While businesses have been adapting to restrictions enforced on us by the Covid 19 pandemic, some traders, particularly those in a retail environment, have enjoyed a sudden and welcome upturn in online sales. Many businesses have been working on and establishing an eCommerce arm to their business model have seen sudden and profound volumes of sales flowing in, as consumers across the country turned to online shopping for even the very basic of provisions. Some businesses have processed 32 times the number of orders that they would have in an average month. Meanwhile revenue generated through many eCommerce websites has soared.
But is it all just temporary? The roadmap
for recovery has been put in place, the government faces calls to accelerate it
for the good of our economy, and we ask what
impact will this roadmap have on those businesses who profited during the
recent restrictions? In this article, we
look at what effect this new normal might have on online sales going forward.
Phase one of the roadmap was enacted on Monday the 18th
of May, and early indications have suggested that those businesses riding the
recent eCommerce wave might face a downturn. There is no doubt the that online
buying intent declined fractionally during the early days of phase one, and we
have noted an increasing cost per conversion across many of the Google Ads
Campaigns we mange on behalf of our clients. These increased coincided with the
expected and projected decline in the number of sales being processed online
during the early days of restriction easing. Interestingly, however, these
increases have only been marginal to say the least and have not prompted panic
in the makeshift home offices of the Dmac Digital Marketing team. In fact, some
businesses have not experienced any drop off in the volume of sales generated
through their online shop.
Interestingly, over the last 7 days, some businesses have
noted an apparent return to pre phase 1 sales. Possibly driven by the
frustrations of queuing at recently reopened bricks and mortar stores, this
return could be indicative of what to expect over the coming weeks and months.
The reality is that most people in Ireland will have had their first experience
of buying online thanks to the recent restrictions. These positive experiences may set the cornerstone for a rapid growth in
Online sales within the Irish market in the coming years.
So, what does all this mean?
The marginal decline in sales processed coupled with an apparent return to mid pandemic levels, in the short term at least , could be indicative of what online business might expect over the coming weeks and months as the country works through the roadmap. It is highly likely that we are going to see a greater number of people shopping online, many of whom may have never previously bought online before. We do think sales will plateaux for many businesses who have benefited from the recent uplift, however, this plateau is likely to be higher than prior to Covid 19. Those actively engaged in digital marketing should closely monitor their cost per conversion or CPAs over the coming months to ensure profitability at all levels. Expect a decline from the sales highs experienced during the “lockdown” as we all adjust to the new normal but anticipate a new normal sales volume higher than prior to Covid 19 crisis. Beware of new entrants also, government initiatives such as the Trading Online Voucher Scheme has experienced an incredible uptake as businesses add an eCommerce arm to their business, and this is likely to impact sales long term. Initiatives such as this will lead to higher numbers of eCommerce businesses making the market more competitive. Consumers will subsequently benefit from online price competition as eCommerce stores vie for their businesses.