Several years ago I watched the movie Outbreak about an errant virus getting away from the heart of Africa to make its way to the heart of America and threatening to create a pandemic that would wipe out all life in the US. It even had the US government thinking about the annihilation of an entire town to avoid its spread. I remember breaking into a cold sweat as I contemplated that possibility in real life. I had that same feeling during the early days of COVID-19.
Within a few months of COVID-19 most of us were convinced correctly as it turned out, that life would never be the same again for some time to come. For many of us, it got us thinking about our own mortality and reflecting on all the things we wish we had done earlier when we had a chance to do so.
Sometimes it takes a “black swan” event to get us all to do what we always knew we should be doing. Inertia, a fear of disrupting our own business, a fear of competing with our partners and perhaps a hope that the world around us will remain a comfortable place forever keeps us from doing what we ought to have done.
For brands the significant disruption of retail sales due to the inability of consumers to go into stores to make purchases was a moment of truth where they had to suddenly realize how vulnerable their business was due to its dependence on physical stores. The staggering statistic is that only 16 percent of retail sales in the US was happening digitally pre-COVID in 2019. This despite the fact that the technology for e-commerce is as old as the e-commerce led tech bubble/crash of 2000 where the overheated stock market crashed as investors prematurely bet on e-commerce companies that would have all consumers buy everything online, rendering brick and mortar stores irrelevant. The one notable survivor from that crash — Amazon.com now accounts for 37% of US online retail sales but only 6% of all US retail sales.
That market crash on March 10th 2000 was almost exactly 20 years ago from March 5th 2020 when the New England Journal of Medicine published details of the first US case of COVID-19 which subsequently set off the pandemic that as of this writing has killed over 160,000 people in the US and over 720,000 people worldwide and completely crippled retail brick and mortar sales globally.
In 20 years, e-commerce sales in the US has only grown to 14%, during COVID in just 3 months, however e-commerce sales has grown to 30% of US retail sales according to a report by Accenture. Some brands like Nike reported an increase of 75% in online sales.
While it is tempting to think this is a temporary shift and we will be back shopping away to our hearts content in malls. The truth is that e-commerce shopping has become an irreversible trend. The combination of a fear of going to public places combined with — for many just getting into the habit of shopping online for things they never purchased online before, seems likely to make this a permanent shift.
For marketers pivoting quickly from broad brand building to very precise marketing designed to get consumers to purchase online is not an easy task. For starters, broad, one-size-fits all messaging on traditional media like TV or billboards simply does not get people engaged to shop online. E-commerce marketing requires very product specific, personalized marketing that intelligently engages the consumer to visit the brands (or e-commerce retailer’s) digital store to make the purchase.
Such personalization requires the use of very fine-grained data about the specific consumer. Brands should not treat consumers as “audiences” a favorite term of media planners to avoid the heavy lifting required to run an effective personalized campaign, but rather as individuals who have many choices online and need to be engaged in a relevant manner.
To do this effectively, brands need to invest heavily and quickly in data infrastructure and personalization technologies that does the following really well:
- Scale the production of precise and relevant creative and content i.e. relevant products, packages, sizes, colors, offers etc. relevant to each consumer by automating creative production using technology
- Use technology that can micro-segment consumers via decisioning engines and/or AI and machine learning models to determine which product, offer etc. to deliver to each consumer/segment
- Do this across all consumer engagement channels to ensure a presence across the consumer journey
In a time of significant budget cuts, investing in anything at all may sound counterintuitive, however the cost savings realizing just from automating creative production (which for most brands even today is a manual human intensive and expensive process). A recent study by Jivox shows how these savings add up very quickly. Dynamic Creative Technologies (DCO) which encompass many of the above capabilities also significantly increase consumer engagement and conversion to sales due to the very precise and relevant nature of advertising and offers.
Brands that quickly pivot to e-commerce marketing stand to gain significant not just via better consumer engagement but also because they can be anywhere at anytime and not limited by whether they have a local brick and mortar store or not. A smaller, less known brand with the ability and smarts to invest heavily in e-commerce marketing could easily gain significantly on a bigger brand by doubling down on e-commerce marketing, indeed many are doing just that. Much like Soap Operas which were sponsored by the soap brands of Procter and Gamble, Colgate and Unilever, which at that time, created the TV advertising revolution (and coincidentally started a few years after the 1918 Flu pandemic and almost 100 years ago), personalized e-commerce marketing is going to be as important as the soap operas of the early 1900s.