Detecting Trends: What’s Happening to eCommerce Activity?

We understand that every current event and situation seems to be analyzed through the lens of the COVID-19 pandemic. And that we hear so much about it that there are times when we reach peak-pandemic reading. Yet it’s the central lens of analysis because everything that we currently do is as a result of, or is modified by, coronavirus.

With that being said, let’s push forward in order to capture exactly what has been going on with ecommerce, and tease out the trends that we’ve been witnessing in the last few weeks — which seem to have lasted half a lifetime!

The branding company WITHIN has been monitoring trends that have been emerging during this era of coronavirus and lockdown. They’ve asked their clients for samples of data to crunch and visualize their findings. By tracking year-to-year trends from a collection of data points, such as ecommerce revenue, conversion rate, and ad expenditure. And there are some intriguing trends that have occurred.

Lost luxury

It’s been a poor time for expensive brands. For companies dealing in luxurious goods, the pandemic has meant a consistent loss of revenue before finally getting its head above water after the 9th of April, hitting a peak on the 16th of April, with a 100% increase in revenue year-on-year. Yet for almost the entirety of March, luxury brands made only losses.

Since hitting its peak in mid-April, revenues have stabilized for the moment at around 50%. Another trend for these brands worth noting is that since February, their expenditure on Facebook and Google ads essentially flatlined until 15th of April, when injections into ads correlated with boosts in revenue.

Unsettled fashion

Similar trend lines can be seen for fashion brands, who have experienced quite a rocky road over the last few months, occasionally lifting their heads above 0% revenue growth year-on-year, yet largely remaining underwater and carrying losses. But things appear to be moving in the right direction — albeit slowly.

In terms of ad spend, since mid-April fashion brands have focused much of their attention on Facebook, with spikes of expenditure of April 19th (up 97% year-on-year) and April 26th (up 157%). Google ad expenses have consistently remained below last year’s level during the entire COVID-19 quarantine.

Interestingly, there was a spike in big fashion purchases in terms of ecommerce, from the 12th of April to the 21st of April (that is, with an average purchase order between $200-400). On the 15th this hit a spike of 84% AOV when compared to last year.

A time for essentials

In direct contrast to the fashion and luxury brands, companies that sell essentials saw huge movements upwards regarding revenue, and spent much more on advertising across channels.

After the 5th of March, revenues rapidly began to climb to heights of 200% and 270% increases year-on-year. And since the 28th of March revenue hasn’t reached below increases of 200%.

This coincided with a campaign of consistent ad expenditure mostly on Google but also on Facebook. Ad expenditures on Google reached the heady heights of a 490% increase at the end of March from the previous year, and has rarely dipped below 200%. Expenses on Facebook advertising has also remained consistent at around the level of a 100% increase year-on-year.

Suppressed social media CPM

And finally, rates in social media CPM have remained way below their last year prices, due to fewer people trying to bid for their ads, which means people either stopped their ads or reduced how much they would pay for them. Yet with these trends moving gradually upwards, we may be witnessing the return to pre-crisis prices (now that sounds like a tongue twister!).

Finding meaning

Perhaps there are some psychological factors at play here, too. Luxury brands were losing money during the start of the pandemic, before moving out of the red during the last month. It could be that the initial anxieties and adjustments to a new way of living, which led to people focussing on buying the essentials, has now subsided partly, and customers are ready to buy pricier, non-essentials once again.

Also, and more concretely observable, is that the IRS began rolling out economic aid packages in mid-April, and has since sent out approximately 130 million payments equaling roughly $200 billion. With more money in their pockets, and a slightly stronger sense of economic stability, perhaps we are witnessing the first movements towards a return to our former ways of ecommerce. Perhaps.

PS: UV is one of the world’s leading Salesforce Commerce Cloud (Demandware) integrators. Contact us to see how we can work together.