How can retailers adapt and change.
Now and beyond COVID-19
The Coronavirus has affected all Australians and the economy; self-isolating, social distancing, avoidance of public places, is having a negative impact on the bricks and mortar retail market as we know it. However when there is a risk there is an opportunity.
Take a look at the Google Data that shows the disruptive shift is occurring in the retail sector.
Now is the best real time opportunity to manage the scale of your online and delivery response. Adjusting to the disruption and vastly different needs for consumers for this year. People are adjusting to an entirely new way of life, isolating, working, connecting with others and shopping with different intent and with different ways. As a Google Marketing partner we are keeping up to date with all the Google data and support available to our clients. At a high level we are seeing five main behaviours play out across Australia:
As an online marketing agency we know that online shopping is important with the current change in the market more people have moved to spend online. This can help revive businesses whose bricks and mortar sales plummeted due to the pandemic. The evidence speaks for itself (according to Google Trends, Kantar and GWI)
- 56% of Australians have decreased shopping at physical outlets (compared to the previous month).
- 81% of Aussies are now shopping online.
- 30% are claiming to spend more time shopping online since the covid-19 outbreak.
- 32% claim they will increase their online purchasing in the future.
- 11% say they will be shopping online more once the outbreak is over.
We have seen spend and availability of supermarket delivery impact online shopping behaviours in a major way. “Home delivery” has gained interest in a big way since March, just like with “Online shopping”.
As you will have noticed in the news the increase in panic buying and hoarding, think toilet paper, hand sanitisers,facemasks etc. Whilst 89% of Australians think that hoarders of food and essentials need to stop, a large portion are hoarding themselves. 43% of Australians have more supplies than usual.
According to Neilsen Australians are now in Stage 4 of the consumer cycle. The most notable growth is +45% Online Shopping in FMCG. Stocks of hand sanitisers, medical face masks and toilet paper are the most in demand in stores, with no clear indication of when supplies and demand will return to normal.
There are a number of examples of brands that benefit by maintaining their ad budgets during economic downturns. The least affected businesses are those that have been online. The data and insights indicates that providing the right kind of value at the right time can be a major growth period for some businesses such as when Amazon grew by 28% in 2009 during the recession.
Of course no one can predict the future but you can understand the drivers and precedence for where we are going next and setup to launch out of this lockdown into stage 6 when it comes. Your natural inclination to cut back on advertising during a recession should not be driven by emotion it should be driven by facts and data. As you can see in the examples from Bench those brands that maintain their ad budget and/or change their messaging can see a long-lasting boost in sales and market share.
Next Level Advice
Whilst it can be overwhelming for retailers to constantly keep up to date with the ever changing consumer demand. We know that brands who stay the closest to their customers find it easier to bring in the most value for their new needs. As well as provide the much needed services in high demand during this period. Those brands who know both their market and their customers will be ahead of their competition and cater directly to their customers. Therefore they have the most to gain, now and in the future.
Source: GWI, Global study from GlobalWebIndex across multiple markets, Date: March 31-April 2
Source: KANTAR, Kantar Global Barometer Wave 2 Report, Date: March 27-March 31
Source: Google Trends, KANTAR, Kantar Global Barometer Wave 2 Report, Date: March 27-March 31