This year has certainly taken all of for an uncertain, rollercoaster of a ride. Many businesses are now looking to recover from the earlier effects of COVID-19 and we can hear the chorus sing out: "What comes next??"
While we can see a slow recovery of jobs and customer purchasing in Q4, there is also a chance we could go into another lockdown.
With Melbourne on curfew, New South Wales may not be far behind and that certainly will impact the economy and other eCommerce and Brick-and-Mortar businesses in a similar way that did March and April of this year.
To add insult to injury, some of our biggest Australian shopping holidays may be effected by this: Father's Day, Halloween, Black Friday, and even Christmas if we're incredibly unlucky. So what does all of this mean for your business and potential ad strategies??
First, let's dive into how COVID-19 has shaped the industry so far this year and what changes we can expect to see.
We recently research hundreds of brands to see how they are coping with the crisis. The overall trend from our findings was one of great concern, but the realisation that the crisis will affect some industries far more than others.
Essential businesses are booming and seemingly struggling to keep up with the demand they've found themselves in.
Luxury and service-related businesses are in a more precarious position.
And of course, companies that were deemed as 'out-dated' before, for example 'print and old-media' are in the most dangerous situation of all. If they were struggling pre-Covid, they're all but in dire straits now. For example, magazine publishers have already pulled the plug on significant and long-running publications.
So here are the hard hitting stats for the COVID-19 business hit:
69% of Brands Expect They Will Decrease Ad Spend in 2020
69% of businesses have shown that there is either a high or possible likelihood that they will be decreasing their ad spend this year. Presumably some of them are from regions in lockdown and will have already stopped ad campaigns for products they cannot currently sell.
65% of Businesses Noticed a Decrease in Revenue
By March this year, 65% of businesses say that their firms were already reporting a noticeable decline in revenue. Most of the remaining firms are probably in essential industries or regions yet to experience the worst effects of the coronavirus.
74% of Brands Are Posting Less on Their Company Social Accounts
It should come as no surprise that many businesses have slowed down their social media posting. This is a greater drop than overall social media use, but inevitable, considering that many firms are closing up shop and refocusing their activities. In other cases, companies may still be posting, but less frequently. It is possible that this number may reverse to some extent once more social media managers are settled into working from home.
74.6% Of Consumers Are Avoiding Shopping Centres
It's not all that shocking that Brick-and-Mortar shops are suffering at the moment with so many consumers avoiding physically shopping outside of their homes and 52.7% of consumers are just avoiding shops in general.
Google Searches for "Buy Online" Reached 27K in March 2020
SEMrush has looked at how searches for various terms have changed over the period of the Coronavirus. Searches for “buy online” skyrocketed in March globally, reaching up to 27K+ searches per month. This compares to about 15K searches at the start of the year.
Another keyword to see a boost in searches is “unemployment”. Unemployment does, of course, negatively impact buyers’ confidence and consumer spending. There were about 7.5K searches for “unemployment” in March, compared to just 1K in January.
Travel Industry Expected to Lose $820 Billion
No shockers here. The travel industry has been particularly badly hit. The global business travel sector is expected to take a revenue hit of about $820 billion, with China accounting for nearly half of the losses. This prediction was made in mid-March, however, and the financial hit is likely to be higher now. It is now spread more evenly across the world. China saw a 95% drop in business travel since the outbreak and is expected to lose $404.1 billion in revenue from corporate travel.
So with all of this doom and gloom statistics - what can we do as brands to secure our Q4 revenue and implement new ad strategies??
1. Invest In The Demand Surge
Some brands may feel they should hold their ad budget until Q4, while others feel they should invest heavily now because Q4 is so unpredictable. Instead, invest when and where consumer demand is surging; in short, invest now.
It's essential that brands capitalise on ad strategy now. This is especially important if brands’ competitors are also active in the space, since they risk getting left behind and losing share if they don’t pivot quickly during times of change.
2. Prioritise Relevancy and Brand Voice NOW
The best thing brands can do now is invest in building the relevancy and sales of their entire catalog of products and services - not just those that are top sellers. Building brand relevancy takes time and the best time to do it is now if you want to be in a position for success come Q4.
Brands need to ensure that they have the correct paid and organic search strategies in place now and shouldn't delay campaigns until Q4 to launch. You need to be gaining insights on your campaigns NOW in order to optimise and maximise opportunities and efficiencies during the time when it counts.
3. Prepare For The Holiday Season to be Online
For brands that saw a negative impact on sales in Q1 2020, the online holiday season will be more important than ever. This year is anticipated to be the largest online shopping season we have ever seen. Barron’s expects $51.1 billion in online sales during this period, up from only $28.4 billion in 2019.
Apparel and Beauty were both down significantly during the beginning of COVID-19, as most people were stuck at home and not purchasing these items. This holiday season should be used as an opportunity to capitalize on consumers buying more items they anticipate will be of use in 2021. This could see these lagging industries improve.
It is nearly impossible to predict what the rest of 2020 will look like. While many advertisers may need to deal with uncertain times in Q4, it is clear that the industry as a whole is seeing massive growth for late 2020. As more consumers shift buying behaviour online and Q4 sees a hopeful resurgence in shopping, devoting ad spend to eCommerce is more important than ever.
So if you can migrate your services to be bought online, now is the time to start actioning that plan!
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