COVID-19 a Rare Chance for Online Retailers to Win Over First-Time Shoppers

David Abbou
  • David Abbou
  • May 31, 2020
  • 5 min read

Impacting the health of millions, driving up unemployment rates and sending consumer confidence plummeting — COVID-19 has posed major challenges and disrupted economies around the world in just three short months. In the U.S. alone, close to three million people filed for unemployment insurance over the past week, bringing the number of jobless Americans up to 36 million.

This is testing the resilience of many industries, but perhaps nowhere can you see how the effect of this outbreak is changing the landscape than in retail. Temporary store closings are taking their toll on companies that have been slow to adopt to eCommerce and heavily dependent on their brick-and-mortar presence.

COVID-19 accelerating the shift to eCommerce

On the flipside, online sales in several verticals have spiked dramatically during this period. Working with over 150 brands worldwide, Namogoo’s platform analyzes billions of consumer visitor sessions throughout the year. To gauge the verticals gaining the biggest increases in online sales during the pandemic, we compared eCommerce conversions for the months of April and February – just before COVID-19 became a pandemic. These verticals experienced the biggest increases:

In addition to unprecedented demand seen by online supermarkets, homeware and home improvement retailers also saw sales nearly triple in April compared to February, as did health and beauty brands. Other non-essential product verticals like electronics and apparel saw dramatic gains in online sales last month compared to the start of the pandemic.

A new customer base waiting to be won

This period had led to a unique peak season effect where consumers are relying more than ever on eCommerce websites to support them in getting the goods and services they need. That’s heartening news for retailers short-term, but the real key, when looking at the longer-term picture, is digging deeper and understanding who is buying online: It’s not just existing online consumers that are upping their spending, many traditional offline shoppers have converted into first-time online shoppers during COVID-19.

In our recently published survey, 14% of consumers said they have shopped online for the first time as a result of the coronavirus outbreak. Nearly half of these first-time online shoppers said they expected to continue shopping online after the COVID-19 period comes to an end.

Our partner Signifyd is also seeing these trends in their COVID-19 Weekly Pulse Report, which has been tracking ecommerce spending throughout this pandemic. Signifyd’s Commerce Protection Platform Provider shields merchants from fraud and consumer abuse. 

Signifyd has tracked a 51% increase in overall ecommerce spending between the last week of February and the seven-day period ending May 25.

And while the overall figure is impressive, the numbers in some of the verticals are eye-popping. Online spending in the Outdoor & Leisure vertical is up 137%, owing to indoor exercise equipment, puzzles, hobbies and video games being in the category. Electronics is up 109%; Auto, Parts & Tires is up 71%; Alcohol, Tobacco & Cannabis is up 60% and Grocery and Household Goods is up 40%. 

Frictionless customer journeys the key to succeeding long after COVID-19

These consumer trends are showing that amidst complexities and challenges caused by COVID-19, there’s an unmistakable ray of light that is shining bright and clear: the digital economy has been accelerated during this period. With existing customers spending more online and first-time shoppers finally taking the ecommerce plunge, online retail brands now have a unique window of opportunity to not just increase ecommerce revenue short-term, but gain an entirely new cohort of online customers. 

Competition for this growing ecommerce market will be more fierce than ever. To compete successfully for the loyalty of these new online shoppers, they’ll need to deliver a top-flight customer experience. Unwanted disruptions and friction during their journey can leave them with a negative perception and have them shopping at the competition.

Together, Signifyd and Namogoo remove these barriers throughout the customer journey and help brands grow revenue while earning that loyalty to success in the long run.

Namogoo’s Customer Hijacking Prevention platform means that buyers’ shopping journeys won’t be interrupted by Customer Journey Hijacking. Throughout the year, over 20% of all ecommerce site visitors are subjected to unauthorized ads that are injected into their web browsers. Retailers can ill-afford to have their first impression with new online shoppers be marred by competitor offers and salacious content that immediately downgrade the customers’ experience and lure them to buy elsewhere. 

Eliminating these disruptions sees retail brands worldwide lifting overall conversion by 1.5-5%, and lowering checkout abandonment by 5-9%. 

Signifyd also streamlines the checkout process by ensuring that orders are not hung up in lengthy fraud reviews and that legitimate customers don’t see their orders falsely declined for fear of fraud or abuse. Signifyd’s Commerce Protection Platform combines machine learning, big data and human expertise to maximize ecommerce conversion, automate customer experience and eliminate fraud and customer abuse.

Its Revenue Protection solution instantaneously sorts fraudulent orders from legitimate orders and provides a financial guarantee that means merchants are made whole for any approved orders that turn out to be fraudulent. More importantly, it ensures that legitimate customers won’t see their orders declined for fear of fraud. 

On the post-purchase side, Signifyd’s Abuse Prevention solution automates the management of non-fraud chargebacks and provides a financial guarantee that protects merchants from losses when a customer claims an item was not received, for instance.

Eliminating friction for online shoppers has long been one of the top priorities for online retailers—Namogoo and Signifyd help them deliver the optimal customer journey needed to earn loyalty and grow revenue by preventing invasive ad injections and delayed order deliveries caused by false declines and lengthy manual reviews.

While there are many offline issues that are currently out of online retailers’ control, they can control the online experience shoppers are receiving—that’s never been more critical than during the COVID-19 period, a time where millions of stay-at-home consumers are turning to ecommerce to meet their buying needs.