How eCommerce behaviors changed after UK and USA got used to the lockdown
I’m looking at Consumer Electronics, Groceries, Beverages, and Home and Garden in the United Kingdom and the USA. Let's see what other markets can learn from it. Data provided by SimilarWeb.
Summary: Groceries saw the biggest increase in traffic worldwide grown by 40% between January and March, home and garden were next with 35%, followed by electronics 16%, and beverages at 9%.
Over the last three months, around a quarter of the world’s population has gone into lockdown as a result of COVID-19. In many affected areas, governments have instructed their citizens to work from home wherever it is possible to do so. The result has been a rise in the demand for homework equipment, as people try to replicate their office space at home. The question moving forward is whether this will lead to a more permanent shift towards remote working, will offices become more accommodating and even encouraging towards their employees working from home, and what effect this will have on eCommerce players within this space. We don’t know whether certain consumer behaviors will permanently be changed as a result of COVID-19, and this is clearly one of those areas which could see long-lasting changes.
Some of the most popular keywords related to homework equipment that people have been searching for over the last few months include webcams, PC monitors, and laptop stands. People want to replicate the feeling of a face to face meeting as much as they possibly can so it’s unsurprising to see that this is an especially popular item.
To try and capture as much of this traffic as possible we’re seeing an increased number of companies creating dedicated homeworking sections on their website and producing the increased amount of content around specific products. For example, Curry’s PC World has created on its website a section with specific blog posts and articles around recommendations and help and advice around working from home. Companies largely do this to increase their ranking or Google for this kind of popular keywords, which help drive organic traffic to their website from consumers with intent.
With the sudden and sharp increase in the demand for working from home equipment, the traditional market leaders have been struggling to keep up and match supply with demand.
This impact is seen in multiple countries, which indicates a global shift in consumer behavior, and as a result, people are searching beyond the usual plays they would normally go to. They go beyond the first page in Google when they’re searching for the equipment that they need and because of this, there’s a lot of growth in niche players within this space, who previously would not have been competing for this kind of customer base.
In the graph above, there are four examples of players and their growth in traffic over the last three months within the UK. The message is clear, if you already have customers that fall in this space, you can expect to see more payments being made and more parcels being shipped and if you don’t, this is a good pool of customers to be targeting with your products and services right now.
The graph above shows the demand for specialist equipment. Gaming has gone down while more general consumer electronics relating to homework equipment have increased.
These companies would not normally be competing for this kind of customer base. The crisis has opened up a new and potentially very lucrative revenue stream.
Specialized consumer electronics companies should be making similar moves as home equipment shops. It’s likely these types of companies don’t rank as high on Google as the big players. So to help increase their visibility on Google and win more traffic, a good strategy here would be to run paid search advertising against some of the most popular keywords. The crisis presented golden opportunities for these pure players to become more top of mind when people are searching for consumer electronics equipment, regardless of whether it’s related to home working or not
Pat Later is gaining momentun
The suddenness and severity of restrictions put in place caught a lot of people off guard. A lot of this work in-home equipment purchases wasn’t planned or budgeted for and what’s more, this is not cheap equipment. Buying a PC monitor and a laptop, for example, could easily set you back several hundred dollars and I can’t imagine many people having a lockdown emergency fund to fall back on.
So, naturally, there’s been an increase in demand for buy now pay later options, which benefited two big players in that space: Klarna and Afterpay. Both Klarna and Afterpay offer the ability to spread the cost of your purchases into interest-free installments, which is a great option for those big-ticket items such as laptops and PC monitors. Offering some sort of buy now pay later option is a great way of encouraging consumers to buy big-ticket items on the website.
The traditional market leaders are struggling to keep up with the increasing demand for work in-home equipment. Because of this, we’re seeing a lot of growth in the niche pure players within this space, who previously would not have been competing for this kind of customer base and with a lot of these purchases being both expensive and unplanned, consumers are turning to buy now pay later options as they look to spread the cost of these expenditures and make them more manageable.
Since the recommendations around social distancing and self-isolation, and ultimately lockdowns came into effect, there has been an explosion in the demand for online grocery shopping. UK online grocery players have grown from 87% even up to 232%
In the UK, the big players are trying to adapt to the surge in demand by reducing any customer acquisition.
Clients in the UK for weeks in most cases failed miserably to secure delivery or click and collect reservations to one of the big supermarket chains as demand for online grocery shopping increased. It’s truly a vicious cycle. You want to be the social distancing regulations, but you can’t get an online delivery slot because everyone else is thinking exactly the same thing.
To help cope with increased demand, big supermarket chains in the UK were trying to reduce their customer acquisition by effectively turning off their paid acquisition. Big players in the market struggling to cope with the increased demand more and more consumers are turning to niche grocery providers for their shopping.
As a result, customers are turning to niche players…
In the graph above there are four examples of niche grocery providers in the UK. It’s easy to spot the point in which the UK went into full lockdown, traffic to these websites soared as consumers were forced to look beyond the big supermarkets, bigbarn.co.uk saw their website traffic growth by staggering 550 percent between January and March.
The small players can’t cope anymore anyway…
However, the demand for online shopping has become so great that even these companies are now struggling to handle the incoming traffic to their website. The average amount of a type of time a user time spent on site has decreased by 66% in March, which could be caused due to the lack of availability of delivery slots. It’s clear that a lot of these companies will be receiving more orders than ever, and will need the support of additional delivery service to help them cope with the increased demand. Many of these companies sell products that require specific requirements such as efficient refrigeration, and as such, they’ll need to work with a delivery partner that can cater to the specific requirements.
More and more Websites started using traffic-queueing tools to handle the heat.
Traffic to eCommerce beverage sites have increased by 36% in the UK, and 13% in the US January to March.
Searches for wine delivery in the UK skyrocketed by 1,500% between February March as people look to stock up on their favorite bottles of red and white.
Beverage sellers see crazy demand rise, but they can’t fulfill it.
Alcohol delivery wasn’t allowed everywhere in the USA, but because of lockdown, a number of states are temporarily relaxing their laws around that. According to Market Watch, online alcohol sales are up by 243% in March with liquor and spirits sales up by 75% and wine sales up by 66%.
Home Partying is a thing again, kind of.
Zoom wouldn’t share specific figures on how many users it’s added recently, only saying that growth has been “exponential”. Now the most-downloaded app across iOS and Android, Zoom was ranked 298th in the US for iOS at the beginning of March, according to SensorTower. The company’s stock price has doubled — even though some foolish investors have accidentally been chucking their cash at a Chinese company with a similar name. The Houseparty group games app leaped to the top of charts in the US and UK with more than two million downloads, up from 13,000 the week before; its download figures over the weekend were 1,685 per cent higher than the year before, according to Apptopia. I’m not sure if I should be impressed or slightly worried by those stats.
It’s crazy how Zoom.us traffic on a Saturday has gone from being virtually nonexistent to seeing exponential growth as people arranged catch up with their friends and family.
Although pubs, bars, and restaurants have closed as a result of the lockdown, people’s appetite for social catch ups with their friends and family has not been dampened. Instead, people are moving their gatherings online with a huge increase in the number of virtual meetings booked for drinking events. As a result, ecommerce beverage companies are seeing big increases in demand for their services and need to be in a position to capitalize on this, such as offering faster and more regular delivery slots.
HOME AND GARDEN
We are spending more and more time and money on garden and home improvements.
As people are forced to stay indoors, they are running out of excuses not to tackle that nagging list of DIY jobs they’ve been putting off for months, and on top of that, they are now unable to call professional. The bedroom won’t paint itself, shelf won’t fix itself either.
Virtual Room Painting
A number of sites such as Sherwin Williams and Glidden have produced a series of guides and blogs that help people with inspiration for home improvement. They have a series of customer experience tools that help you visualize the products and how they look in the home. In normal circumstances, you would expect people to go to a hardware store, buy a sample of paint, and test it on their own walls. These online tools help us replicate the in-store experience that we’re so used to and currently unable to access.
To sum up. We have seen significant shifts in consumer demand due to a dramatic change in lifestyle over the past 3 months. Consumers are also turning to specialist and pure-play retailers. eCommerce businesses across the board need support in a number of different areas to both handle and capitalize on the exceptional demand. The COVID-19 crisis is likely to cause a number of permanent shifts in consumer behavior. We live in interesting times indeed…