E-commerce and its ability to decrease costs and increase efficiency is well suited to times of crisis such as these, and while brands need to be mindful of lessons learned during the last recession, they also need to think about what they can do in today’s very different circumstances; Publicis Sapient’s David Carr has some advice.
Previous recessions have been slow-moving affairs compared to what’s happening now. Even during the 2007-08 financial crisis, it took two consecutive quarters of negative growth to call a recession and at its worst, in Q4 2008, the economy shrank 2.2%; this time the UK economy is on course to shrink by 15% just in Q2 2020, with a direct loss of income for people and businesses hurt by coronavirus-related public health measures.
The first thing to do is simply to take stock of where you are, says Carr in his WARC Exclusive, Something old, something new: What can brands do in e-commerce during this recession?.
That means asking basic questions about the 5Ps – Product, Proposition, Place, Pack/Price and People – and focusing on the most viable and sustainable offerings. “This fundamental base line should be compared to a comprehensive view of performance in e-commerce levers across retailers versus competitors.”
Then it’s important to think in terms of “total commerce”, he says, noting that, while a new trade & media ecosystem has emerged since the last recession, e-commerce, trade/sales and retailer media frequently remains separate or poorly integrated.
But trade budgets are often far bigger than marcomms ones, Carr points out. “These budgets usually have an 80/20 split on offline/digital and if 5-7% of the trade budget goes to retailer promotion but this area is not optimised then it is denying a massive impact on e-commerce.”
So “auditing and integrating the benefit of retailer media in e-commerce to support tough Monthly Partner Negotiations should be part of any response to a recession”.
Meanwhile, the current turmoil is changing consumer behaviours around the world. In China, Zenith has reported, 84% of people said they bought a new product or service when in lockdown.
“Most shopping occurs on autopilot,” Carr notes. “This disruption to routines and re-evaluation creates opportunities.”
The Ehrenberg Bass Institute has shown that most online shoppers are also offline shoppers of the same retailer, but they are also more likely to shop at rival retailer’s e-commerce offerings – a practice that will only have grown as they experience shortages of items from toilet paper to pasta.
“This makes the old ‘take stock’ lesson an even more vital first step to get content and propositions right and consistent across all priority online retailers and marketplaces as the new online shoppers inevitably shop around, perhaps driven by out of stocks,” says Carr.
Sourced from WARC