The coronavirus pandemic has had a significant impact on every industry in the U.S. Some industries, such as airlines and recreation, have suffered badly, while others (e.g., providers of home exercise equipment) have boomed. In the world of marketing, the crisis presented marketers with new opportunities to engage consumers digitally.
Here are some takeaways from an extraordinary year:
The Shift in Demand from Brick-and-Mortar Retail to Ecommerce
The COVID-19 crisis led many people to significantly limit physical interactions with others. Strict confinement measures and social distancing to avoid contagion put a large percentage of traditional brick-and-mortar retail on hold, and many of them have gone out of business.
However, retail is far from dead. Many retailers are currently receiving 35% or more of their sales via ecommerce. The pandemic encouraged shoppers to quickly switch to online purchasing.
The pandemic has emphasized America’s digital divide. As online shopping and digital restaurant ordering exploded, many companies were caught flat-footed. However, those that had already invested in robust digital capabilities have been well equipped to stay afloat and prosper. E-commerce penetration increased significantly across several industries after the start of the crisis. Click here to view some interesting graphs that show the following:
- Increased online marketing share in apparel, footwear, and accessories.
- Changes in ecommerce transactions by marketing channel.
- Ecommerce transaction change by age.
Even when restrictions are eased or lifted, many consumers have become used to online shopping and will continue to do so.
Increasing Openness of Consumers to Digital Offerings
The following are some insights from the CMO (Chief Marketing Officer) Survey conducted in June 2020:
- Online sales grew to the highest level in CMO Survey history, constituting 19.3% of sales and representing a 43% increase over the prior three months. Smaller companies (those with under 500 employees) saw ecommerce account for 26.1% of sales. Concentration on online marketing is paying off.
- Importantly, marketers expect this trend to turn into a permanent shift from pre-COVID days. As a result, they are pivoting their businesses to meet this new opportunity. 60.8% of those surveyed indicated they are focusing on building more and better digital interfaces for their customers and prospects.
- Even as marketing budgets are shrinking somewhat, marketers are looking forward to an 8.4% increase in digital marketing spending over the next year.
Social Media Is Even More Important
Social media has been a major tool for marketers to stay engaged with consumers during the pandemic. Some 84.2% of CMO survey respondents have used social media for brand building, and 54.3% have used it for customer retention. Given this focus, social media budgets have risen by 74% since February, increasing as a percentage of marketing budgets from 13.3% to 23.2%.
Marketers believe their social media strategy has been - and continues to be - successful: It’s important to take notice that for the first time in CMO Survey history, contributions of social media to company performance rose - up 24% since February. Social media contributions have previously been flat at average levels since 2016, in spite of rising investments.
Mobile Sales Have Been Flat
Investments in mobile marketing have risen, but mobile contributions to company performance are flat. This is because consumers who are stuck at home have turned to easier-to-use non-mobile options, such as laptops, for searching and purchasing.
Marketers will be challenged to expand these successful social platform behaviors and migrate them to mobile when consumers are able to increase their movements due to relaxed state and local mandates.
The Road Ahead
COVID-19 has required marketers to rethink how their companies engage with customers. Those marketers who can leverage digital, social, and trusted relationships are well-positioned to navigate any ongoing disruptions. However, marketers should continue to move beyond crisis management to investigate opportunities to create more value for their customers.
As consumers continue to integrate ecommerce into their lives, brands and retailers must continue to develop new strategies in order to thrive. More personalized digital content for both short-term sales generation and longer-term relationship-building is critical if a company is to differentiate itself from its competitors.
While much is still unknown about what lies ahead, COVID-19 will have served as a pivotal turning point for digital marketers.
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