How Retailers and D-to-C Brands Can Survive the COVID-19 Crisis
There's no way around it: times are tough for retailers and direct-to-consumer (D-to-C) brands as they absorb the shock of COVID-19 on their businesses. However, the sudden upheaval is also bringing out the best from leaders in our industry, as they craft proactive strategies for survival, recovery, and future growth.
To that end, we’ve put together actionable recommendations, drawn from our work with over 300 D-to-C and retail brands, to help you drive demand and plot a way forward.
Optimize for Performance and Lay the Groundwork for Recovery
Cut only unprofitable marketing campaigns or channels, and focus your limited resources where you can measure real performance. Continue to spend money on any marketing channels that perform above breakeven and hit return on ad spend (ROAS) targets. New customers acquired at breakeven will drive more demand and profit in the back half of the year.
Keeping an open mind and optimizing for performance is essential when digital media inventory is undergoing such volatility. With more users online, an explosion of supply lead cost per thousand (CPM) to drop 40 percent week-over-week in the last week of March, but then rebounded this past week +17 percent week-over-week, suggesting some companies are starting to take a more aggressive stance to their marketing efforts.
Formulaic approaches will struggle to adapt around such changes. Stay nimble, continue to monitor CPMs, cost per clicks (CPCs) and engagement metrics closely, and invest into the pockets of strong performance.
Adapt to Shifts in Digital Consumption
COVID “has changed the way we internet,” according to The New York Times, showing a significant shift in behavior from mobile to desktop. It's essential to ensure that all marketing messages are consistent between channels and optimized for both mobile and desktop.
More desktop time also means higher email open rates. It's a good time to continue emailing your customers as long as the messaging is considerate, provides real value, and is in touch with the current situation. Now is not the time to drive a sense of urgency around nonessential items.
- Take a “crisis approach” to measurement. Create new, more frequent reporting based on the most up-to-date results you can derive. Comparing year-over-year or month-over-month results won't provide an accurate picture of digital marketing performance. Instead, build a day-over-day report beginning March 9. Watch higher-funnel metrics (e.g., engagement rates, clickthrough rates, brand search volume) at a channel and campaign level so that you can quickly evaluate what’s working and what's not.
- Adjust your messaging to show care and respect for the customer’s constantly changing situation. More than ever, we need to be customer-first, and this means understanding what customers are going through right now. Brands should be aware of the torrent of troubling headlines and support messaging that emphasizes an understanding of the customer’s current needs or mind-set. Review every piece of creative to ensure that it reflects that understanding.
It’s not just a matter of being careful in how you message around COVID — there's also an opportunity to extend a welcome hand by finding creative ways to bring your customer service experience to digital platforms. For example, many home décor brands are offering online interior design consultation as a way to stay connected to customers. Consider ways to shift in-person customer interactions and services online with a focus on providing value to best customers.
Take the Reigns
Above all, know that now is not the time to cut back arbitrarily. Never walk away from communicating with your best customers and best prospects. The brands that act nimbly and decisively today can uncover unique opportunities to maintain those critical relationships in a time of rapid change and upheaval.
Companies that invest wisely in marketing during slowdowns come out stronger than companies that cut back.
Polly Wong is managing partner, strategic/e-commerce/creative services at Belardi Wong, the leading direct marketing firm in the industry, working with more than 100 retailers and best-in-class brands.