While it feels like day-to-day life and the impact of the pandemic on society and the economy changes daily, there is one thing that has become obvious for both consumers and the brands and retailers from which they buy: a digital presence is not a “nice-to-have”, it’s necessary for survival.
“What’s the cost of being wrong about eCommerce? 20 years ago, nobody thought people would be buying CPG products on Amazon. But now Amazon is going to drive more than half the growth in the CPG world over the next five years and will only continue to accelerate because of Covid-19.” – Gautam Gupta, former CEO/founder of NatureBox and Partner, M13, during recent virtual Courageous Minds Only Chat.
Over the course of the last few weeks, we’ve watched as B&M businesses attempt to re-open and find some semblance of normalcy, but with half-capacity stores and squirmish shoppers, we’ve all begun to realize that 1) we may not ever go back to “normal” as we knew it just 16 weeks ago, and 2) consumer desire for the convenience and safety of eCommerce is here to stay.
“Buyers will expect more options in how they shop. Even when cities reopen, consumer sentiment and behavior will vary, with many still preferring curbside pickup and delivery. Businesses must continue catering to these expectations. As they do, they may find their business not only recovers but grows.” – David Rusenko, Square’s head of eCommerce
Companies that already operated within established e-commerce and/or DTC frameworks were able to respond quickly to the spike in demand that came with stay-at-home orders and quarantine (though that doesn’t mean there weren’t some hiccups along the way, i.e. inventory and supply chains), but many companies scrambled to build DTC websites and launch eCommerce shops and product offerings just to keep their virtual doors open and revenue coming in. While many business owners learned some lessons the hard way when their physical doors were open one day and closed the next – we all know now that this trend is only going to grow in popularity and that more thought and investment must go toward creating new solutions for consumers looking for better online and digital experiences.
“Site traffic to the 57 top U.S. marketplaces grew a combined 17% in May compared with May 2019 and 36% of retailers said they adjusted their marketplace strategy as a result of COVID-19.” – via Digital Commerce 360
There are a number of factors to consider as BigCo leaders navigate the Wild West of eCommerce and DTC. A few are listed below:
Understanding your consumer through a digital lens
It is fair to say that COVID-19 has impacted the habits and behaviors of consumers and has likely been the catalyst for a whole new set of pain points, needs, and desires. Coupled with a surge in interest in eCommerce and DTC, how a brand or retailer “defines” their consumer may have changed substantively. Being willing to re-define “who” a target consumer is will only allow brands and retailers to serve them better over time.
How might we get to know our consumer’s emerging needs, desires, and buying behaviors as a result of this “new normal”? >>>
Response time to surges in demand
Proper inventory management and a well-oiled supply chain are key to maintaining a strong presence in eCommerce and DTC. Not only does it assure brands and retailers have what consumers want when they want it, it also means they are ready to react when there are major surges in demand and that it won’t result in a major bottleneck for the brand, retailer, or the end consumer.
How might we optimize current inventory management systems and/or supply chains to ensure constant readiness? >>>
Redefining brand loyalty
When consumers have the luxury of an expanded consideration set online, brand loyalty could become a thing of the past. Many brands and retailers understand their consumers’ habits when they are shopping in-store, but a unique set of challenges arise for brands a consumer’s consideration set looks different on-screen than on a shelf.
How might we think dynamically about maintaining and growing brand loyalty in a digital space? >>>
Customer Experience
While eCommerce/DTC certainly offers a laundry list of conveniences compared to shopping in a B&M store, one thing that is missing is a traditional Customer Experience. It’s more difficult for questions to be answered on-demand and issues may have to be addressed post-purchase through a chatbot or phone call. Being known for having incredible customer service – even in a digital environment – can differentiate brands and retailers from competition.
How might we pivot approaches to in-person customer service to match the timelines and behaviors that occur in a digital space? >>>
Introducing new products and services, digitally
While some brands and retailers are currently cutting back on SKU’s in response to changing purchasing behaviors, most will eventually want to start introducing new products and services to meet evolving consumer needs again. Knowing that eCommerce and DTC is surging, putting a digital product launch strategy together now will only increase the likelihood of success for many brands and retailers – especially if it’s a space where they haven’t played before.
How might we reconsider new product launches in the digital space and assure our product stands out amongst benchmarks and competitors?>>>
eCommerce and DTC offers brands and retailers a host of new opportunities and expanded reach, but flexibility, agility, and speed will be the name of the game as we all continue to learn how to navigate the COVID and post-COVID world. Long-term plans are out the window as more agile ways of working are required to react quickly and strategically to remain competitive in industries that are more rapidly going digital.
