In March 2020, it felt as though the commerce industry almost grounded to a halt. The UK’s first COVID-19 lockdown led to non-essential business closures and only essential journeys for food, key worker roles and emergency medical visits allowed. Two lockdowns later and the situation hasn’t changed much.
For businesses who rely on commerce, you need to be focusing on achieving some state of digital maturity to help you respond more appropriately to the changing competitive environment. That could mean re-evaluating and changing your e-commerce business model. In this blog post, we’ll explain how you can do that.
Meeting changes in consumer activity
When the first of the lockdowns began in the UK back in March 2020, there were correlated increases in digital spending, including:
- Over 20% for groceries
- 25% for healthcare products
- 15% for the tech consumables sector (supporting the majority of businesses turning to work from home)
Pretty remarkable, considering just weeks before, online retail was down over 11% compared to 2019.
There’s no doubt that the pandemic has driven consumer behaviour changes. However, the move to digital spending had slowly been happening regardless. The pandemic simply accelerated things.
A Google-commissioned survey examined the changes to consumer purchasing behaviour in the UK. Here are some of the key findings and what they mean for your business…
4 things to consider when tweaking your e-commerce business model in response to a crisis
Channel-agnostic purchases are still popular
Likely related to the ever-growing popularity of smartphones, shoppers prefer channel-agnostic purchases. What does this mean for your business?
This emphasises the importance of an omnichannel e-commerce strategy and the need to be present at all points of a customer journey. It’s not enough to offer your customers multiple channels they can use to reach out to you. That would require you to prioritise which channels you should choose for your website.
In reality, you should be placing that choice in your customer’s hands. Whatever experience your customer demands, you should be able to make that happen and ensure it’s a great experience overall.
Ease and convenience are a top priority
We might be home a lot more than we used to be but that doesn’t mean we’re willing to wait any longer than we’re used to. In other words, ease and convenience are still top priorities. People don’t want to wait so ensure your business is always available, whether that’s offering live chat on your website or communicating your availability in marketing messages.
Shoppers expect a seamless online experience. Allow them to find the products and services they need as well as quickly answer the questions they’re asking. The faster and more efficiently you can help, the better the brand impression you can leave in your customers’ minds.
Online research has increased
Online research is more popular than last year, with an average of 84% of shoppers researching online in 2020 compared to 76% in 2019. So, make sure you consider online user experience and website design if your customers are going to find you in search results and easily navigate your site.
Additionally, Google’s Smart Shopper survey also discovered an increase in online research activities among consumers aged 45 and over. For example, 80% of those aged 45-54 are conducting research online compared to 68% in 2019. It’s similar among those aged 55+ – 81% are researching online compared to 62% last year.
An extra tip? Be inclusive when you’re creating your e-commerce strategy, website and marketing messaging.
Lack of stock can affect brand loyalty
Availability is the most important factor that can cause customers to purchase from alternative brands and companies. Particularly in today’s commerce climate, shoppers are less forgiving when they see the dreaded ‘out of stock’ message.
Before COVID, they may have travelled to an in-store branch (or several) to find a certain item. Now that this isn’t really a viable option, their response to find an alternative product or service on another company’s website.
Tackle this by being communicative. Let your customers join a waiting list so they can see when a product or service will become available again. Or, offer them similar products/services in its place.
An example of successful e-commerce business model pivoting in action
Here's an example of a business changing their e-commerce business model slightly in response to a crisis. Hopefully it inspires you...
An East Anglian specialist coffee roastery, whose core retail customer base is underpinned by town/city market square presence, has experienced a 400% increase in online orders in March (compared to February). For a business whose daily trade was 90% footfall driven, this is a clear indicator that they have done something very right!
This isn't organic growth - “new customer” purchases remain on the same curve. This is existing customers (including yours truly) who are engaged with the brand.
And this growth ticks the correct boxes: Average Order Value (AOV) is up, frequency can be measured, and the business is in a position to plan throughput and future stock levels.
The most interesting point of validation here was when customers were unable to choose their “preferred” varietal (I've learnt that this is the term used when talking about coffee beans 😊), they did not abandon their purchase. They either requested a recommendation from the owners or simply selected the “house” varietal at the same quantity.
In terms of brand equity, very impressive. Looking back at findings from the Google-commissioned survey in the previous section, this business hasn't been considering those points now...it has been doing so from day one.
When it comes to B2B e-commerce strategies, there’s more to consider…
This blog post is rather B2C-focused so if you’re a B2B company, you might be wondering how my above advice would translate for your sector. You can loosely follow what’s covered above because it would still work or you can check out this guide to B2B e-commerce strategies.
We differentiate the nuances between B2B and B2C buying journeys, the challenges faced by the B2B commerce landscape and how the right technology can drive you towards success. Have a read below.