COVID-19 brings increased consumer openmindedness
84.8% of CMOs have observed an increase in customers’ openness to new digital offerings introduced during the pandemic, with nearly 60% also seeing customers do more digital research before purchasing. 43.3% are seeing customers be less willing to pay full price.
CMOs also report consumers placing increased value on digital experiences (83.8%) and new customers being attracted to their brand (65.4%).
With growing concerns like social unrest, the coronavirus pandemic, and consumers’ general distrust in brands, giving back and being authentic also became more crucial for brands in 2020. 79.1% of CMOs report increased acknowledgement from customers of companies’ attempts to “do good.”
As customers are more open-minded to new digital experiences, they’ve also increasingly looked online to make crucial pre-purchase decisions. 59.% of CMOs report seeing more reviews and other posts about brands online and 58.8% report that they’ve observed customers conducting more digital research before making a purchase.
The digital triopoly in light of COVID-19
After the most online-centric year since the dawn of digital marketing, the digital triopoly (Amazon, Google, & Facebook) has shifted in some notable ways.
Amazon grew its advertising business by 52.5% last year, increasing its share in the US digital ad market from 7.8% to a record 10.3%. Search revenue from Sponsored Products and Sponsored Brands along with video ad revenue from Amazon Fire TV, Twitch, and IMDb TV helped contribute, with customers spending more time shopping and watching videos online last year due to the pandemic.
Google’s share declined slightly from 31.6% to 28.9% while Facebook saw a slight increase from 23.6% to 25.2%. Google’s share is expected to decline to 26.6% by 2023, though its digital ad business is expected to grow.
The remaining percentage is made up of other platforms that combined to make up 35.6% of digital ad revenue share in 2020, down from 37% in 2019 in light of Amazon’s significant increase.
Pandemic accelerates digital real-time payment adoption
The coronavirus pandemic accelerated consumers’ adoption of real-time payment options by 41% last year. Global mobile payments make up 46% of that, amounting to a total of $102.7 billion last year and expected to surpass $2.5 trillion by 2025. In 2018, global mobile payments accounted for just 18.9% of real-time digital transactions.
What is real-time payment? Real-time payment refers to digital wallet options that allow consumers to make contactless payments quickly and electronically. Examples include Apple Pay, Google Pay, Venmo, and Zelle.
In 2020, real-time payment transactions hit an all-time high of 70.3 billion, up from just 50 billion in 2019. Still, only 0.6% of all U.S. processed transactions were real-time last year, with this digital option more advanced in other countries. That number is expected to grow to 3% by 2025, which means brands need to be prepared to adapt to consumers’ changing purchase preferences.
With contactless payment expected to continue thriving as consumer preferences surge toward favoring digital, what other COVID-19 trends can we expect to live on post-pandemic? Stay tuned to this blog as we keep you updated with all the latest.
COVID-19’s impact on the apparel industry
Casual apparel brands thrived in 2020 with consumers spending more time at home. This trend is expected to continue into 2021 and beyond.
Prior to the pandemic, non-active casualwear made up over half of the overall apparel industry’s annual sales. The athleisure market now makes up 20% of all apparel sales and is expected to grow by as much as $81 billion from 2020 to 2024.
Many retailers have been forced to carefully rethink their strategy in light of COVID-19. Gap plans to double its online business by the end of 2023 and is building a $140 million warehouse to make it happen. At the same time, the retail giant is shutting roughly 30% of its North American stores.
As the leading casual apparel company worldwide (according to Statista), Gap expects that 50% of its sales will come from digital this year. Ecommerce accounted for 45% of Gap’s revenue in 2020, up from only 25% in 2019. Online sales for Gap were up 54% in 2020, while total sales declined 15.8%.
Omnichannel retailers Kohl’s and Nordstrom Inc. saw significant online growth last year, as well. Online sales for Kohl’s were up 41% in 2020, with 40% of online orders picked up in-store. Ecommerce accounted for 55% of Nordstrom Inc.’s revenue in 2020, up from 33% in 2019. 30% of online orders were picked up in-store compared to 10% in 2019.
To learn more about COVID-19’s impact on online grocery, see our additional resources:
