Content Strategy Industry Insights
March 10, 2020 – It seems that everywhere you look these days, there is only one topic dominating the conversion – Coronavirus. As we try to glance beyond the panicked hysteria dominating the news cycles, we wanted to take a closer, data-driven look at online browsing and shopping behavior which may tell another part of the Covid-19 story. More specifically, since we work with content marketing teams in APAC as well as the US, we wanted to see how consumer behavior in APAC was affected as it can help shed some light on what’s to come in the US.
In addition to the immediate impact we are seeing on many corporations and individuals, setting stricts limits on international travel, events and disrupting global supply chains, this black swan also carries a dramatic impact on consumer behavior. With more people entering self-imposed quarantine and limited travels and events, more interactions and transactions are moving online. In the following post we wanted to share some of the indicators of trends we’ve already started to witness in users’ online behavior. Despite the fact it is too early to draw any conclusions (it may feel like Coronavirus has been with us for several years but it’s only been 2 months) some big changes are starting to take shape.
A clear impact on E-commerce
As hundreds of thousands of people enter self-isolation, we are seeing a surge in online and especially ecommerce activity. On some ecommerce sites in APAC we are seeing a 20-35% increase of sales in the past couple of weeks compared to the same period last year. This increase is coming despite reports of disruptions in the supply chains, especially from China.
Shifts not only in scope but also in types of goods sold online
With coronavirus cases increasing in the U.S., some shortages have already become apparent. For example, many pharmacies across the world are sold out of hand sanitizers. This prompts shoppers to search online for the products, again changing the shopping behavior of some customers who have never bought these types of products online. One of the key indicators that marketers constantly seek are “behavior-changing events” in one’s life. This outbreak has the potential to change the buying habits of hundreds of millions of people worldwide. People who were reluctant in the past to order food online may now start seeing its benefits. The companies that will thrive in this new environment are the ones who can rapidly adapt.
In 2020, e-commerce is expected to represent 12% of total retail sales, however, a change in consumer behavior in the first quarter of this year due to the coronavirus can impact the future quarters for 2020 and have a profound impact on holiday sales. As the consumer’s comfort with online shopping improves and technology is becoming more intuitive and ubiquitous, the digital side of the retail business may grow faster than previous projections.
Advertising and Media
Impact on OTT – Will this near-term surge stick?
Not surprisingly, we are also seeing an uplift in subscriptions to OTT services. Michael Olson, analyst of Piper Sandler released results of its quarterly “Netflix Navigator,” a tool which uses Google Search Trends to find connections between consumer interest and estimated subscriber growth (link).
Olson’s research found an increasing trend during the first two months of the quarter, which shows that Wall Street may be seriously underestimating the number of consumers signing up for Netflix. The data suggests that Netflix subscribers in the U.S. & Canada will grow 3.8% year over year, more than double analysts’ consensus estimates, which project growth of 1.6%. The big question remains is whether when the masks will eventually come off, people will revert to their old habits.
Impact on Ad Spends
Dentsu Aegis Network (DAN) surveyed clients in China over the past week, collating the answers of 155 clients and client leaders, to get a more nuanced understanding of how businesses are responding in the short-term.
Cutting short-term marketing spend, diverting offline to online
Some 47% of businesses said their sales had already significantly or severely impacted by the outbreak of coronavirus but at this stage, only 7% said they had stopped spending on advertising completely.
The geographic focus of activity has been an early shift for businesses, with 22% saying they had already changed creative and regional focus due to the virus. Likewise, with people spending more time at home, brands have responded by shifting spend from offline media to online, with 14% saying they were moving budget from offline media.
Overall, most strategy shifts are for the short-term, according to the research, with 61% making changes for the near-term and just 9% making amends to longer-term plans.
Cheuk Chiang, chief executive for greater north Asia at DAN, explains that the first concern for brands should be around reputation and helping customers through the virus:
“Firstly we cannot forget that this situation is first a humanitarian issue. In this context, brands must be sensitive and responsive to avoid reputational damage. Content should reflect the changing times and consumer sentiment. Brands that take a utility approach to the promotion will better connect. From a media investment perspective, we’re re-evaluating out of home placements and will increase investment in digital channels especially short video and social platforms with a focus on driving to ecommerce,” he explains.
What Next – How can marketers adapt to this new reality?
With more people spending more time indoors and limiting their travels, despite the apparent challenges Covid-19 is posing to businesses all over the world, it also opens up new opportunities for engagement. Here are some areas which could help companies adapt to the short and longer term changes:
With many people confined at home under quarantine, online content consumption is now on a rapid rise. According to one report, 574 accounts on video platforms Douyin and Kuaishou have gained up to 500k new followers respectively between January 20 and February 2.
Tap into this by creating educational content, videos and quality posts that will help nurture your relationship with your target audience. Heck, we’ve been postponing the release of our new newsletter for months. Only thanks to travel and event cancellations, we’re finally getting around to paying off that long overdue marketing debt…
Specific industries such as the health and fitness industry can create relevant content to engage customers. Videos on simple exercises indoor or make healthy meals at home to help them combat virus.
2. Offer Support rather than Hard Sell
Stand out from the competition with timely updates to your customers. Keeping your customers informed is crucial especially if your business is currently facing high demand for certain products or logistical delays.
By keeping your customers updated on estimated delivery times, and expected delays, you can reduce frustration levels and prevent them from looking elsewhere. (see more on this here).
3. Pay off your Technological/Infrastructural Debts
Especially during such times of limited offline activities (events, travels, etc.), you can tend to repaying the online technological debts you’ve been incurring. In the short term most companies will probably be holding off major capital investments until the situation clears. However, this could also be a great opportunity to get ahead of the competition. Prioritize implementing better, more connected data, sales and marketing infrastructures and strengthening the connection with your audiences.
And most importantly these days, Keep Calm and Stay Healthy – Summer is coming 🙂
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