Coronavirus (COVID-19) & Ecommerce: The Latest Data, Impact, and How to Respond

Aaron Orendorff

by Aaron Orendorff

Mar. 27 2020

Coronavirus (COVID-19) is officially a global pandemic.

And we all have questions.

To help your ecommerce businesses navigate these uncertain times, we’ve put together this article as a guide and repository.

Day-by-day, we’ll be posting regular updates within three sections:

  1. Data
  2. Strategy
  3. Resources

Data: Stats on Ecommerce & Coronavirus’ (COVID-19) Effects

Despite positive signs at the global level — namely, the rebound of Chinese suppliers (Reuters; CNBC) and European travel restrictions only applying to “human beings, not goods and cargo” — concerns around supply chain issues and product shortages remain acute for online retailers.

In the US, recession language has shifted from “if” to “what shape?” And, fears surrounding COVID-19 have played havoc with the stock market.

The good news is eMarketer, Retail Dive, and The Drum all report ecommerce fairing better as consumers turn to online shopping in the short-term.

As an index, we’ve compiled data from 20 accounts at a ~$50M annual spend rate.

All metrics have been standardized to 1-day-click and 1-day-view attribution and then separated into two sets as ecommerce benchmarks: Mar. 1-10 versus Mar. 11 onward.

As of Friday, Mar. 27 …

  • ROAS: +7.26%
  • CPM: -29.85%
  • CPC: -14.62%
  • CTR: -2.39%

Coronavirus’ (COVID-19) impact on ecommerce ROAS

Coronavirus’ (COVID-19) impact on ecommerce CPM

Coronavirus’ (COVID-19) impact on ecommerce CPC

Coronavirus’ (COVID-19) impact on ecommerce CTR

    These trends are not only more accurate than initial data suggested but also more encouraging.

    So too was The New Consumers’ report from Rakuten Intelligence that found US ecommerce spending up ~36% YoY from Mar. 12-Mar. 15, “almost twice the growth rate it had been generating this year.”

    Year-over-year change in daily e-commerce spending

    The starkest divide, however, lies between beauty and apparel. Again, comparing Mar. 1-10 versus Mar. 11 and beyond:

    • Beauty ROAS: +7.25%
    • Apparel ROAS: -32.18%

    Coronavirus’ impact on ecommerce beauty industry

    Coronavirus’ impact on ecommerce apparel industry

    Wider data from ShipBob — monitoring over 3,000 merchants using its 3PL network in the US — shows similar disparity across verticals:

    Vertical

    MoM Sales

    WoW Sales

    Baby products

    +608.26%

    +8.67%

    Nutrition or health

    -2.32%

    -12.70%

    Food & beverage

    +35.75%

    -42.29%

    Beauty & care

    +6.79%

    -52.27%

    Apparel & accessories

    -36.41%

    -42.23%

    Electronics

    -25.63%

    -6.39%

    Toys & games

    -67.62%

    +88.42%

    Sports & fitness

    -30.56%

    +76.87%

    Jewelry

    -23.08%

    -16.61%


    Search engine marketing (SEM) is also being affected. Comparing per-day averages from Mar. 3-10 versus Mar. 11-15 reveals declines across the board:

    • SEM CTR: -14.14%
    • SEM CVR (onsite): -37.47%
    • SEM ROAS: -39.32%
    • SEM cost per sale: +5.73%

    “The temptation is to tighten or pull budgets as a knee-jerk reaction,” says Tony Chopp, CTC’s Director of Paid Search. “In some cases, we’re adjusting overall spend. For others, and especially for any account with automated bidding, we’re adding seasonality adjustments week-by-week.

    “By manually entering previous days as conversion-rate baselines, automated bidding models stand a far greater chance of maintaining their targets.”

    Slick Products — one of our in-house brands under the 4x400 banner — pulled exhaustive channel-by-channel data to compare YoY performance. Below is a small sampling of the totals and paid media: lime-green rows from March 2019; white rows from March 2020.

    In short, while per-day revenue, sessions, and transactions are dipping, efficiency is holding:

    Coronavirus and Ecommerce Data Set 1

    Andrew Faris, the CEO of 4x400, has been sharing his front-line experiences on the Ecommerce Playbook Podcast:

    “It is a fact that constraints generate creativity.

    “Within this new world that we live in — for this moment, for however long it lasts — I’m trying to be clearheaded about the reality that the constraints we have are just going to force us to be more creative about the solutions that we put into place.

    “What I fundamentally believe is that there will be a point where things will come back to relatively normal. I want to stay in the game long enough to get there. So I’m focusing less on growth and more on cash, more on profitability.”

    Want help navigating the new normal?

    If it wasn’t already hard enough, being an entrepreneur just got harder. In the weeks since “the world came slamming down,” the challenges of growth have multiplied exponentially.

    So too has the opportunity.

    ADmission is a membership community and training platform with real-time support, on-demand courses, and a thriving Facebook group of over 800 entrepreneurs, owners, and ecommerce marketers. Normally, it’s $250 per month.

    But from now until Apr. 3 you can join for free:

    • No sitting out the waitlist
    • No credit card
    • No upsells or pitches
    • No strings
    Join Us to Face the Future Together

    Strategy: Hypotheses to Test and Practical Tactics

    To respond quickly and analytically, we’ve created individual dashboards for each growth-team client with two views of each business’s funnels.

    Cost Funnel

    1. Cost per website purchase
    2. Cost per website checkout initiated
    3. Cost per website add to cart
    4. Cost per outbound click
    5. CPM (cost per 1k impressions)
    6. Outbound CTR
    7. ROAS

    Conversion Funnel

    1. Website purchases
    2. Website checkouts initiated
    3. Website adds to cart
    4. Outbound clicks
    5. Impressions

    Cost Funnel and Conversion Funnel Examples

    In this mock-up, notice the red cells in particular

    To do the same, pull day-over-day data into a Google Sheet from the last ~2-3 weeks. Accounts that have seen a 10% or more decrease should be able to pinpoint what day that drop began, typically between Mar. 8-10.

    Divide the days into two sets: Before Drop versus After Drop. Average the daily metrics within each set in a new tab and use %-change formulas to compare them:

    Comparing the two data sets will tell you exactly where your funnel is breaking: i.e., either (1) when costs per event or action jump significantly or (2) when conversion actions suddenly decline.

    Cherene Aubert

    “For businesses feeling coronavirus’ impact,” notes Cherene Aubert, Director of Client Marketing Strategy, “most visitors are clicking but not adding-to-cart at the same rate as before. Once they add to cart, checkouts and purchases are happening at the same rate. They’re likely window shopping and not getting much further than the home page or product page.”

    “Improving add-to-carts is a top priority by:

    • Honing and crafting an enticing offer
    • Capturing emails at the top of the funnel
    • Customizing welcome emails to drive first purchases
    • And, testing the diversion of more budget to remarketing

    That template can also tell you exactly where to invest in creative testing.

    In fact, here are 10 tactics to get you started along with examples and results.

    1. Discounting and messaging “the moment”

    Should ecommerce brands discount during the outbreak? What about addressing safety and shipping concerns? Should you explicitly mention the virus or use softer language around health and staying at home?

    More to the point, how can you think through yesterday’s messaging versus what will convert today in ads, emails, landing pages, header bars, pop-ups, and checkout?

    As with all things, the answer is: it depends.

    But, to establish a baseline, we examined all 418 homepages from 2PM, Inc.’s DNVB Power List — a database that tracks companies based on “employment, growth, funding, and Internet Retailer’s annual ranking.”

    Of those brands …

    • 33.97%: Currently running a discount or sale (excluding free shipping or email sign up incentives)
    • 10.29%: Explicitly mentioning coronavirus, COVID-19, or a direct equivalent (e.g., illness, pandemic, etc.)
    • 3.83%: Using health, safety, or quarantine (at-home) language

    Should You Discount or Should You Discount or “Message the Moment” During COVID-19 as an Ecommerce Business

    The DNVB Power List is paid a subscription: more data around verticals and deal structure will be released soon; the names of those companies will not

    In addition, we also took screenshots of 116 of the 142 sites currently discounting to represent a sample of the deal structures and positioning.

    You can access and download them directly using this Dropbox link.
    2. Essentials and adapting for an at-home audience

    Should brands front load — or even create — products like books, DIY activities, toys, soaps, hygiene, candles, plants, self-care, etc.?

    What about family-friendly or kid-focused editions and special packaging or bundling for “care package” gifting?

    Combining the first two tactics …

    On Thursday, Igloo Coolers launched a donation campaign in support of the CDC’s Coronavirus Response Fund.

    Igloo Playmate CDC Donations Email

    “In the first 24 hours,” says Brian Garofalow, VP of Marketing and Ecommerce at Igloo, “it 4.6x’d YoY growth, 2.8x over projections. Refersion has also pledged to donate our monthly fees to help supporters spread the word after they buy.”

    As an added touch, a number of Igloo’s Playmate coolers part of the donation collection are also family-friendly collaborations with Disney, Star Wars, and VW.

    Together, those factors have helped each of the below ad sets maintain +3.0 ROAS.

    Igloo Ecommerce Coronavirus Ad and Page Example

    3. “Show it off on social” to fill the communal void

    Can “nonessential” brands — beauty, cosmetics, fashion, apparel, etc. — foster community, encourage UGC, and give products that rely on social non-distancing motivations a chance to shine … by hosting “show it off” threads, Stories, or live social-media events?

    Custom sunglasses and goggles maker, Melon Optics, did this masterfully via an organic Instagram hashtag — #restingbeast — led by its head of marketing Ash Van Palmer.

    Melon Optics Coronavirus Ecommerce Examples

    “It took no effort, cost us nothing, got our community to feel involved and gave us content to post,” says James Pointer, Melon Optics’ founder. “In addition, it opened up a ton of DMs and got us engaging in conversation with our community directly.”

    4. “Stay calm and carry on” campaigns

    For high-price-point SKUs or SKUs that depend on out-of-home environments — e.g., fitness clothing — could positioning your offers as calls to maintain normalcy be effective at encouraging the comfort of routines (in an anything but routine atmosphere)?

    Supply’s single-edge razors clock in at ~3x-5x the industry’s usual price-point. In good times, it’s a challenge overcome by educational marketing. In bad times, it’s a show stopper.

    Last week was spent testing and iterating on multiple concepts to cross the conversion divide. The winner? A free year of blades featured in its own ads and integrated automatically to the cart:

    Supply Ecommerce Coronavirus Ad and Page Example

    The results? 5.07 ROAS … with plans to combine that offer with a new educational landing page highlighting the free year of blades from top to bottom.


    5. Displaced groups as newly available micro-influencers

    Event industries like music, minor-league sports, and food have been disproportionately affected by closures. Could those groups not only be helped by ecommerce companies but enlisted for marketing and content production?

    6. Price-sensitive shoppers, domestic and abroad

    While perhaps not a first-order strategy, where do you have margin to promote special discounts?

    Could bundling or tiered-discounts based on cart value help by increasing AOV? Would buy-now, pay-later campaigns entice?

    Alya Skin’s “Afterpay Day Slay” campaign brought together three of these elements: (1) a sitewide sale, (2) multiple bundles, and (3) installment plans.

    Over the last week, its ad creative for that offer has seen a 2.25 ROAS on +$45k in spend.

    Alya Skin Ecommerce Coronavirus Ad and Page Example

    7. Digital products to serve, engage … and sell

    What type of digital products could you produce to better serve and engage your audience: videos, guides, tutorials, infographics, courses, etc.? Should you sell them, use them as list-building materials, or leverage them as extra incentive to nudge hesitant shoppers?

    As an organic expression, Tracksmith’s Culture Club highlights running-related books, movies, and podcasts though an Instagram Stories campaign:

    Tracksmith Culture Club and Founder Letter

    Tracksmith’s founder, Matt Taylor, also released an open letter via social: “And so when things do normalize, let’s be ready to pick up right where we left off.”

    “I don’t know about you,” Lee Glandorf, Tracksmith’s Communications Lead, told Cualate in an article about shifting strategies amidst COVID-19, “but sometimes, even though running is the nicest thing to do when you’re stuck at home, it’s nice to have a little something to get you motivated or excited to run. A reminder of why we run and a little inspiration.”

    8. Owned coronavirus materials versus “support”

    Is it wise to create educational coronavirus-related assets for non-paid distribution and discovery — e.g., emails, blogs, organic social, etc.?

    Or, is it better to invest in support content that doesn’t name the issue directly?

    Summersalt’s Joycast is easily the supreme example of this. Managed via SMS, the program has already garnered mainstream media attention from the likes of Fast Company, Forbes, and others.

    Summersalt Ecommerce Coronavirus Ad and Page Example

    What’s more, the brand has also updated its home page and featured collection with messaging to meet the moment:

    Summersalt Home Page

    9. Network placements and SEM bidding factors

    With CPMs still dropping, should Display and Audience Networks be abandoned en masse or excluded based on negative keywords?

    For SEM, are you applying seasonal bid adjustments — determined week-over-week — to accounts using automated bidding?

    10. Using inexpensive traffic to test and plan ahead

    We’ve potentially entered an era of cheap clicks and low-conversions — tight-fisted visitors all too happy to window shop.

    To leverage inexpensive traffic, what tests can you run: video watch times, homepage CTAs, value propositions, email pop-ups, quizzes, or landing pages? Perhaps checkout as well as cart abandonment emails?

    Equally important, how you can prepare now for a post-COVID-19 future?

    As a model for walking that line, consider CROSSNET: a combination of four square and volleyball that’s typically played on the beach.

    Since quarantine began, the brand has increased ad spend 2-3x. It’s also — as co-founder Chris Meade explained to Privy in a case study on thriving in uncertain times — “switched our sales approach from ‘BUY NOW’ to a message filled with optimism and that better days are ahead.

    “People are looking forward to the summer, spending time with their friends and the world returning to normal.”

    CROSSNET Ad Examples

    As a result, sales have increased by +500%: “We had our best day in company history, five days in a row during the week of March 16th.”

    The winners will be those who can peel back wallet-clasped fingers by removing every impediment to action while still maintaining sensitivity to wider needs, causes, and realities.

    Resources: Assistance, Shipping & Fulfillment, and News

    Resources for Assistance

    Facebook Small Business Grants Program

    “We know that your business may be experiencing disruptions resulting from the global outbreak of COVID-19. We’ve heard that a little financial support can go a long way, so we are offering $100M in cash grants and ad credits to help during this challenging time.”

    Credit Card Relief for Cononavirus Affected Businesses

    “Fortunately, most major credit card issuers are responding by offering assistance to their customers. Goldman Sachs, which issues the Apple Card, is allowing customers to skip their March payments without accruing any interest fees. Amex and Capital One are following suit with similar programs for eligible cardholders.“


    Shopify’s Government Relief Programs for Small Businesses

    “Governments around the world are rolling out financial relief measures and programs to support small businesses impacted by the COVID-19 pandemic. Below, you'll find a list of available programs in different countries to help raise their visibility and keep you informed.”

    Proposed Legislative Responses to COVID-19 (PDF)

    Full text of the Memorandum: Proposals to Help the Economy During the Covid-19 Crisis; including sections on Protecting Consumers and Bolstering the Economy, Assistance to Small Businesses, and Protect Financial Stability and Transparent Markets.

    Shipping and Fulfillment Providers

    With Amazon “temporarily disabling” non-essential products from entering its fulfillment centers, delaying non-essential shipping, and state-by-state “Shelter in Place” restrictions developing in real-time, we’ve reached out directly to a number of 3PLs.

    None report interruptions in service (last updated: Mar. 27, 5:00pm PST). The links below will take you to each provider’s “Status” page:

    Shopify Fulfillment

    ShipBob

    ShippingEasy

    STORD

    Lumi

    ShipperHQ

    ReTrans Freight

    ✅ ShipHero, Promofill, and LeftBrain (confirmed via DM)

    Still, we suggest reaching out directly because work stoppages could significantly slow down delivery times and need to be communicated with customers sooner rather than later.


    Posted: Mar. 18, 2020

    This morning, Klaviyo’s Jake Cohen released a video and email with the first round of results from its ongoing COVID-19 Pulse Check.

    (1) Sales

    57.2% of the 230 businesses surveyed report ecommerce sales are down; 19.8% say they’re up — particularly, at-home essentials in health and beauty as well as food and beverage.

    Takeaway: “They’re spending more on advertising to take advantage.”

    (2) Supply-chain

    While 28.9% say they “don’t have the inventory they need,” issues with fulfillment disproportionately affect Amazon sellers and Chinese manufacturers. A mere 2.6% say their 3PLs are “lagging.”

    Take-away: “Communicate fulfillment expectations transparently.” (Editorial aside: implement this type of onsite messaging cautiously and not prior to direct, verified information.)

    (3) What’s working

    1. Focus on honesty via email and social
    2. For struggling online retailers, reset expectations internally and focus on “empathy” externally
    3. On ads, SEM ROAS is “much stronger if you’re selling what’s considered an essential item for people at home” or a “distraction”


    Posted: Mar. 15, 2020

    Our friend Andrew Youderian — Founder of eCommerce Fuel — sent the following email earlier this morning.

    We urge you to read it’s content and consider taking action.

    eCommerce Fuel Coronavirus Email

    Time Sensitive: Paid Leave Bill Leaves Financing to Businesses

    You may be aware that the U.S. Congress is currently working to pass a coronavirus stimulus and paid leave bill to help support workers and the economy.

    Under the bill many workers will receive up to 14 weeks of paid leave in the event they are sick, need to take care of children when school has been cancelled, etc.

    The Federal government is paying for this leave through the form of tax credits to businesses instead of direct payments or loans.

    By funding the leave with tax credits, businesses are required to dip into their own cash reserves when their revenues and cashflow are being the hardest hit due to the coronavirus outbreak.

    For many businesses, this two-sided assault on cashflow (not to mention the productivity hit) will be extremely difficult to weather.

    I’ve reached out to my representatives in congress and would encourage you to do the same. You can find contact details for your members of congress right here.

    I’ve also drafted an email template you can use to reach out. You can find the pre-written letter here. Feel free to use it verbatim with the appropriate minor tweaks.

    It’s important to act quickly. A version of the bill has already been passed by the House and the Senate is reviewing it now.

    Given the time-sensitive nature of the crisis, there’s a good chance it will be voted on very soon. So if you’re willing to reach out please do it now.

    Hope you’re as well as possible given the circumstances.

    — Andrew

    Remote Work

    As of Mar. 13, all of Common Thread Collective will be working remotely.

    Because the vast majority of our time with clients is remote anyway, just expect to see a few additional “screens” when you join any regularly scheduled meetings.

    For your own organization, here are a few links to help you navigate:

    With active members across a host of ecommerce groups — Ecommerce Fuel, Shopify Plus’ Facebook Community, LeanLuxe, and 2PM’s Polymathic — we’ll be paying attention to noticeable shifts or activity.

    (Note: Many of these groups are closed, so we’ll only share anonymized commentary, tips, and links.)

    Things are changing fast. We’re keeping a pulse on the best sources in the industry, distilling them, and delivering it to you as soon as it becomes available.


    Aaron Orendorff

    Aaron is the VP of Marketing at CTC. Previously the Editor in Chief of Shopify Plus, his content has appeared on Forbes, Mashable, Entrepreneur, Business Insider, The New York Times, and more. Connect with Aaron on Twitter or LinkedIn (especially if you want to talk about bunnies or #LetsGetRejected).