have already been spiking since the beginning of March. And at Hatch, we see similar record-breaking results in our Where to Buy Online data reports.
In Europe and the US, retail stores are temporarily closing. However, many brands and retailers have been encouraging shoppers to switch to online. It’s not only a practical way to purchase all necessary products but when people are in self-isolation – mainly working (and watching Netflix) – online shopping becomes a pretty compelling distraction.
Big Shifts are Already Happening
Even though many countries are carefully ‘unlocking’ and allowing limited movement, it will still a long time before all limitations will be removed. In de midst of all this, we have already seen a shift in purchase behaviour with more and more consumers conducting their sales through online channels. In March, Amazon announced it’ll be hiring 100K extra workers to cope with the expected surge in online sales. The company also announced it would limit certain types of shipments, giving ‘Fulfillment by Amazon’ priority over third-party shipments. Though temporary, it’s an important development in how businesses work with their sales channels.
Since week 11 we are seeing online sales growing steady and more than ever as a result of the strict measures taken in Europe and the US, such as closing restaurants, retail stores and more to avoid the spread of CODIV-19.
Aggregated data from Hatch reporting dashboard
This global crisis is teaching us that brands need to get their tools and technology in place to conduct their sales through multiple channels and that they should be able to shift rapidly. Even with the immediate dangers potentially deferring and countries relaxing some measures, permanent changes are already taking place. So based on what we can see in the market, these are the three key lessons to consider in relation to your commerce tactics:
Have an e-commerce channel
We understand that it might be an open door in times like these, but many brands still do not have an e-commerce channel that works effectively. So, first things first, make sure you have a well-functioning e-commerce channel so customers can buy your products online and implement SEO and SEA, so your products are easy to find.
Offer a Flawless Customer Journey
One sure thing about the internet is that it’s full of endless possibilities and offers. Customers only need to type a keyword or brand name into their search bar, and they have access to offers and brands they might have never heard of before offline. As a brand, you want to keep your customer focused on your product. So when your marketing dollars and euros pay off and a consumer lands on your product page, make sure you have a clear path to purchase; this means having visible CTAs at the product card, with a wide selection of buying options.
Combine Direct and Indirect Channels
There is an ongoing debate about direct vs indirect sales channels – which is better? But why make your clients choose? Ultimately, the best practice of the fully omni-channel organisation is to have both direct and indirect channels combined in one ‘buy now’ button. This will ensure the customer has the best experience and stays focused on buying your products instead of your competitors’, which will result in revenue increase and a better relationship with your retailers.
Where to Buy Online Solution For Your Business
Hatch’s Where to Buy Online solution adds a turn-key ‘buy now’ button to your website — just like if you were to have an e-commerce solution set-up. However, our solution also provides purchase options to your customers, so they can buy your products not only from your website but also from online retailers that you work with (e.g. Mediamarkt, Best Buy, Amazon and many more). Furthermore, our live-reporting dashboard provides you with a clear insight into consumer buying behaviour, best-performing retailers, stock availability and pricing at retailer sites.
Want to know more about Hatch’s Where to Buy solution? Book a demo today to ensure you reach your 2020 targets.
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Written by Skirmante Bikaite