As the coronavirus upends consumer behavior, it presents a double-edged sword for Shopify, which powers the e-commerce sites of more than 1 million merchants. As more shopping takes place online while stores are closed, the digitally-native companies that run on Shopify could be well positioned to capture a large portion of this spending. But first, Shopify needs to make sure that these e-commerce companies, many of whom also have stores, survive the enormous hit to their offline sales.
Poshmark CEO Manish Chandra said Posh Stories, its version of the short video format, is expected to replicate the success that social shopping has achieved in markets like China.
As retailers prepare to reopen their stores in select states, many of them are offering curbside pick-up services for the first time in order to cater to shoppers who are hesitant about entering stores. While curbside pickup has some of the same appeal as buy online pickup in-store, it's a bit more logistically complicated to pull off.
With many businesses closed, CPG brands are seeming sales plummet. Indeed, Coke just reported that it saw a 25% sales volume drop earlier this month. As a result, many bigger brands are likely trying to rethink their digital strategies -- and are looking to adopt more direct-to-consumer programs.
Amazon's decision in March to temporarily stop accepting shipments of non-essential goods to its warehouses left many sellers in limbo. That presents a new opportunity for other marketplaces like eBay, Walmart, Target and Google to woo over dissatisfied sellers. Earlier this week, Google announced that it would be now making it free for merchants to sell their products on Google Shopping. Previously, merchants were charged on a cost-per-click basis.
Growing coalitions between brands via community and content is one bet for them to survive. During the pandemic, they're "banding together to weather the storm."
All grocery stores are seeing a huge surge in sales right now. But for small and independent grocery store chains, who have struggled to remain competitive against increased investments in grocery by Walmart and Amazon, the chance to get their stores in front of new customers is proving to be an especially important lifeline. Mercato, a grocery delivery platform that focuses on small grocers and speciality food stores, said that it has seen a 5,000% spike in orders over the past month, and has been signing up anywhere from 30 to 50 new grocery stores for its platform each day. As such, that provides an opportunity for smaller grocery stores to win over shoppers who previously flocked to big-box chains, if they can provide a better experience for first-time shoppers.
Some online brands are seeing sales spike, others are plummeting. They are all dealing with myriad other issues putting pressure on the overall business. Some startups are trying out new digital campaigns to try and account for the vast behavior shifts -- all while staying cognizant of the bizarre times we're all in. It's a difficult tightrope to walk, but showcases brand new marketing terrain.
Right now, many brands and retailers are shying away from experimenting with new marketing channels, desperate to cut costs wherever possible while sales are down. But Levi's decided to move forward this month with a pre-planned test of running shoppable ads on TikTok, as it sees the platform as being an increasingly valuable way to connect with customers now, when many people are stuck inside and glued to apps like TikTok.
As more people experience financial difficulties and become in need of interest-free finances, alternative e-commerce payment methods are seeing bigger interest than ever in America.
For retailers, running heavy promotions during store shutdowns is proving to be tricky. Due to the coronavirus outbreak, large retailers like Macy’s and Nordstrom, along with chains like the Gap, are aggressively pushing seasonal sales to make room for spring merchandise. With virtually all brick and mortar sales down, anywhere from up to 80% to 100% of expected revenue effectively disappearing for large brands, offering discounts is one of the most effective ways to stay afloat right now, said senior retail analyst at Fit Small Business Meaghan Brophy.
Before the coronavirus outbreak, Blue Apron was on life support. The meal kit company reported in February that it had 351,000 customers during the fourth quarter of 2019, down from more than a million at the height of its popularity, and has consistently failed to turn a profit in its nearly three years as a public company. CEO Linda Findley Kozlowski said the company was considering a menu of strategic options including a sale and raising additional capital. But in March, the company started seeing an unexpected uptick in demand, thanks to the coronavirus outbreak.
As the coronavirus outbreak drags on and more Americans do their shopping online, there's been a greater focus on the working conditions in warehouses, and whether or not companies are doing enough to protect their workers from contacting the coronavirus. Some Amazon workers at a fulfillment center in Staten Island yesterday staged a walkout, stating that they thought that Amazon should close the facility for two weeks as at least one worker there has tested positive for the coronavirus.
DTC brands and platforms are passing on revenue from e-commerce as losses from physical sales losses mount. Examples include luxury watch platform Hodinkee, sustainable container brand Corkcicle and clothing rental service Wardrobe, which are using their existing e-commerce backends to help the store locations they sell their products in. This month watch-focused platform Hodinkee opened up its e-commerce platform to allow physical retailers it normally promotes, but are currently shut down for business, as well as watch brands it carries.
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