Update B2C Digital Commerce Strategies During a Crisis

Major retailers have shifted their online strategies rapidly in response to the COVID-19 pandemic. Some of these changes are temporary, but many are here to stay as the crisis evolves. Marketers need to stay tuned and hone their strategies accordingly.

Based on several brands’ responses to the pandemic, Gartner research indicates four best practices for marketers.

In the initial stages of the pandemic, surging demand for household goods and medical supplies led to heavy price increases and a decline in inventory across digital commerce platforms. Categories with a higher share of third-party sellers saw significant price gouging.

On Amazon, for example, the average price for best-selling medical supplies, such as bulk face masks and thermometers, rose by 28% in the first quarter of 2020 compared to the first quarter of 2019. Prices for best-selling face masks shot up 197% on average, showing that consumers were still willing to purchase the products despite much higher prices.

Gartner analysis shows that an Amazon-specific medical supply brand had the highest share of face masks on the Amazon Best-Sellers page, while 3M, a national scientific and industrial supplies retailer, had no best-selling products during this period.

In these circumstances, it’s essential to plan for brand defense. “Brands that operate in sectors seeing increased consumer demand should consider partnering with e-tailers to prevent third-party sellers on these platforms from gouging prices on their products,” says Lakshmi Kalluri, Senior Specialist, Research, Gartner. “Make sure you’re the one selling your brand.”

Employee safety and customer expectations are top concerns. Gartner analyzed a group of digital retailers between January and April 2020 to see how and when they communicated CDC and WHO guidelines, inventory updates and general information. Most major retailers — including Amazon, Walmart, Best Buy and Target — dedicated a webpage to detailing the changes they had made to help mitigate health risks and the shortages resulting from panic buying.

“To maintain effective communication with consumers, retailers should use their homepage and email to communicate changes to their policies and the steps they’re taking to curb the spread of the virus,” says Kalluri.

An information hub helps brands and retailers gain customer trust and ease the stress of buying essential goods during social distancing. For example, home care brands Lysol and Clorox adapted their brand sites into information hubs in January 2020. Their site content focused on providing background information and addressing frequently searched questions about the virus and how to prevent its spread. 

In the following month, Lysol and Clorox received 15 times and 4 times more respectively than their previous year’s monthly average unique visitors. For both brands, the most popular webpage in February 2020 was their COVID-19 information page, followed by the pages for their disinfectant sprays.

Consumers began looking for small electronics brands like Logitech and Samsung on Walmart around the first week of March, as people were adjusting to working or schooling from home. Searches for laptops also increased. Brands responded by increasing search investments on sites such as Amazon and Walmart. Laptop brands like Samsung and Apple increased their search ads on Walmart in mid-March to preempt consumer demand. As secondary needs emerge during the crisis, marketers should respond quickly to ensure that they are top of mind in a challenging retail environment.

The COVID-19 pandemic is prompting major changes in consumer buying habits, including much greater reliance on digital retail. Brands need to update their fulfillment strategies, refocus their ad spend and use insights from category differences to make decisions about more effective ways to reach customers during the crisis and beyond.

Gartner clients can learn more in Updating B2C Digital Commerce Strategies During a Crisis Period. Gartner clients can also visit the Gartner COVID-19 Resource Center to learn more about how to lead through the disruption of coronavirus.