Amidst the coronavirus crisis, digital space is often seen as one of the few safe areas that are available to the general public. By following that logic, e-commerce, marketing and advertising (at least their digital versions) should keep doing fine, right?
Well, both YES and NO.
You see, the thing is that the global economy is tightly woven fabric and once you start removing threads, you'll seriously endanger its consistency and quality. The future that we're heading into is uncertain at very best so, here's a brief summary of what the situation is at the moment, as well as what we can expect in the past.
To start off with some news that is not so grim, the fact is that the majority of e-commerce businesses (at least those offering essential products) are experiencing an increase in sales. This is due to the fact that people can't leave their homes in order to make a purchase and now have to have these goods delivered to their doorstep.
Even some products that go under the non-essentials category are experiencing substantial growth. The thing is, however, that there are still some people who are trying to build a supply. This means that once they finish building their stock, things might make a sharp decline.
Another thing you need to understand is the fact that e-commerce seems to be moving in completely new, uncharted, areas like real estate. During one online campaign in China, where a 25 percent discount was offered on various apartment units, the company in question was able to sell as much as 7,000 units in just six days.
Sure, traditionally, real estate is seen as something that requires a direct approach, however, the discount on this platform was so substantial that a lot of people just decided to look past it. This is not just a major industry occurrence but also a landmark in the real estate industry.
One of the major problems that everyone has been aware of is the fact that retail sales are going down substantially. For instance, in China where there's been a complete lockdown, the retail sales have dropped by 20 percent.
Needless to say, this has substantially spiked unemployment but also introduced some changes that affect the world of e-commerce, as well. Namely, some businesses, that have never before offered a delivery feature, are now delivering their products in order to accommodate their clients.
In theory, the majority of digital marketing companies could do their job without ever meeting in person. So, there should be no problem with digital marketing companies, right?
Well, not necessarily. You see, the majority of companies assign anywhere between 10 and 50 percent of their average annual revenue as their marketing budget. So, what happens when their revenue starts going down? This 10 percent suddenly becomes a lot less, as well.
Once the spending of these clients starts reducing in size and volume, the income of digital marketing companies will go down, as well. Not to mention the fact that some of your smaller clients might close the shop for good.
The previous problem is definitely something worth thinking about, however, as the purchasing power of the population declines (even if it's by the slightest amount) the competitiveness will get harsher. Why?
Well, because two purchases can be placed with two different vendors but a single purchase is a whole different story.
Paradoxically, this means that those who intend to remain in the game need to increase their investment in marketing. This will be the most prominent in major business hubs like Sydney. This is why there might be a significantly increased interest in web design Sydney services by the time this is over.
According to the poll conducted about small business owners at the end of March 2020, even amidst the epidemic, the vast majority of people are spending on ads the same amount as before or just slightly less than before. Then again, there are those who have increased their spending in order to remain more competitive. This was especially prominent by the end of the month.
Needless to say, seeing as how the majority of businesses have taken their competitiveness into a digital area, it is to be expected.
The next thing you need to understand is the fact that a lot of businesses seem to invest heavily in humanitarian work. They're gifting supplies, offering free delivery and some educational institutions are even offering free courses to people all over the globe.
The latter is particularly important, seeing as how it could lead to an increased professionalization in a lot of industries, including digital marketing. The thing is that these courses tend to be invaluable and even though they weren't exactly expensive, a lot of people were reluctant to invest in them. Due to the fact that they are now also working from home, people have more time for such an adventure.
One of the things that are also worth mentioning is the fact that the perception of the public might have a huge impact on the business world. First of all, the panic spreading amongst both entrepreneurs and customers may shift the tide significantly either way.
According to one statistic, the majority of e-commerce business owners are not really concerned with the financial consequences of coronavirus on their business. In fact, even amongst those 36 percent that are expecting a downward spiral, as much as 32 percent don't expect this downgrade to be significant.
In this paragraph, we've mentioned the example of China more than once. This is mostly due to the fact that they are one of the few countries in the world that managed to work their way around the epidemics.
This is why we can use their example, their statistics and their trends as a sort of an unofficial projection of the economic future that we're heading towards. For instance, a surge in-app download is definitely going to happen in the Western hemisphere, as well, while global tourism is definitely going to suffer. Other than this, the e-commerce demand for vegetables and baking goods might also grow several times over.
Lastly, due to all sorts of travel restrictions, it is expected that the majority of companies will be restricted to their immediate surroundings. From the standpoint of marketing, this means an increased effort in local marketing projects.
Giving back to the community is also something you might want to consider, not just as a PR move but also as a way of helping out those in need. Moreover, the media consumption in a period of isolation is drastically higher, which might just be an opportunity that you were looking for.
At the end of the day, the impact of coronavirus on marketing, e-commerce and advertising is unavoidable, however, it has both its positive and negative sides.
The thing is that it has forced a number of businesses to embrace the e-commerce model and increase their marketing spending, which was inevitable either way. Sure, there's a rough patch ahead but how rough depends mostly on how well you adjust to the new set of circumstances.
Until next time, Be creative! - Pix'sTory made by Nick Brown