How your e-commerce strategy should be in the fourth quarter, based on the impact of COVID-19 in the first half of 2020 and the projection for the quarter.
This year has been one of the most uncertain and volatile times for e-commerce. As companies try to recover from the initial effects of COVID-19, eCommerce advertisers must ask, “What’s next?”
While the signs point to a slow recovery in jobs and purchases in the fourth quarter, there is also the possibility that the US will strike again this year, as well as the economy in March and April. You will find. In addition, Prime Day has likely moved from the third to the fourth quarter, creating an unprecedented crossover with the Christmas period.
What does all this mean for your eCommerce advertising strategy? First, let’s take a look at how COVID-19 has shaped the industry so far this year and what changes we still expect.
Changes in the first half of 2020
In Pacvue’s second-quarter 2020 CPC report for the second quarter of 2020, Amazon sponsored brand and product ads dropped significantly in April and May. Since then, the average CPC has risen almost before COVID-19. In addition to the peak in March, exchange rates also showed a downward trend in the second quarter.
There were a number of reasons for the significant changes in e-commerce spending and consumer behavior.
The main reason advertisers are still concerned is the change in consumer behavior at the category level. Online sales of sports and outdoor activities, cooking, and especially groceries increased as closure and homework forced consumers to stay home to cook and exercise. Meanwhile, the tendency to work from home is a big hit in the apparel and beauty industry as fewer people spend on new clothes and cosmetics when they are not on the street.
Sending money and inventory issues was also a challenge for advertisers. The conversion rate was affected when consumers clicked on an ad to leave the item when they discovered it was unavailable or had a significant lead time.
E-commerce forecasts for the fourth quarter
Many new trends are expected to continue at the end of the year. This is especially true of online shopping, which really took off this year. Of those who have not made any online purchases yet, 41% say they want to do so in the next six months. However, with the initial loss of panic, there shouldn’t be as many shipping and inventory issues as we saw in the second quarter.
The largest card game expected for the rest of 2020 is Amazon Prime Day. The brands stayed on Prime Day at the start of the third quarter, coupled with a positive quarter, to meet their annual sales targets. If you lower Prime Day in the fourth quarter, your sales will almost drop in November and December. In addition, it can seriously affect the brands that can be used for promotion, given Amazon’s traditional requirement that the advertised price be the lowest price for a few consecutive days.
While Prime Day can have an impact on Cyber Monday and during the holiday season, it’s likely to be a major celebration for eCommerce. Since many retailers close on Thanksgiving Day and consumers are less motivated to shop in-store, the holiday weekend can be moved to Cyber Monday and continue through December. In fact, Barron expects an 80% increase in e-commerce spending during the 2020 holiday season compared to 2019.
While the change was a fact from day one, the future consequences of COVID-19 are the most uncertain and difficult to plan for change. Ecommerce advertisers must prepare their strategies for a sustainable economic recovery or some other complete block.
E-Commerce Advertising Strategies, Fourth Quarter
Despite these uncertainties, there are a number of strategies eCommerce advertisers can use to maximize sales in the third and fourth quarters. Here are some important considerations when preparing your advertising strategies for the remainder of 2020:
1. Invest where and when demand increases
Some brands think they should stick to their advertising budgets until the fourth quarter, while others think they should invest a lot now because the fourth quarter is very unpredictable. Rather invest when and where consumer demand increases; in short, invest now.
The Pacvue report found that the brand’s average daily spend in the second quarter was higher than in the fourth quarter of 2019. Spending increased 14% from the first quarter and by 23% from the first quarter, the second quarter of 2019.
If e-commerce continues to grow in months that are traditionally not as important as the fourth quarter, that is, March and April, brands should seize these opportunities. This is especially important if brand competitors are also active in the industry, as they risk falling behind and losing market share if they don’t change quickly in times of change.
2. Prefer votes in the third term
Without Prime Day in the third quarter, big brands can now invest in the relevance and sales of the entire catalog, not just their hero products or products offered on Prime Day. The importance of building takes time and brands now had to do it to be successful in the fourth quarter. This includes paid searches on Amazon and other markets, as well as display media campaigns, such as Amazon DSP, to reach new customers and loyal customers.
Advertisers need to be confident that they have well-paid, well-presented search strategies and that they don’t have to wait until the fourth quarter to learn how to optimize and maximize effectiveness, and that increasing campaign relevance scores aren’t increasing.
3.This is especially important for the fast-growing supermarket e-commerce sector.
The fastest growing online supermarkets are Walmart and Instacart, with Instacart growing to 25,000 stores serving 85% of US households. The remainder of 2020 is critical for brands to acquire Share of Voice and build a customer base in those markets. Supermarket advertising should follow an ‘always on’ strategy and promote products with the same complementary keywords.
For industries that are not growing, such as apparel, the third quarter is the time to look at defensive advertising strategies to maintain loyalty. Brands that spend less on advertising, instead of bidding on their brand name and focusing on their products, run the risk of competitors bidding on these terms and stealing customers. Brand-level campaigns, such as brand ads on Amazon, are a great way to enforce terms and conditions and get votes to vote. It allows you to promote secondary products and adapt to new consumer demands.
The second quarter saw a return on ad spend for sponsored brands for the first time, which was higher than the ROAS for sponsored product ads.
4.Prepare for a mega vacation online
For brands that negatively impacted sales in the first half of 2020, online vacations are more important than ever. This year should be the biggest online shopping season we’ve seen. Barron expects $ 51.1 billion in online sales for this period, compared to just $ 28.4 billion in 2019.
Clothing and beauty declined significantly during the onset of COVID-19, as most people were stuck at home and didn’t buy the items. These holidays should be used to get consumers to buy more goods than they would find useful in 2021. It can improve these lagging industries.
Expect Cyber Monday to be much bigger than ever for all industries. Companies that did not issue shares in March and April should plan ahead to make sure they have enough shares. Online retailers can also achieve above-average returns as consumers who buy more clothes or gifts in-store buy more online.