The digital shift, to paraphrase Gil Scott-Heron, will not be televised – but it will be measured. Retailers and direct-to-consumer (D2C) brands that are now seeing their eCommerce sales take flight would be remiss to ignore the data being generated by the digital shift and the potential marketing opportunities.
As the general retail scene seems to be headed toward reopening, the PYMNTS COVID-19 tracker shows that the digital shift has been dramatic. Now, 39.2 percent more consumers shop for retail goods online than they did on March 6, the first day of our study, and that continues to climb – up 10.5 percent from 35.5 percent in just the last two weeks. Taking advantage of that shift comes down to three areas: testing, customer strategy and measurement, and new marketing tactics.
Testing has generally been reserved for bigger and luxury retail brands. But with the resetting of the crisis, that’s not the case. Big brands like J.Crew and Macy’s have cut marketing spend, leaving the door open for startups and smaller D2C brands. Even brands that have not executed very many marketing campaigns can now test the results without breaking the bank.
The best way to determine the effectiveness of marketing campaigns and messaging is to look at metrics such as conversion rates, cost per acquisition and repeat purchases. In digital marketing, you can typically tell within a week whether a campaign was a success.
“Test everything,” recommends Anna Kayfitz, CEO of data analytics company StrategicDb. “Test new keywords, new audiences and new promotions. If you implement a culture of continuous testing, you will see better results, as you will be optimizing for best results. Just make sure analytics is ready to analyze those results. Depending on your budget, you may be able to read results within three days, which is much faster than traditional advertising.”
Next up, customer strategy and measurement. At this point, it’s almost impossible to measure what could be the most important data point, which is whether new eCommerce customers are new only to a brand or to online shopping in general. Some anecdotal data, such as the number of items bought, average spend and purchasing patterns, can help shed some light. For example, if in physical stores, most people bought jeans and then added socks because they were displayed next to the cash register, are they doing the same on eCommerce sites? Or is an item that was previously not popular suddenly in high demand? To identify trends, it’s important to look at types of products, the average amount spent and the number of times purchased.
One of the most dramatic changes in the customer strategy area is in acquisition costs. For example, take lingerie brand Adore Me, which before the pandemic was seen as a challenger brand to Victoria’s Secret. Now, especially with the Sycamore withdrawal of funding, the challenger tables have turned. April was the best month in Adore Me's history in terms of top-line revenue, with a 66 percent year-over-year jump. Part of the reason for that growth is shrewd advertising. Now that other brands have cut back, Facebook ad costs are down in some categories, and Google Ads bidding is also much lower.
“We've been opportunistic in the significantly lowered acquisition costs,” said Adore Me Marketing Director Ranjan Roy. “For brands with a strong cash position, this is an incredibly important moment to define your medium-term future. We've seen significant growth in our try-at-home service, as well as a product rotation to pajamas over swimwear.”
The third area to pursue is discovering new marketing tactics and doubling down on old ones. After getting customers to opt in, email marketing is still effective. Social messaging, provided it is empathetic, can be an essential marketing lifeline. The bottom line: It’s a good time to be aggressive for those who are new to eCommerce success.
“The world is going to look different on the other side of COVID-19 as teams strengthen their muscles for creating engaging, targeted digital experiences for their buyers,” noted Terminus VP of Marketing Justin Keller in MarTech Advisor. “CMOs that spend this time building end-to-end, personalized digital strategies are going to come out on the other side with a huge competitive advantage over the ones that are simply adapting their live events strategies to virtual ones. Additionally, now more than ever, we're seeing marketing teams adapt rapidly to customer retention and expansion strategies. While customer acquisition programs might be thrown for a loop, marketers are recognizing that focusing on keeping their current customers happy and successful will help them weather this period.”