Getting Through Coronavirus
Practical Steps To Protect Your Ecommerce Business
How Will Coronavirus Affect My Ecommerce Business?
Coronavirus will affect different sectors in different ways dependent upon what you sell, your stock and supply chain and staff exposure to illness.
Travel, hospitality and leisure are taking a big, immediate hit. Conversely, sectors like food, pharmaceuticals, media and digital streaming services are doing well (like Peloton for home workouts and Netflix to alleviate home boredom).
In-demand online services like food deliveries who are flooded and unable to meet demand could see their sales spill over to smaller or specialist retailers while they try to ramp up their own delivery services like Morrisons delivery service expansion.
Physical retailers' loss of footfall from people staying at home is likely to translate into gains for online retailers as people switch their shopping online at least in the short term.
Aside from food, other essential items will still be needed, whether it's medicines, parts to fix people's plumbing and heating to stay warm or to keep vehicles on the road, to less essential but practical items like sorting out the trampoline for the kids to play on as they can't go out, or items for overdue DIY projects for the house.
There is also the major issue of supply chain disruption affecting your ability to have product to sell, especially if you are dependent on imported goods from affected areas of the world, especially China. If you source and manufacture locally then you will be in a stronger position to not only weather the storm but also prosper, as will businesses with a good stockholding stretching out a number of months.
People are important. It will be a high priority for many businesses to ensure as few staff as possible are off work due to illness or self-isolating, especially in manufacturing and distribution where they need to be on-site.
This is not a one-size-fits-all outcome.
While some businesses will lose out, there are others who will gain by having:
- Essential and 'hunkering down' products;
- Good stockholdings and supply chains;
- Coronavirus policies that protect staff;
- Re-assurances in their production and delivery services such as 'no contact' policies;
- Proactive marketing programs and agency support to gain more of the market;
- Optimised pricing, superior delivery services and appropriate returns policies;
- Easy-to-use websites that can handle increased visitor numbers without loss of speed.
How Long Is This Likely To Last?
Coronavirus is having an immediate impact now that will likely persist for 12-18 months for many businesses due to slowly returning supply chains and customers plus the fallout from financial actions taken such as loan holidays and repayments kicking back in. To highlight this, research shows that when the stock market falls by 20% or more it takes on average 534 days to recover again - this is the situation we are now in. On top of that there will be other opportunities, challenges and disruption this year such as trade deals with the EU, US and other countries. What you do now to get you through this period will also benefit you for the future.
What Will Happen To My Website Traffic & Sales?
Early indicators are showing a drop in global web traffic of between 5% - 15% in many sectors when you exclude the worst hit such as travel with falls of around 45%.
Image courtesy of Neil Patel
Global traffic is not distinct enough and we needed to see the impact for the UK so we analysed a good sample of our UK clients at the revenue level (ignoring travel, finance and media which are not sectors we service) and they broadly seem to fit into these 3 categories:
- Essential items e.g. heat and eat, spares and repairs
5% - 15% rising sales in the last week where ad campaigns are present
- 'Hunkering-down' items e.g. home and garden entertainment, DIY
10% - 45% rising sales where ad campaigns present
- Non-essential items e.g. hobbies and home accessories
0% through to -10% declining sales with or without marketing
It is early days and the UK will probably go into a higher level of lockdown if it follows other European countries so it is reasonable to expect further traffic swings either up or down dependent on which category you fall into and the strength of your stock holding, supply chain, staff availability and promotions versus those of your competitors. Another critical factor on the demand-side will be the level of government support for affected businesses and consumers who lose their income.
What Should You Focus On Now & Next To Protect Your Ecommerce Business?
There are actions you can put in place now that will help your ecommerce business immediately:
- Coronavirus policies and staffing
- Quick wins
- Website availability under increased load
- Weekly 'War room' analysis of essential performance statistics
- Price monitoring and promotions
- Stock rationing
There are progressive actions you can take in the short and medium term to strengthen your ecommerce business for the future:
- Improve your service, fulfilment and unboxing experience
- Improve overall management decision support
- Initiate a Continuous Improvement Program
Coronavirus Policies And Staffing
- Communicate internal working procedures related to production, homeworking and self-isolation
- Ensure staff arriving on site follow recommended hygiene procedures
- Be aware of staff foreign travel arrangements
- Restrict visitors to your places of work and trade counters as appropriate
- Restrict taking payment by cash and use contactless instead
- Ensure you have sufficient equipment for staff to work from home and prioritise it to key staff
- Display 'No contact' policies on goods and services to reassure buyers and suppliers
- Update your returns procedures to determine how to handle goods being sent back
- Release a coronavirus statement to customers and suppliers
- Double-down on your digital marketing if your products are in high demand.
This may only last a short period. Analyse and act quickly. Monitor ROI daily.
Consider stock rationing and protecting supplies to key accounts or contracts.
Manufacturers selling through distributors and direct may also wish to hold onto stock to sell themselves.
- Promote fast shipping products on your site and consider listing them on a dedicated page
- Update product page templates with a link to your coronavirus 'no touch' policy
- Implement alerts / monitoring for high value cart abandonments and follow these up
- Improve your existing abandonment emails
- Add manned live chat to your site for immediate customer questions and feedback
Tawk is free
- Add an 'expert answers' email Q&A system to product pages to capture and respond to enquiries
- Ensure product review emails and follow-ups are sent out
- Capture other leads and enquiries in a simple CRM system for sales to track and close
- Follow up existing leads quickly while staffing remains good
- Segment your marketing across different customer types
- Implement simple, readily-available features in your software that can help you now
Website Availability Under Increased Load
This will most apply to providers of in-demand services who will likely see an upturn in traffic.
- Monitor your website availability to avoid downtime
- Increase website server resources to handle extra requests
- Implement a CDN service to reduce load on your website server(s)
- Monitor and optimise slow queries that affect performance
Weekly 'War room' Analysis Of Essential Performance Statistics
Set up a weekly 'war room' to analyse and share developing ecommerce trends with your management team for both week-to-week and year-on-year (like-for-like) fluctuations from demand and revenues through to fulfilment:
- Search demand
- Website visits
- Conversion rates and funnel analysis (for price comparison shoppers)
- Movers and shakers in your product lines
- Customers and loyalty
- Major accounts
- At-risk groups
- Home versus international markets (and exchange rate analysis)
- Regular buyers
- New on-board
- Significant order analysis
- Supply and fulfilment
- Stock position
- Purchase ordering position
- Supplier performance and alternative sourcing
- Delivery performance
- Spend re-allocation / doubling-down
- CAC & LTV
- Product movers and shakers
- Analyse products and categories to look for recent changes
- Run promotions to shore up the 'shakers'
- Think about which products are likely to be affected during a contracted lockdown
- Adjust stock levels and production / ordering schedules accordingly
In addition to your ecommerce metrics the business will also naturally look at:
- Cash and spend
- Regular debtors
- High risk debtors
- Where money is locked up in the business and can be unleashed
Sage user turning over £1m+? Our BI tool can quickly import your data to help identify this.
Price Monitoring And Promotions
Monitor competitor and distributer prices (if you are a manufacturer selling direct) so you can optimise your prices and promotions according to changing circumstances as businesses fight either for survival, to maintain or grow market share or to aggressively take out weaker rivals.
- Implement a price comparison tool
- Check your best sellers price position in the market
- Lower over-priced products where margins allow
- Ensure loss leaders are not over-priced
- Increase under-priced products to improve margin
- Focus on higher priced products to increase AOV (average order value)
- Adjust quantity price breaks to increase AOV
- Run in-cart deals to nudge up AOV
- Feed pricing intelligence into promotions to take more orders
- Adjust promotion frequency based on changes in competitor prices
- Follow up abandoned orders with extra promotions and/or feedback surveys
- Add promotion material into your fulfilment process
Improve Your Services, Fulfilment & Unboxing Experience
Ensure your service is as good as it can be including ease-of-use of your website, customer satisfaction and fulfilment. The unboxing experience represents an opportunity to delight customers, increase social shares and include extra promotional material.
- Collect ratings for CES (Customer Ease Survey), CSAT (Customer Satisfaction) & NPS (Net Promoter Score 'brand loyalty')
- Collect fulfilment statistics
- Collect returns reasons and statistics
- Ask 'discovery' questions to better understand the market and visitors who do not buy
- Improve packaging
- Include a catalogue or flyer
- Include coupons that can be redeemed each month and shared with family and friends
- Engage a specialist in CRO (Conversion Rate Optimisation), experiential testing and competitor analysis
- Similarly, engage a specialist in SEO and organic traffic
Improve Overall Management Decision Support
Businesses must have all the right metrics easily available and accurate so that the right decisions can be made going forward based on reliable information.
- Establish / revise your sales and marketing KPI scorecard to show all pertinent metrics including demand
- Hold weekly 'war meetings' to review demand, revenues, stock, production and fulfilment
- Ask for weekly marketing summaries and recommendations from your marketing agency
- Ensure Product Marketing Managers report on 'movers and shakers' in their portfolio
- Talk to key business partners for practical advice or assistance
- Engage specialists for proactive advice, BI and business planning
- Use a BI tool to analyse your accounts and enterprise in real-time
Initiate A Continuous Improvement Program
Begin a prioritised program of continuous improvement for your ecommerce website and marketing to cover demand-side first and then roll this into other business areas including stock and warehousing, production, fulfilment, purchasing and accounts.
- Implement CRO recommendations and experiential test results in priority sequence
- Action learning points from ratings / surveys across all departments
- Implement BI and KPI monitoring
- Implement wider price monitoring
- Progressively improve product data quality
- Develop better pricing strategies for different customer types
- Introduce personalisation to the website
- Implement more highly targeted email campaigns
- Improve pricing and promotion for key trading periods like Black Friday, Amazon Prime day and Christmas
- Increase integration between systems
- Introduce more automation
Immediate Ways We Can Help
- Digital marketing reviews to feed into your weekly war room & KPI production
- Price comparison software
- Simple prospect management system - start in 10 minutes
- Experiential testing and conversion optimisation advice
Ways We Can Help To Strengthen Your Business Going Forward
- Digital marketing strategy, oversight or direct management
- SEO and organic traffic review
- BI data analysis of Sage accounts and other systems
- Collecting CES, NPS & CSAT data and formulating discovery questions