Successful communication during the Corona crisis #6 - E-commerce strategies for companies and brands Düsseldorf, April 2020
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Successful communication
during the Corona crisis
#6
E-commerce strategies for
companies and brands
Düsseldorf, April 2020
1
The Corona crisis is massively changing the buying behaviour of consumers. For most industries, the tried and tested sales channels are breaking. E-commerce is booming. 22
Just as in stationary
trade, goods for
daily use are also
in great demand Google Search
on the Internet.
Face mask Toilet paper Disinfectant Groceries Corona
33 Source: Google Trends
TOP search terms on
Amazon change during
the lockdown
• Toilet paper, disinfectants and
mouthguards are still top keywords
• However, there is increasing demand
for activity items (puzzles, painting by
numbers, PSA, Nintendo) and
personal hygiene products (hair
clippers)
• There is also an increased demand for
home office equipment and digital
communication (headphones,
webcam, headset
44 Quelle: ARA Premium / Brand Analytics
In online grocery retail, traffic increases by 20-25%. 55 Source: similarweb.com
Due to rapid growth, demand cannot be fully met
due limited capacity.
• Rewe, Netto and Real show
traffic increases of 20-25% in
their shops, the Dutch startup
Picnic even speaks of a 50%
increase.
• The beverage supplier,
Flaschenpost is struggling with
increased order volume,
as is the drugstore dm, which
currently has a delivery time of
9-12 days.
• Picnic also delivers to
"systemically relevant" people
on Sundays.
66
Major marketplaces are also reacting.
Amazon prioritised goods for daily use in its warehouses. In this way,
the industry giant is trying to remain systemically relevant in order to
prevent a legal lockdown in logistics centres. This endangers product
visibility in search results not only for the short term but also the
medium term.
eBay, on the other hand, receives additional impetus for its
"Local Heroes" program and waives sales commissions up to and
including June 30th for local merchants who want to enter online
trading.
77
And some retailers are even reducing their advertising. Amazon is decreasing Google Search. Grocery retailers limit communicating their online offers. 88 Source: similarweb.com
Some industries
win, others lose. Demand has increased
due to panic buying,
PANIC BUYING which has led to an
unexpected shortage
of supply
Unexpected shifts in
demand between DEMAND
sectors and channels
Short and long-term
changes in
COMMUNICAITON communication
channels
99Even before the
crisis, Forecast Current Future
consumption • March 2020: • Retail closures cause • Consumer behaviour
in Germany 226,000 retail estimated losses of will develop towards
was trending in companies. around €1.15 billion
per day.
online trade in the
long-term.
favour of • Forecast until 2030:
e-commerce. Decline of • Result: insolvencies • Emergence of market
companies by and business closures. concentrations:
64,000, only large retailers
decline of sales • Except for grocery can cushion extreme
outlets by up to retail: higher demand fluctuations in
80,000. and multiplied consumption.
turnover due to
hoarding purchases. • The winners are so-
called, “generalists”:
• Closures of stationary In Germany, these are
shops inevitably result Amazon and Otto.
in online purchasing.
• Amazon continues to
develop as a market
leader.
10 Source: IFH Köln „Handelsszenario 2030“,
Handelsverband Deutschland HDE 03/2020, Statista und Amazon Sept. 2019Demand is shifting
in favor of
“generalists”. 0 2000 4000 6000 8000 10000
Amazon holds a 52 % 9.278,1
share of total online sales. 3.200
Amazon‘s customers 1.440,9
place an average of 41
orders per year. 878,5
809,1
757,3
601,1
554,7
524,5
488,5
E-commerce-sales in million Euro
11 Source: Statista and Amazon, status September 2019Familiar shopping channels and convenience are primary
success factors in online shopping
• FMCG brands with their own webshop do not necessarily
contribute to the increase in traffic, even during the
crisis. Consumers are loyal to online channels in retail.
• 84% of consumers are willing to leave their favourite
brand as soon as another provider offers them services
according to their individual preferences.*
• 49% of all product searches begin on Amazon.
12 Source: B2X Care Solutions GmbH, München: What the Future Holds for Customer Care in the Global Consumer
Electronics Industry Business: E-Commerce 2020: Sieben Trends im deutschen OnlinehandelE-commerce strategies for brands during the crisis.
Germany and Europe are 1. Acute phase 2. Recovery phase 3. New normal
currently still in the first phase, the Remain capable of Stabilization of the Reduce
acute outbreak. action business dependency
• Online dependence of • Return of traditional • Increased dependence
consumers purchasing channels on platforms like
2 Amazon
• The demand in some • Changes in the
categories is increasing competitive • Loss of control
(Essentials), while some environment
1 3 are decreasing (Luxury) • Predatory competition
• A focus on strong
• Decline in sales due to brands
lower stock
Ensure availability of goods Carry out Develop e-commerce
and logistics, e.g. dropship, market/competition strategy, strengthen brand
own warehousing, service analyses and repositioning building and online visibility
providers
13Short-term options
for brands.
Strong demand Others
• Adjust media investment and
• Shortening the path-to-purchase
targeting, e.g. via search, shopping,
• Adjust media investment and
Webshop targeting, e.g. via search, shopping,
affiliate
• Use additional marketplaces if
affiliate
necessary
• Competition analysis • Evaluate supply capacity and
• Customized keyword sets exploit opportunities
Marketplaces • Increase campaign budgets to • Close campaign monitoring
ensure visibility • Plan budgets for recovery phase
No E-Commerce No short-term scope for action
14 Quelle: Kantar China, WeChat survey, n=1093, Datenbasis 6.-9.02.2020Main risk for the expansion of online shopping is logistics.
Current developments show the limits of e-commerce and the dependence on functioning logistics processes.
Service levels decrease with increasing demand. Parcel delivery companies and infrastructure are overloaded.
There are potential solutions, but they cannot be implemented in the short term.
Dropship Fulfilment Service Partner Online-to-Offline (O2O)
Direct delivery to the Outsourcing logistics to Cooperation between
consumer and invoice the external service partners stationary and online
retailer shopping
Helpful for missing D2C
Can also be used for processes Applying interactions
marketplace strategies between off- and online
Connecting additional shopping
marketplaces possible
Example: shoes 24
15Chancen für Unternehmen im E-Commerce
Current trends Opportunities for companies Opportunities for companies
with e-commerce sales without e-commerce sales
• Older people and technology • Guaranteeing flawless fulfillment • Development of a sustainable
“laggards” adapt to online e-commerce strategy
shopping • Offering additional services
• Recognizing a variance of selling
• Improving long-term
• Switching to online offers potential
e-commerce strategy
• Advantages of online shopping • Coordination of channel
• Winning both, new as well as distribution
are unavoidable
existing customers
• Investment in e-commerce
channels
• Maintain independence from
large platforms
16We believe that this crisis will not create
anything new in the long-term.
But it will almost certainly accelerate the
developments that have already taken
place.
17The purchasing behaviour permanently changes due to prevention
measures.
Uncertainty about the new Coronavirus is deconstructing traditional shopping behaviour, as retail
researcher, Eva Stüber reviews the results of a study by the Cologne IFH Institute. "Older people in
particular are now becoming aware of online shopping, including groceries. That will remain.
People are adapting to this and noticed: It works."
hellofresh REWE online Flaschenpost.de getnow PicNic Bringmeister mytime.de
"The current "We are "Flaschenpost "We are "We are currently "Processing "The increased
demand is 60% experiencing a registers practically fully experiencing an time of four to demand may
above the level significant significantly booked - increase in six days is result in a longer
before the increase in higher sometimes seven demand of currently processing time"
crisis" order intensity in demand" days in advance" almost 50 standard"
online sh" percent"
18 Source: Desk Research, IFH Studie „Onlinehandel“In the future, the Increasing traffic and sales leads to tougher competition for
survival of brands visibility
will depend on a
strong e-commerce
focus more than
Growth Rate
ever.
Amazon
advertising
revenues were
already rising
by +70%
annually
before the
crisis
19 Source: https://www.netzoekonom.de/2018/06/22/600-millionen-euro-umsatz-mit-retail-media-in-
deutschland-erwartet/, BMO Capital Markets, E-Marketer 2018, Estimate 2018-2020It is extremely risky to become absolutely
dependent on platforms in your e-
commerce strategy.
At the same time, brand webshops are
becoming less relevant within the
consumer journey.
20Few brands can Webshop vs. Marketplace vs. Hybrid from the sales perspective.
afford to work
without a
marketplace
presence. strong
Startups Apple
„Uniqueness“ of the Product
Hybrid Webshop
Use of the
marketplace to
build brand
awareness
Trade Beck‘s
Marks Use of the
marketplace in the
consultation phase
Marketplace Hybrid and focus on
conversions
weak
weak Brand Loyalty strong
21Management
Summary The Corona crisis is massively changing consumer
buying behavior. Online trade is booming. Demand is
„ The goal must be to shifting stronger than ever before that favour
develop our own e- “generalists” in the retail sector. Some brands and
commerce strategies retailers are participating more, others less. Logistics is
in order to reduce the key success factor.
dependencies.“
Amazon and ebay are reacting differently to the
crisis. Particularly Amazon, who puts brands and
retailers under massive pressure to act in the short-
term.
This further increases the dependency on large
platforms. In the future, the survival of brands will
significantly depend on a strong e-commerce focus.
22Please stay healthy
and take good care of yourself.
23If you need support - no matter what topic -
you are always welcome to contact your
MediaCom team.
24You can also read
