In light of the COVID-19 outbreak and resulting impacts on businesses and the economy at large, we wanted to share greater performance trends we're seeing across our agency clients. This largely focuses on retail trends from early March when the impact in the U.S. took significance. Please continue to check back here for updates as we’ll be refining this over time with new findings as they develop.
At a high level, what are we seeing across our retail DTC clients?
As you may suspect, the markets are down and consumers are therefore scaling back spending in non-essential categories, such as retail, and instead, spending in more essential categories such as food and supplies. As a result, we’re seeing big brands in these non-essential categories pull back spend particularly on brand awareness buys, which is contributing to a decline in CPMs across media platforms. This leaves an opportunity on the table for our DTC brands to take advantage of these lower CPMs and focus on direct response marketing efforts.
While the cost of media has gone down, we’ve also noticed performance declines in efficiency metrics such as return on ad spend (ROAS) and CPA. While this is the general trend, we do have brands that are continuing to drive strong conversion volume and who are seeing increased conversion rates WoW, MoM, with maintained or lower CPAs at scale. This in part is driven by the products being promoted as we’re seeing stronger performance across brands whose products are more relevant to consumers during this time, such as casual wear.
We’ve also noticed that as time progresses, and consumers adapt to the ‘new normal,’ purchase volume and revenue are decreasing at a slower rate than the spend decreases. This highlights that there are strategies we can implement to improve performance over time for brands. Also important to note is that weekend performance was strong for several brands, which we speculate is due to consumers spending more time at home during these days shopping online.
Unsurprisingly, we’ve also seen brand search impression volume trending down. Brands are competing for attention with the COVID-19 virus, the election, a focus on the essentials, and people are conserving their disposable income. That said, it’s still important for brands to have a presence on brand search to ensure we're capturing high intent users during this time.
So, what do we propose brands do given these findings?
First and foremost, be present across platforms. Even if performance warrants scaling back spend to some degree, it’s never good to shut off accounts entirely and lose the algorithmic learnings gained over time. Additionally, you want to be present to take advantage of days when we see improved market performance.
Continue to align marketing programs with evolving business goals - for the majority of our clients, right now that is focusing on efficiency. At the same time, lean into opportunities to capture scale - whether that’s on certain days (promotions, weekends) or new audiences based on CVR (both acquisition and retention).
Make sure you’re emphasizing products that are relevant to today’s consumer mindset. As more people work from home, focus on items related to loungewear, home goods, health and wellness, and essentials. Ensure messaging remains relevant as well. Continue testing to see what resonates over time.
Let us help you.
Interested in seeing the actual numbers behind these trends? Or want help finding pockets of opportunity for your brand despite the economic downturn? Please contact us at firstname.lastname@example.org. We’re experts in performance marketing for DTC ecommerce brands and are here to help. Also, we’ve recently joined forces with Wpromote to provide you with expanded offerings; learn more here.