Coronavirus & eCommerce

Online Traffic is Up…But Are Merchants Responding Effectively?

We discussed the coronavirus outbreak in a recent post, exploring why merchants should expect to see an increase in fraud and chargebacks as a result of the current situation. Obviously, that’s not the only effect the virus will have on the global market, though; the pandemic will have a profound and lasting impact on the way we do business.

One recent survey found that 93% of consumers say the outbreak will “somewhat or significantly impact” the US economy. That figure, derived from a survey conducted shortly before widespread shutdowns began around the US, is certainly higher now. This suggests a likely blow to consumer confidence in the mid-term.

A growing number of consumers, even across age demographics, say the virus impacts where they shop, what they’re buying, and how much they spend. That’s reinforced by data published by Visa, which suggests that transaction volume in March was down 7% compared to the same period last year.

Despite the pessimistic predications, it’s not all bleak news. Although consumers aren’t buying as much overall, they are shopping online more than ever.

Homebound Consumers Buying  More Online

Tens of millions of people around the country are under “shelter at home” orders. Even when they do venture outside to visit stores, consumers have to contend with bare shelves and reduced operating hours and capacity. It’s not surprising, then, that more and more are doing as much shopping as possible through digital channels.

The survey data suggests eCommerce shopping is up by 21% due to the outbreak. In addition, 29% of respondents say they are taking advantage of BOPUS (buy online, pick up in store) services. BOPUS allows buyers to get products delivered without going in-store. BOPUS channels popular with consumers include curbside pickup (18%), subscription services (17%), and auto-ship (13%).

The number of people turning to remote channels to make purchases will increase if the crisis drags on. As buyers acclimate to digital purchases, we’re likely to see a permanent shift in buyer behavior.

There has always been a sizable portion of the population who were resistant to embracing digital sales channels. Now, many of them are experiencing these channels for the first time as a matter of necessity. They’re “over the hump” in terms of adoption; even once the coronavirus crisis passes, many of these buyers will continue using online ordering, BOPUS, and other digital shopping channels.

The situation is precarious, however, given the current circumstances. The advantages are skewed toward businesses who already have a firm presence in the digital ecosphere; some merchants won’t see any benefit at all. It’s also important to remember that a long-term shift in favor of digital channels will present its own set of challenges.

eCommerce Growth is Inconsistent

The current boon for the eCommerce market isn’t evenly distributed. Data suggests that, while average revenue is up for eCommerce merchants—and their cost per click is decreasing rapidly—the gains are focused on essential products.

Buyers are (unsurprisingly) spending a lot more on groceries, household products, and personal care items. At the same time, they’re cutting discretionary spending due to anxieties about the looming economic downturn. Electronics, toys, fitness, and jewelry have been especially hit hard.

US eCommerce Sales by Units Shipped:

Product	Sales (Feb vs. March 2020)
Baby Products	+1,196.8%
Food & Beverage	+25.7%
Nutrition & Health	+9.9%
Beauty & Care	+9.4%
Sports & Fitness	+4.9%
Electronics	-18.6%
Jewelry	-19.5%
Apparel & Accessories	-25.9%
Toys & Games	-54.0%

Source: ShipBob

Even in well-performing verticals, the sudden increase in activity could prove problematic if merchants aren’t prepared to scale rapidly in response.

We discussed the challenges facing merchants (in terms of scaling and remaining adaptable in the current environment) at length in our previous post. However, it’s worth stating again that businesses could face supply chain disruptions and labor shortages. Plus, the volume of orders submitted may overwhelm their fulfillment and customer service departments. As a result, merchants could see delays, canceled orders, frustrated customers, and chargebacks.

There’s also the prospect of bad actors taking advantage of the confusion to pull off fraud attacks. Fraudsters are already experienced in using card-not-present channels to their advantage; piling on more traffic with limited capacity presents a criminal opportunity that’s hard to resist.

The bottom line: we’re in uncertain times. It could be thrilling to see a sudden surge of online activity, but it could just as easily turn into greater losses if not handled effectively. Effective communication is going to be the key to managing this crisis…so where do you start?

Connecting via Crisis

Understand: while you are likely under additional stress…so are your customers. Now may be a good time to focus less on pitching buyers, and more on forging a genuine connection with them. Email and social media, for instance, are phenomenal mediums through which to reach and connect with customers.

That said, messaging during any major emergency is a delicate balance. Regardless of your intentions, consumers will react negatively if they feel you’re trying to capitalize on a crisis. You need to be earnest above all else, communicating in ways that are relevant, timely, informative, and empathetic.

Every inbox on the planet is currently flooded with messages from brands explaining how they’re handling coronavirus; you don’t need to send anything else like that. What your customers want is for you to care how they’re surviving the crisis.

You should be proactive in your messaging, but only insofar as it directly affects your customers. Changes to your policies that affect your customers are relevant; those regarding behind-the-scenes operations are not. If you can give customers the information they want, you can prevent them from tuning out. This will also free up staff and reduce the burden on your customer service department.

Build Affinity Through Corporate Citizenship

Beyond connecting with individual buyers, this could also be a great time to emphasize corporate social responsibility, or CSR.

Businesses participate in CSR practices for a variety of reasons. It can be a way to see long-term savings in revenue, differentiate the brand, and/or encourage customer and employee engagement. This is in addition to the baseline that it simply feels good to help others.

Now is the perfect time to consider engaging in philanthropy, or doubling-down on your existing efforts. A cash donation to the WHO COVID-19 Solidarity Response Fund, for instance, is a quick and easy way to help. You can also make donations to other organizations, including Feeding America, The American Red Cross, or a local homeless shelter. Or, if you have facemasks or other critical medical equipment on hand, consider donating it to an area hospital.

Not only is this the right thing to do, it will also drive home the idea that you’re here to help. Customers will remember this long after the worst of COVID-19 passes, which could help retain new buyers even once they have the option to shop in-store again.

Open Communication & Compassion Matter

Yes, online traffic is up for many online merchants at the present. Without the right strategy to engage and retain buyers, though, it could develop into a temporary boon at best. The bump in traffic could even be a disastrous bust if you don’t respond at all.

Beyond the practices outlined in our first post, communication and compassion are going to be the two key components that should guide your strategy through this difficult time.