Does Covid-19 Have a Silver Lining for Online Brands?

You talk yourself into buying the 50 pound bag of flour, you have bread recipes scattered across your browser tabs, and then…

“Your item will ship in 2-3 weeks.”

For consumers who know the magic of next-day delivery, this feels almost impossible. Thermometers, hair color, flour, toilet paper, hand sanitizer have been cleared off the shelves in real stores and in online giant Amazon.

I’m pretty sure I canceled this order for 20 tiny rolls of toilet paper from Amazon back in February, but it arrived anyway in June. Thank goodness Costco restocked quickly or I would have been in serious trouble last spring. Also, I would have sent it back, but as you can see, Envision 3ply bath tissue claims to provide “the feeling of falling in love with you”.

Fast forward a few months and the toilet paper is back, but something else is running low. When typical knowledge workers finally return to their offices, it’ll hit a new segment — there’ll be a run on office supplies so everyone has their own set of pens, video monitor systems for pets with newly discovered separation anxiety, and office-appropriate apparel to ease out of 100 plus days of sweatpants.

As off-brand black beans and vegetable soups start climbing to a higher place on shelves as grocery stores struggle to get orders placed, the same is happening online. And instead of the line wrapping around the Whole Foods, it comes in the form of delayed fulfillment.

As we slowly see some non-essential businesses reopen over the next couple months and year, this time could present a major opportunity. At Lucidworks, we’ve noticed that consumers are choosing to set up new accounts with online brands they haven’t previously shopped.

We work with retailers in every category but decided to drill into apparel to identify trends. We looked at the first 15 weeks of 2018, 2019, and 2020 to draw some comparisons. Here is what we found: new customer segments grew anywhere from 50 to 100% in 2020 compared to the previous two years.

Let’s assume this trend is widespread. That could be a real opportunity for online brands to claw back wallet share from the giants if they can manage to capture customers and continue delivering over the next few months. Retailers should be prioritizing: email marketing, onsite personalization, and fulfillment, all ways to keep customers engaged with a brand more than Amazon ever could. Here are a few examples of how brands are staying connected with their loyal customers and capturing a new group of shoppers who are outsourcing their Amazon account.

Local independent stores to the front.

It’s true Bookshop was born from the pandemic fears that indie bookstores would be crushed by Amazon. And while sales are up at major book selling chains, this new online platform could be a game changer in the long run for bookstores who struggle to compete. Bookshop’s immediate popularity demonstrates customers’ willingness to support local shops, and could supplement some of the warm and cozy feelings you get when you know you’re supporting a small business.

Andrew Lipsman, a retail and e-commerce analyst for eMarketer, explains, “If small local businesses are quick to build out systems for e-commerce, they may survive the pandemic and even hold onto a piece of the e-commerce market share after the pandemic passes.”

An online bookstore that financially supports local independent bookstores and gives back to the book community.

Get creative about how you can provide information without selling.

For consumers who are heart-driven and focused on brand mission it’s important to remember the things you can give that aren’t selling. People may forget what you tried to sell during this time, but you can build a lifelong customer if you find a way to connect with them emotionally. For example, Free People offered help on how to create a mask from existing clothing and without a sewing machine, and Walmart shared a heartwarming ad from its employees.

Some businesses are finding completely new ways to offer their services. And although it started out of desperation, some may be worth holding onto. For example, the date in a box that restaurants are providing — a meal kit that comes with a menu, instructions how to heat things up, and a flower to adorn the table. Customers will remember the atmosphere you created for them; those extra thoughtful touches can go a long way when we’re all stuck inside.

Online meal kit from Delfina.

Make conversation possible digitally.

Shoppers are calling out for online touchpoints not only to help them find products, but as a place to access knowledgeable staff. We miss out on getting advice at places like REI and Sephora where it’s easy to get a trusted opinion on the best tent for a Pacific Northwest summer or an affordable anti-aging moisturizer for sensitive skin.

Many retailers are doubling down on chatbots. One of the best examples of how chatbots and virtual assistants can improve the digital experience is at Restoration Hardware (RH). The RH experience usually involves interacting with interior designers in the gallery and building out your dream living room or bedroom. When stores had to close due to Covid-19, RH turned to chatbots to support shoppers. Designers were standing by to help with design services, material selection, and product questions.

At Restoration Hardware, you can chat with a designer 24/7.

Find the Silver Lining

The online brands that manage to go the extra mile, provide that personalized touch, and double down on new ways to engage customers could win new, lifelong fans. Check out this blog post for more recommendations on how to deliver a powerful digital experience while in-person interactions are restricted.

About Peter Curran

Meet Peter Curran, General Manager of Digital Commerce

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