Commerce After COVID-19: How Can ‘Non-Essential’ Brands Prepare for a Return in Demand?
Jason Fidler | June 1, 2020
The ongoing COVID-19 pandemic has ushered in drastic lifestyle changes for consumers, impacting how they shop and what they buy.
The crisis has universally accelerated ecommerce adoption by as much as five years within a few months. Products deemed “essential” continue to be prioritized by both consumers and retailers alike — while “non-essential” products, such as apparel or travel-related items, have cratered in demand.
Brands in the “non-essential” categories have therefore been notably impacted by the crisis. For many, strategies have shifted to focus on merely staying afloat in the short-term while preparing themselves for when demand picks back up.
But how do they do that, exactly?
How can brands begin to reallocate resources and restructure their organizations today so that they’re best prepared for tomorrow?
To answer these questions, the Digital Shelf Virtual Summit invited Peter Leech, head of the digital commerce practice at The Partnering Group (TPG), and Jamie Dooley, a digital commerce practice partner at TPG, to participate in their most recent session.
With combined experience ranging across leadership roles at brand and retail behemoths like Target, Wayfair, Procter & Gamble, Dunkin’, and more, Leech and Dooley offered insights into how “non-essentials” can ensure a brighter future ahead.
Step 1: Break Down Loss in Demand
Not all loss in demand is created equal. Some product categories may be eliminated for the foreseeable future. Dooley notes that in such cases, brand manufacturers must reflect this in their upcoming forecasts.
There are other categories, however, where brand manufacturers can be reasonably sure that recent losses are temporary, and pent-up demand will make up at least some of the difference. Automobile-related categories, such as baby seats or car cleaning devices, or socially triggered categories, such as men’s formalwear or baby shower items, fall into this group.
Even within categories, there may be different drivers for the loss of demand. For example, various aspects of travel-related categories may be impacted because of COVID-19 or because of the impending recession. Understanding what exactly is driving loss, and how long it will continue, is key to formulating longer-term demand forecasts and merchandising for them.
Step 2: Focus on the Fundamentals of Consumer Experience
Leech and Dooley both advise that brand manufacturers take the slowdown in activity to “refocus on the fundamentals.” One area, in particular, that may need a refresh due to the rapid overall acceleration in ecommerce is customer conversion.
There are a host of questions brand manufacturers need to ask themselves when it comes to gathering a complete picture of how they are positioning themselves to consumers:
- Do they know which sites are seeing a spike in traffic?
- Would the brand benefit from more investment in direct-to-consumer (D2C) and marketplace selling — particularly in place of continued deprioritization by major retailers such as Amazon?
- Are the brands and products being positioned as perfectly as possible for target consumers across digital channels using the right content?
These are questions that many brand manufacturers may not have asked themselves in a while — or perhaps never.
“Almost every client we speak to says they wish they could rewind the clock a year” for ecommerce programs like D2C or product content,” Dooley notes.
Step 3: Decide on the Right Organizational Structure
One of the most challenging aspects of ecommerce for many brand manufacturers is determining where it fits within the organization. Brands need to decide whether or not they have a team solely focused on ecommerce, a decentralized approach that is baked into many teams, or a hybrid of the two.
While Both Leech and Dooley have seen success with all three approaches, they believe that selecting a hybrid structure appears to work the best for most brands. Hybrid structures allow brands to have centralized areas of excellence in certain areas of ecommerce while also being able to leverage resources and expertise from other parts of the organization.
An excellent example of this is content. While the brand team may be responsible for the content, individuals from teams ranging from product management, customer experience, and sales should also be involved to ensure that content is as engaging as possible for consumers across all digital channels.
Regardless of what path they take, ecommerce initiatives will only be successful if there are clear goals and alignment to which all stakeholders have bought in.
“The thing that really catalyzes organizations is setting goals from the top-down for ecommerce,” Leech says.
One thing is for sure: There are brighter days ahead for brand manufacturers of “non-essential” products. The organizations that make the right structural and programmatic changes today will be best positioned to capture the inevitable rise in demand as things slowly begin to return to a semblance normalcy.
Listen to the full session, “Prepare to Win the Digital Shelf When Demand Returns,” to learn how to stay connected to customers and prepare for return in shopper demand once the COVID-19 crisis has ended.