e-commerce: Pre and Post COVID-19

In a year like no other, the media & advertising landscape has been an unrecognisable quagmire with every business forced to navigate through the turbulent waters of a COVID-19 diagnosed market.

However, with Media Merchants’ (MM) full-service offering, including all things media, digital & creative, our clients were in the best possible position to get through this challenge.

As we look to the future and reflect on the past, it has never been clearer that a strong, flexible, online approach is no longer a choice for companies, but a necessity and key for their survival.

Testament to this is the sharp increase of online sales in Australia.

Pre COVID-19, in January 2020, Australian online sales valued $16.5 billion. If we fast forward through the year to September, this figure doubled to $30.1 billion.

Despite this increase, all companies have faced enormous challenges, and while this varies amongst industries, many have gone through the most enduring period of their existence.

Thankfully, through this tough time there is opportunity and a foundation for change.

With consumers having restricted access to storefronts, Australians have shifted online, and the accelerated eCommerce boom has swiftly followed.

Australia Post has reported that online purchases are up 41% YOY with this rise only set to continue.

This has been reflected across the United States & the United Kingdom with 62% of Americans & 58% of British people saying they shop online more now than they did pre COVID-19.

A key difference between these countries and Australia, is that they were heavily affected by the GFC in 2008 and their eCommerce adaption began in the late 2000’s.

This was a time when eCommerce giant Amazon was becoming a household name, expanding its product offering and increasing revenue, rather than sliding backwards.

COVID-19 will mature Australia’s eCommerce market and quickly bring it up to speed with many other nations around the world.

During this past year, MM has worked closely with many clients, helping them combat the all-consuming COVID-19 challenge. The shift to online, & subsequent focus on eCommerce, ensured that all media strategy & advertising formats had to be adaptable in their approach.

Many of MM’s clients work in the Retail space and faced a range of issues including stock shortages, staff welfare, local area lockdowns and product delivery.

Despite these challenges, a long-term client of MM has come through 2020 with some exceptional eCommerce results. Their online sales are up 81% YOY and are projected to finish 57% up YOY.

They opted for a considered, decisive strategy, driven by a desire to act early & increase budgets rather than pull funds and adopt the ‘wait & see’ approach.

While this success may not be reflected across all businesses in Australia, it is gratifying to see what can be achieved through times of hardship.

Combating local area lockdowns

An online, locally focused digital performance strategy has never been more important than in the past few months.

A catered digital strategy is at the forefront for majority of a key client’s local stores, with all participating franchises receiving personalized media plans generally focused on Search & Display advertising. Why? Put simply, Google is still the place to be, with 94% of Australians using it as their primary search engine. It is crucial to be seen during audience consideration and ensure we are influencing consumer behaviour across various touchpoints.

Rather than the client reducing digital ad expenditure due to COIVD-19, they opted to remain consistent. With 89% of advertisers making some sort of change to their budgets because of COVID-19, this challenged an emerging trend.

Not only did this online approach drive more foot traffic to those local stores, it also contributed to total website users being up 56% YOY & total web traffic per day being up 43% YOY.

Victoria, the worst effected state of the lockdowns, saw website users increase 69% YOY, online revenue increase 117% & campaign conversion rates rise by 31%.

A particular local store in Victoria store saw a 101% increase in New Users & a 100% increase in transactions from Q1 to Q2 directly from their Google Ad campaigns.

The local area campaign success has led to more stores signing up in the subsequent months since. The audience targeting capabilities and direct sales outcomes possible have supported the digital focus during COVID-19.

The local area campaigns do not perform by accident, rather they are the results of a formulated strategy from the MM team. Oftentimes supported by traditional media & in-house creative teams, it is the undoubted benefit of a full-service agency offering which has contributed to their success.

Increasing sales during COVID-19

Achieving business goals and showing growth is always a challenging proposition, made even more so when the pandemic was declared in March.

47% of Australians have indicated they have shopped online more now than they did pre-COVID. This was made evident when a MM client saw average daily online sales increase by 57% YOY. Their increase in sales during this time was not an isolated instance with a main competitor revealing their sales were up 31% YOY across July, August & September.

While marketing & advertising has played a crucial role in sales increasing during COVID-19, it must be noted that the digital shift was not equal amongst companies- some had fantastic online infrastructure and others were left scratching their heads. Regardless, an online focus was crucial to keeping businesses afloat and ensuring they survived the coming months.

Hopefully, all companies had an effective digital strategy in place over the frantic Holiday period. Christmas was a little different this year, with 51% of Australians saying their spending over this time will be impacted by the pandemic.

All advertisers can do is be prepared. Black Friday, Cyber Monday & the Holiday period would have played a pivotal role for many companies across Australia- they were the last opportunities of 2020 to capture business lost during the year or capitalize on leads cultivated in the final few months.

Preparing for 2021

Preparing for 2021 may prove to be the toughest challenge for advertisers yet. While Australia is exhibiting a general level of stability, much of the world is again combating rising COIVD-19 cases and coming to grips with the realities of living with the virus.

To be ready for 2021, advertisers should adopt a holistic approach when reviewing 2020. What worked for their business? What didn’t? How did they combat change? Why were some changes successful & others weren’t? These are all questions which should inform planning for 2021.

Similar to this, it’s essential to engage with customers to get their feedback. Consumer feedback is invaluable and questions around eCommerce user experience, contactless shopping & brand values are all important to understand.

Although it’s difficult, where possible, plan in advance allowing media strategies to be flexible & adaptable to change. Work with publishers and partners who are empathetic to what businesses have gone through and support each other in times of need. Work with those who will be there to help you thrive, not only survive.

Now ten months into the pandemic, Nielsen has noted the reality of eCommerce for companies as a ‘fundamental dependence’ rather than reliance. The importance of eCommerce cannot be understated as we move towards the end of 2020 and into a new year. Australian consumers and businesses alike will continue to be resilient, patient and understanding, as we move forward together.

At MM, success is celebrated across the agency, with all teams & departments working towards a common goal.

In a workplace where people come first, our clients are our partners in everything we do. Their success is our success & vice versa.

Importantly, this cannot be achieved by only one department.

We maintain a full service offering and champion a multi-faceted media mix, one which understands the role all media plays in executing client strategy.

Traditional media, digital performance, creative, content creation & SEO all play an important part.

Understanding these areas and making them all fit together is like a tricky jigsaw puzzle, one we put together with our clients, one piece at a time, until the entire picture is complete.

A selection of Media Merchants eCommerce website builds include:
Built By MM: Designer Appliances e-commerce
Built by MM: Good Price Pharmacy e-commerce
Built by MM: Midas e-commerce
Built by MM: Retravision e-commerce