It’s been more than a year since COVID-19 first emerged, and it’s still unclear what the post-pandemic world will look like. That uncertainty has made it incredibly difficult for many businesses to plan for the future. Add in the challenges many organizations face simply surviving during a pandemic, and it’s easy to see why this is the most challenging environment many of us have ever encountered. So how do businesses chart a path forward?
As a digital marketing agency, Logical Position (LP) uses data to inform our planning, strategy and tactics. Since the pandemic started, we’ve doubled-down on this approach, searching for clues as to how consumers would respond. Now that the first “COVID Christmas” has passed and we’ve collected nearly a year’s worth of data, a few significant trends have emerged that offer businesses a roadmap for success once the pandemic ends. This begins with a substantial shift towards online buying.
A Strong Shift Towards Online Buying
Before the pandemic, shoppers were already moving away from traditional retail and making more purchases online. With the United States setting record daily COVID infection rates as we entered the holiday shopping season, many experts believed online buying would be unusually strong. Once we began seeing real data, however, it became clear just how much the pandemic had accelerated this online buying shift. Mastercard SpendingPulse data showed how this played out nationwide:
- Holiday online sales grew by 49% year-over-year.
- Department store online sales grew by 3.3%, but overall sales declined by 10.2%.
- eCommerce sales accounted for 19.7% of retail sales, which is a 13.4% increase from 2019.
Unsurprisingly, much of that new online traffic went to Amazon. The company reported its “largest holiday shopping season so far” in the critical five days between Black Friday and Cyber Monday 2020. Independent sellers on the platform also saw a 60% increase in sales during the same period. But as the old saying goes, “a rising tide lifts all boats.” LP client data shows that robust online sales gains benefited nearly everyone this year.
Record Holiday Growth Among LP Clients
The COVID Christmas season was one of the busiest ever for LP. Between Black Friday and Cyber Monday, our clients generated more than $46 million in revenue throughout all online channels. Our clients also saw a record 120 million clicks during the entire fourth quarter, a 47% increase year-over-year. Even our smaller sample shows how swiftly Americans embraced the move from in-person to online shopping. As we dug deeper into our data, we uncovered more interesting results.
One stat we track closely is the percentage of people who shop for our clients’ products online using their desktop computer versus a mobile device. In 2017 and 2018, mobile device traffic grew by double digits for our clients. That growth slowed a bit in 2019 but was still up nearly 9% over 2018. In 2020, however, mobile growth-share slowed to only 1%. With more Americans working from home than ever, they likely did most of their shopping from their at-home workspace, rather than fumbling with their mobile phone.
This slower mobile growth rate is great news for eCommerce sellers. Online shopping is easier on a desktop, which is why they have higher conversion rates. With the growth in total online sales combined with a flattening mobile growth rate, online sellers will see more revenue from a larger number of website visitors.
How Should Businesses React?
All this data points us in an important direction. During this strange and unprecedented COVID season, consumers developed new shopping habits they won’t forget once the pandemic ends. Despite very unfavorable conditions in the broader economy, many companies saw record online revenue growth. As the economy recovers, pent-up demand will flow back into the market, especially as restaurants and the travel and leisure industries return to strength. When that money does come back, more of it will head online, fueling even stronger digital growth as the broader economy improves. So how should businesses start preparing for success in a post-pandemic economy?
#1: Build a Digital Infrastructure
Small businesses must use this moment to build their digital infrastructure. Not only will it help them now, but it will also position them to capitalize on increased online spending when the pandemic finally ends. For most companies, this process encompasses five different areas:
- Set up a digital storefront: Online selling platforms like BigCommerce or Shopify make this process easier than ever.
- Create shopping content: Build out the digital storefront with high-quality photos and product descriptions while compiling relevant data like shipping rates, SKUs and applicable taxes.
- Invest in search advertising: An effective Google Ads campaign uses relevant search results to drive website traffic.
- Capture relevant data: Use tracking tools to capture website visitor data for remarketing campaigns.
- Build an organic ranking: Search engine optimization and local search tactics make websites easier to find online.
Of course, small businesses don’t always have this kind of technical expertise in-house. That’s why the pandemic is also a crucial time to invest in human capital.
#2: Invest in Knowledge and Talent
Humans create a nearly unimaginable amount of online data every day. As a result, digital marketers need increasingly sophisticated tools to parse and leverage that data to benefit our clients. Machine learning will expand our capabilities even further in the coming years. However, governments worldwide may choose to enforce new regulatory oversight on an industry that has previously operated with a great deal of freedom.
To succeed in this environment, businesses must build a team of smart people that can react dynamically to rapidly changing conditions. That’s why leaders should work now to identify knowledge gaps and develop a plan to fill those gaps effectively.
#3: Take Advantage of Opportunities
The available data points to sales and growth once the pandemic ends. One of the benefits of planning during a downturn is that the assets needed to leverage future growth — like leases and labor — are now less expensive. Businesses should be on the lookout for strategic opportunities that will position them to come out of the gates running once demand returns.
Once the Pandemic Ends, Growth Will Follow
The pandemic has been a very stressful time for many, many people. But with vaccines finally being distributed, we can begin envisioning a life free from the constraints of COVID-19. Despite all the challenges we’ve experienced over the last year, the LP team is optimistic about what’s to come.
Certain sectors of the economy have proven to be resilient to this particular challenge. Moreover, unprecedented growth in online holiday shopping indicates strong demand once we return to health and safety. Businesses looking for a path forward should plan for growth, take advantage of opportunities when they arise and ensure they have the human and technical infrastructure necessary to succeed in an environment of explosive online demand.