The Impact of Covid-19 and the Global Market Downturn: Interview with Klickly, eCommerce Marketing Platform

Bradley: We're in the midst of a very interesting time. Of course, we're now going into month 4 of a "post-COVID" world, But even before that, data is becoming a much larger driver in making marketing decisions. The amount of data out there can often be overwhelming and hard to access, but having that data is so important for eCommerce merchants in order to make informed business and digital strategy decisions.

Klickly has a unique position in the ecommerce ecosystem. We're able to generate a huge amount of proprietary data — because of this, we have a much more nuanced view into digital performance than most other platforms.

Frankly, merchants should always be looking at this data, but the reality is that it's not always readily available for them. We're hoping that by curating this data we can help merchants, marketers, and beyond make well-informed, data-backed decisions.

Bradley: For this initial iteration of our data report, we really wanted to focus on the trends in eCommerce performance as it related to the weeks leading up to and following the official "stay-at-home" orders.

We looked at anonymized merchants across 9 different verticals and analyzed various data-points and trends to see if there were any overall commonalities or insights to take away per vertical. Some of these data-points we looked at were the week-to-week changes in Gross Merchandise Value (GMV), orders, new customers, and average order value.

By analyzing this data, we were able to look at how a market downturn affects eCommerce.

Bradley: GMV remained at a slow, steady upward pace — on par with what several industry leaders predicted in 2019. While GMV trended upwards, merchants were still experiencing minor weekly fluctuations.

In the first 5 weeks leading up to the stay-at-home orders (the week of March 15), we saw growth was mostly driven by an uptick in the number of new customers.

All in all, aside from a couple outliers, it was "business as usual". Even as the coronavirus came to light in early February, we didn't see any changes leading up to stay at home.

Bradley: For the most part the world transitioned to some form of quarantine the week of March 15. It may sound somewhat obvious, but merchants experienced one of three outcomes. Either there was a noticeable drop in GMV following these orders, it remained relatively the same immediately after, or saw a large increase. Each has their own implications and reasoning and boils down to which verticals we're talking about, but overall we saw nearly a 20% increase in GMV from the week preceding the stay at home order.

Certainly some industries experienced major spikes (see Food and Beverage), where others saw larger spikes the further we got into quarantine (see Beauty and Skincare). Looking at the data, it does seem very vertical specific, but overall we did see a noticeable week over week uptick in GMV.

Interestingly, the amount of new customers saw a more dramatic shift during that week — increasing nearly 44% from the week prior. This influx of new customers, drove the majority of the GMV increase, second to a nearly 17% increase in the number of orders. It should be noted that the average order value began its decline around this time, meaning more people were buying lower priced carts.

Bradley: As noted, Food and Beverage saw the greatest increase in spend during that week (129%). And it makes sense — restaurants all over the world went into shut down. The ones that remained open had to change strategies, relying on online orders. We saw an increased interest in eCommerce stores providing food options such as ready-to-cook, coffee, and snacks. This is also reflected in an over 200% increase in new customers shopping in this category.

One interesting vertical we looked into was Survival Gear. As you can imagine, this category experiences greater fluctuations than most, but two key stats to note was consumers shopping in this vertical acted earlier than others. There was a nearly 258% increase driven by higher priced carts towards the end of February and again another increase 5% the week stay-at-home orders were announced.

Other verticals experienced spikes, but at different times. For example, quite a few industries experienced a large spike the week of April 5.

Bradley: If I had to garner a guess, I would say this is likely due to the anticipation and receipt of stimulus checks. It was around this time that folks began to receive their checks from the government. It certainly appeared to stimulate eCommerce.

I think it could also partially boil down to that feeling of being stuck at home and boredom. We saw several industries remain relatively consistent after stay-at-home was announced and then see a noticeable lift a couple weeks in. It's likely a combination of consumers receiving their stimulus checks, passing time online shopping, and having to shift from brick-and-mortar to eCommerce.

Some notable verticals who experienced this spike were Fashion and Apparel, Babies and Children, and Hobbies and Lifestyle.

Bradley: Across the board, minus 1 or 2 exceptions, we saw new consumers drive much of this lift. This could be first time purchasers to the merchant's online store or be completely new to the brand. What we did see was the average order value slightly decreased meaning there were more people purchasing, but the individual's cart value decreased. Average order value decreased slightly during this time, meaning more people were purchasing, but individuals' cart value decreased.

People were purchasing less expensive goods (or fewer products) across most industries over the span of the 11 week study, however there were a few verticals who experienced a net positive average order value: Beauty and Skincare, Supplements, Food and Beverage, and Hobbies and Lifestyle.

One interesting note is during the final week in which we collected this data we did tend to see a universal drop off in the increase of new customers and orders and a slight rebound in AoV. It will be interesting to see how these trends continue with our upcoming full Q2 data report.

Bradley: Fashion was an interesting one. It didn't appear that the immediate impacts of COVID or the stay-at-home orders had much of an affect on the industry. GMV fluctuated as usual, the orders trended on par with GMV, and the amount of new customers — while net new — slowed down prior to stay-at-home.

About weeks into the announcement we began to see a steady increase in GMV and orders and what was the beginning of the decline in cart value. However this trajectory would continue and exponentially grow from the week of March 22 through April 12.

For the possible reasons mentioned earlier, we saw a large uptick in GMV, orders, and new customers — nearly 60%! Fashion and retail would remain at this level experiencing fluctuations, but largely remained at this level.

It's curious to note that many fashion retailers began offering PPE like masks, scarves, and other protective clothing, which could also contribute to these increases.

Bradley: As you know we've been in a "mobile-first" world for the past few years. And that hasn't changed with the pandemic. In the verticals we looked into, we saw 71% of orders come from mobile devices, 27% come from desktop, and just 2% come from tablet. This was true across the board, especially for those standard D2C repeatable products.

For products that require a bit more research (ie. Home Goods) we did see that these were predominately purchased via desktop (55%).

Surprisingly, Food and beverage did have a greater share of desktop purchases as compared to other verticals — seeing 41% of orders made via desktop.

Bradley: There's a lot that can be taken away from this study and hopefully marketers can pinpoint certain areas that are relevant to their digital strategy. I think there's four main takeaways overall that we saw when doing this study.

1. Having an online channel is a MUST! Even in 2020 there are several retailers who wonder "do i need to have an eCommerce presence?" Unequivocally, as we've seen, that answer is yes!
   
   
2. Make sure to have a good customer acquisition strategy. - Retention certainly shouldn't slow down, but you want to make sure you have a solid strategy to capture the increase of online shoppers.
   
   
3. Optimize for mobile. If you haven't yet, optimize your eCommerce store for mobile. Studies, including this one, show that the majority of people are shopping on their mobile devices.
   
   
4. Have a contingency plan for fulfillment. One thing not mentioned is the issues merchants were facing with fulfillment. Some of it was unavoidable given corona, but others found themselves out of inventory.
   

Bradley: Thank you! It was a pleasure. If you're interested in viewing the study or signing up to receive updates on future studies you can do so here:

View Data report: analyzing q2's dramatic ecommerce shifts, by vertical

We really hope this data is useful for marketers, merchants, partners, and beyond. We're also super excited to continue this data initiative. We'll be releasing a quarterly data report that will include more verticals and a look not only into performance, but order and on-site behavior.