The coronavirus outbreak has shifted the online competitive landscape

Discussion
Source: macys.com
Mar 27, 2020
Matthew Stern

Many retailers and brands have begun to ramp up e-commerce promotions, frequently with big discounts, in efforts to connect with customers and drive sales during a time of unprecedented uncertainty. With customers just as unconfident about their futures as retailers, however, it’s not a sure thing that they will spend, regardless of how good the deals are.

Macy’s, Vineyard Vines, American Eagle, Nike and Sephora are a few of the brands and retailers trying to boost online sales, CNBC reports. 

American Eagle, Nike and Vineyard Vines are discounting on some or all products purchased online, with deals ranging from 25 percent to 60 percent off regular prices. Macy’s is extending its free shipping on orders greater than $25 to non-loyalty members. Sephora is offering an extended return policy both for online purchases and ones made in-store before the shutdown.

Even businesses that are not primarily retailers, such as SoulCycle, are trying to move product online. The fitness studio chain is offering 75 percent discounts on some of its athletic wear on its site.

For retailers offering discounted products online, being able to get orders into the hands of customers in a timely fashion could be a key differentiator.

Amazon.com, often the go-to choice for e-commerce shoppers in all categories, has been so inundated with orders for essentials like food, household cleaning products and medical supplies that its fulfillment times for other products have begun to lag significantly.

Even Amazon Prime members can expect to wait up to a month to receive orders of non-essential items at this point as the e-tail giant prioritizes the shipment of necessities, according to a CNN report.

Those retailers poised to pick up the online sales Amazon may be losing, however, might want to be careful about taking a hard-sell approach. Since the onset of the coronavirus pandemic, some retailers have struggled to strike the right tone with their advertising. Over-promoting in a frightening situation can scan as opportunistic.

DISCUSSION QUESTIONS: What can retailers do to differentiate themselves online at a time when so many are trying to make up for lost brick-and-mortar transactions? Is discounting a must for retailers operating in currently non-essential categories?

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Braintrust
"The best approach for ANY company during these times is simple: Do good works for your community."
"Special programs to show community involvement and charitable support — and just plain being human can go a long way."
"...it will be difficult if not impossible to make up for in-store transactions because of what people are buying."

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20 Comments on "The coronavirus outbreak has shifted the online competitive landscape"


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Art Suriano
BrainTrust

The best approach for retailers attempting to attract customers online during this time is to be smart and creative. Humor can be a great approach because putting a smile on someone’s face may make them a bit more interested in reading the ad and, if it’s a reasonable offer, make a purchase. The most challenging element everyone is dealing with about the coronavirus is fear and when people are afraid, they’re not going to be interested in shopping. So any attempt to attract customers must be one that uses creativity, humor, and strategies that will stand out as being different. Most importantly, it needs to be something that will help take their minds off the virus, even if it’s only for a few seconds.

Georganne Bender
BrainTrust

I have seen hard-sell emails from consultants pushing for retailers to buy their programs: “YOU CAN’T AFFORD NOT TO…” and “Yes, you need this RIGHT NOW!” but I have yet to see a retailer pull the same tactics.

For some retailers selling online is old hat, for others it’s new since their stores have closed. Both are rallying, big stores with attractive sales and longer, more generous return policies. Indies have taken to Facebook and Instagram, posting accessorized outfits, packages, kits and gift boxes. They are hosting Facebook Live watch parties, Zoom cocktail parties, crafting sessions and fashion shows. Their resilience and creativity is inspiring.

Will consumers respond? I like to shop and I love a deal, but currently my focus is on food and necessities. 50 percent off the entire store doesn’t sound as good when you are sheltering at home.

Gene Detroyer
BrainTrust

I wish there were a “sad” face we could use. Your opening paragraph describes people who have a mindset that is just SAD! These people are supposed to be professionals.

Mark Ryski
BrainTrust

Having robust online capabilities is a significant advantage during this crisis. However, it will be difficult if not impossible to make up for in-store transactions because of what people are buying. I work with a major retailer that sells essential and discretionary goods. This retailer’s essential sales are through the roof, but the president of the company told me that he has never seen a drop in sales of discretionary items like this. As he said, “you have to sell a lot of toilet paper to make up for one TV.”

Paula Rosenblum
BrainTrust

The best approach for ANY company during these times is simple: Do good works for your community.

Neil Saunders
BrainTrust

We track discounting on a regular basis and over the last year there has been an enormous rise in the number of apparel products on promotion with a significant rise in the average depth of discount applied. It’s hardly surprising; all retailers are looking to stimulate sales and clear down inventory. They are doing whatever they can to keep their businesses moving and discounting is one of the easiest things to help with this.

That said, if everyone is discounting it becomes a blunt weapon. Good retailers will be telling stories, creating engaging content and pushing products in a way that resonates with consumers and their present circumstances. They will also be doing good things that help out during this difficult time. All of this can be hard, but authenticity and genuine connection become increasingly meaningful at this time.

David Naumann
BrainTrust
David Naumann
Vice President, Retail Marketing, enVista
2 months 2 days ago

Offering discounts, free shipping, and fast delivery times for online orders are definitely smart strategies for retailers during the COVID-19 pandemic. In addition, for lifestyle retailers and image retailers like sporting goods or fashion/cosmetics, engaging with customers with tips on how to deal with isolation are great ways to increase loyalty. For example tips on how to stay active or feel good about yourself can go a long way in terms of building relationships with customers.

Kai Clarke
BrainTrust

Cost and speed while keeping products in-stock are critical for retailers to compete online with non-essential products. Retailers must align themselves and adapt to the new requirements of the COVID-19-era online environment to survive this difficult time.

Bob Phibbs
BrainTrust

Demand is gone. Serve now to sell later. Keep in front of your customer on social and with email — but the reason they aren’t buying a KitchenAid mixer isn’t because they’re waiting for a coupon.

Cathy Hotka
BrainTrust

I’m with Paula. The retailers getting the most attention these days are pure-plays, or retailers doing good for the community. Ultimately, though, I’m afraid that the U.S. government’s Lord-of-the-Flies approach toward hospitals will dampen consumer confidence and prolong the recession we’re probably in.

Gene Detroyer
BrainTrust

Those retailers who have an online connection with their customers are in a good position. Those who have ignored it in the past are absolutely behind the 8-ball.

My recommendation is to stay in touch with your customers. Remind them that they can find the very same products that they enjoyed finding in the store, now online.

While the stores are over-inventoried and there are huge discounts to clear out the merchandise is the retail mindset, it isn’t any more necessary than it was for daily business. (Huge discounts do nothing but set the bar lower for what a customer will pay.)

This is a great opportunity for retailers to solidify a personal relationship with their loyal customers.

Jeff Sward
BrainTrust

Retailers of essential products have to be great managers and communicators of inventory positions. Offer transparency on out-of-stock situations and replenishment timelines. Manage of panic buying. Be truthful and reliable on what they can and can’t do. Retailers of non-essential products have a whole different set of problems.

E-commerce can’t possibly make up for lost brick-and-mortar sales. The sales and margin hit they will experience will be on a scale never seen before. So to me it’s more about managing for survival rather than differentiation. I saw one company say it quite succinctly yesterday. They are managing for the health and welfare of their people, their liquidity and future health of the business, and the integrity of their brands. And those three aspects of the business are often in conflict with one another in this moment. I loved the recognition of the incredibly difficult balancing act that is in motion here.

Rich Kizer
BrainTrust

“…it’s not a sure thing that they will spend, regardless of how good the deals are.” TRUE. In the market today, retailers must diverge from the old playbook. One retailer we work with has taken her social media efforts to a new and effective level. In her video promotion she shows new products; she is excited and and having fun! It is a light-hearted and fun video which features three to five products that are “new” or useful. She then closes with an offering of curb service including the time they will “be looking for you!” It’s working. It’s still not the “good old days”, but it is working. I would say this is definitely time to think out of the box like never before.

1

Ananda Chakravarty
BrainTrust

The acquisition power of discounting is always there, but retailers will be hard-pressed to retain customers. Better than discounting is for retailers to engage in good marketing to build awareness and let customers come to them organically during the crisis. Being opportunistic can quickly become a negative in this timeframe. Special programs to show community involvement and charitable support — and just plain being human can go a long way. Where discounting does matter is where online sales are new or limited and to some extent the only way to sell at all for some retailers. Guerrilla marketing like a startup will be essential for those just converting into temporary pure-plays.

Ralph Jacobson
BrainTrust

One of the keys to lasting success for retailers is to find compelling reasons for customers to come back. One-time discounts aren’t typically enough. What other perks/services can you offer to shoppers you assign value? That will vary by retailer and location, most likely.

Lisa Goller
BrainTrust

The surge in online retails shows it’s time for companies to invest in digital resources to boost efficiency, agility and collaboration. Beyond e-commerce promotions, deep discounts and free shipping, supply chain partners need to work together with integrated online systems for fast fulfillment, especially of essentials like food and cleaning products.

Communicating with consumers is also vital. Tactics that worked well when China was under siege included livestream video campaigns, using celebrity influencers to share encouraging messages to consumers and inviting customers to join private social media groups to stay connected and engaged.

Sterling Hawkins
BrainTrust

Now is a time of community and support; not hard sells and countless promotions. People will look to retailers that are authentic and are also taking care of their teams at the same time. There’s plenty of room for different tones within that (levity, partnership, etc.), but the most effective will be those that build (or grow) relationships vs. just a quick sale.

Bringoz_GM
Guest

The real unsung heroes and the silver lining in this unfortunate situation have really been the employees that are keeping our supply chain and home delivery operations going. I’ve seen within my customer base, 10x more delivery demand and the same team that is working days and nights to get consumers what they need. Well beyond a paycheck, they now have a mission and a purpose. Amazing to see it. I’m happy we were able to contribute as well and make their life a little easier.

Cynthia Holcomb
BrainTrust

In this time of Covid-19, every retailer has many stories of employees sacrificing themselves to care for their customers. Stories of humanity, retailers can and should share with their customers, honoring the risk employees face every day during the virus on behalf of their customers.

James Tenser
BrainTrust

Deep online deals smell of desperation, not consumer value. Retailers who are going way low may pick up a few sales, but to the lasting detriment of their price image.

Face it: The hoarders and pantry loaders have invested most of their discretionary funds in TP and chicken noodle soup. The out of work aren’t buying anything non-essential at any price. Folks who still have mad money to burn don’t need discounts to afford things they want.

The reason you can’t sell a lot of earrings or high heels right now is because people don’t see them as compelling needs of the moment. That will likely change later, as consumers engage in what Nikki Baird called “revenge shopping” near the end of our recent BrainTrust LIVE! discussion.

wpDiscuz
Braintrust
"The best approach for ANY company during these times is simple: Do good works for your community."
"Special programs to show community involvement and charitable support — and just plain being human can go a long way."
"...it will be difficult if not impossible to make up for in-store transactions because of what people are buying."

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