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For the third day in a row, more brands this week report sales are going up than last week. It appears that consumers are keeping their spend up and shifting their dollars to new essentials—housewares, toys and hobbies, health and fitness, beauty and cosmetics, and specialty. More than 40 percent of brands reporting that sales are going up sell products in a new essential category.
Twenty-one percent of brands say they’re experiencing logistics delays with their supply chain (up from 16 percent). Additionally, 34 percent of brands that have reported issues with their supply chain are either because a factory is closed or their suppliers are temporarily pausing their efforts to provide materials—40 percent of which are apparel and accessories companies.
We’re seeing an increase in brands that say they’re spending more on ads. Brands that sell in higher demand essential and new essential categories (housewares, beauty and cosmetics, food and beverage, health and fitness) are increasing their ad spend and they’re also seeing increased efficiency.
Their cost per 1,000 impressions (CPMs) are down and cost per click (CPC) is flat or down, resulting in their return on advertising spend (ROAS) trending much higher than normal.
Connecting to your customers’ new normal. Marine Layer, a men’s and women’s apparel company, sent emails to their community with their employee-recommended work from home (WFH) clothing and tips. The email campaign, “What we’re wearing and what we’re doing to boost our moods,” featured each team member’s personal WFH preferences.
Growing a customer base. Who Gives a Crap, a brand that sells toilet paper, used a punny pop-up form to communicate that they’ve sold out of their product. They also use the form as an opportunity to collect email addresses and build their email list with high intent shoppers who will be the first to know when their products are back in stock.
Brands with increasing sales generally acknowledge that times are good for them, though they aren’t expecting this to continue indefinitely. They’re concerned about current and forthcoming low stock levels.
Several brands have reported feeling hopefully optimistic: they’re creating a stronger ecommerce strategy, they’re increasing their online presence, and they’re acquiring lots of new customers.
Brands report that engaging and communicating with customers through email and social media is working well. One brand said they’re going to try to send personal videos to customers.
We also heard that promotional discounts have been helping. One brand reported offering a 30 percent off promotion on all full-price products and up to 70 percent off past season products.
Brands with decreasing sales are feeling uncertain about shipping delays, fulfillment delays, and if they’ll have enough cash flow on hand to weather this storm. They’re also being more mindful of their ad spend and they’re spending less on ads because they’re not as efficient as they were previously.
Brands that reported having a physical store or that sell through wholesale partners are questioning their reliance on them. They’re considering putting more focus into their online channel going forward.
Brands report focusing on engaging communities through more humanized content is working well.
One brand reported that they were trying to use videos to show their brand story and their families. A couple of brands reported that keeping a positive outlook and relying on their team has helped them weather this time.
Brands with flat sales remain optimistic that things will rebound, but they aren’t sure when that might happen. They’re concerned about how consumer spending habits will shift because of job loss. They’re also concerned with how they should sensitively communicate with people.
Brands report focusing on communicating with their existing network and customers through email and social channels is helping them to create a loyal customer base.
One brand said they experimented with an email newsletter and it’s helped them extend their brand reach further.
For the second day in a row, more brands this week report sales going up than last week. The data is a bit noisy, so it’s hard to declare an official trend yet, but it appears that consumers are keeping their spends up and shifting their dollars to new essentials – housewares, toys & hobbies, health & fitness and beauty & cosmetics.
Fewer brands report anticipating issues with their supply chain, though more brands report delays from their fulfillment centers. We’re hearing many reports that manufacturing and shipping from China is ramping quickly and nearing normal capacity. We’re also hearing reports that Italian mills are completely shut down and American based fulfillment centers are slower than normal in fulfilling orders.
We’re seeing an increase in brands reporting that they are not spending any more money on ads and a decrease in brands saying they are spending less. As this pandemic persists, we’re hearing lots of reports from brands who are working on cutting all expenditures. Despite cutting, some brands aren’t certain it’s the best move. One CEO reported, “Right now we are cutting everything and not sure if this is the right approach.”
Being human and asking for help. Pistol Lake, a minimalist men’s apparel company, was feeling the effect of the virus hitting the United States and wanted to boost sales. The CEO, Ryan Light, put out an honest plea to their customers on Facebook and in Email to buy things they had been thinking about but hadn’t yet pulled the trigger on; it worked.
Over night, sales skyrocketed to more than 6x their normal volume, helping infuse the brand with cash.
Connecting with existing customers. Jelt, a recycled belt brand, sent emails to their community thanking them for their support by offering a friends and family discount and sharing that they are open for business – these emails had higher than normal open rates and generated sales.
Brands with increasing sales generally acknowledge that times are good for them but aren’t expecting this to continue indefinitely. They’re expecting a dip at some point, but don’t know when.
One brand that sells firearms and supporting accessories is reporting sales are up 450%. Some days it spikes to 900% and other days the lift has been around 275%. For consumers who use and own firearms, they are clearly considering this category a New Essential.
Brands report that friends and family promotions are working well. We’ve heard reports of targeting engaged or repeat buyers through email and retargeting them with a specialized discount code is generating sales.
We also have heard that brands are using this time to reorganize their business to understand all of their resources being spent and what they can do to help cashflow. Specific actions include lowering interest rates on Credit Cards, asking for a stay of payments or applying for a disaster emergency loan.
Brands with lower sales maintain their resilient stance – they feel they’ll emerge stronger than ever when this is over. That said, they’re concerned with consumer confidence. They perceive consumers spending less – though we know consumers generally aren’t spending less overall, they’re just spending on New Essential categories.
Focusing on engaging communities and growing email lists. One brand reported that engaging with their fans on social and showing the team behind the brand has helped. One brand that sells phone cases, had two employees host a “virtual BBQ” answering questions viewers have about the brand and giving discount codes to people who engage.
We also heard reports of a Klaviyo customer doing a product giveaway on a digital ad on Facebook to generate new email addresses. They’ve also created a website pop up with the same offer.
Brands with flat sales remain optimistic that things will rebound but aren’t sure when. They’re less worried about the business and more about personal issues, like their family’s health.
Focusing on customer service and providing timely, exceptional experiences. Keeping a strong relationship with customers helps them have human connection but also keep those customers for life.
By Wednesday, March 25, 16 US states will have a stay-at-home policy in effect–this will cover 40% of the US population. The stay-at-home policy exempts workers in “essential” businesses which seems to cover the logistics industry. California and Massachusetts policies include, “Employees of firms providing services that enable logistics operations, including cooling, storing, packaging, and distributing products for wholesale or retail sale or use.” We’ll continue to dig in to see if any states deviate from this policy and language.
For the first time since we started this daily update, there was an increase in brands report sales going up from last week. Of 121 responders, 29.3% of brands reported sales going up from last week, reversing a downward trend of fewer businesses reporting increasing sales. It’s possible this is a symptom of noisy data or brands comparing this week’s sales to last week’s sales, which was down for a majority of brands. We’ll keep a close eye on this trend and share what we’re seeing.
Web traffic appears to be tightly correlated with change in sales. The same percentage of brands that report an increase in sales (29.3%) see an increase in web traffic. Similarly, brands that report a decrease in sales see a decrease in web traffic. While this seems obvious, it may suggest that conversion rates are holding firm. If true, brands shouldn’t seek to optimize conversion rates today, but rather build deep relationships with existing customers, consider new products or new positioning for their brand. We hear reports of brands trying new messaging that is more relevant to the times.
Transparent communication with customers. We hear reports that telling customers you are open and how the governmental policies are or not affecting your business is resonating.
Internetwines.com sent an email to subscribers simply reinforcing that they are open for business and not affected by the stay-at-home mandates.
Messaging to the new normal. Brands that sell non-essential items or “new essential” items are working on messaging that acknowledges what consumers who are staying at home are feeling. This empathy can connect with people and give them a new reason to buy.
Santayana Jewelry offers pre-header text that says, “Quarantine is stressful. Let’s have some FUN!” Jewelry appears to be the hardest hit Ecommerce category in the past few weeks, so appealing to consumer sentiment will create a new reason to buy.
Brands selling essential items are benefitting in every category–increased web traffic, increased ad efficiency, and increased sales. Despite this, they are cautiously optimistic and nervous about how long this pandemic could last. Many brands report hoping to have more first time customers by the time this is all past us.
A supplement company is reporting success working with gyms/trainers to promote their product. Could this be the perfect time to engage influencers? With consumers at home and increasing their consumption of social media, are they looking for guidance and ideas on products they should have at home to be healthier and more comfortable?
A boutique cookie brand reported sales up 180% week over week due to pumping ad spend when competitors appear to be pulling expenditure back.
Brands report feeling either excited to emerge stronger than ever or nervous their business will shut down. They’re mostly concerned with the duration of this financial slow down or general health.
Apparel continues to be the largest represented category of brands reporting decreased sales. That said, we’re hearing reports that setting ROAS targets on Google Ads is working, as well as trying to create and sell new, lower priced products. Many brands report seeing success with adjusting messaging to reflect this new normal while working on optimizing their automations in anticipation of an eventual increase in web traffic.
These brands seem to be in a holding pattern, hoping that this crisis passes as quickly as possible.
The general sentiment is that communicating transparently with customers that they’re open and potential shipping delays is working.
We’re seeing reports of more brands experiencing delays with logistics providers. The data is still very noisy so it’s hard to infer actual impact – it seems like more brands are experiencing warehouses fulfilling more slowly than in the past. California ordered citizens to stay home which has brands concerned that warehouses may close, though we hear reports that warehouses intend to stay open. Colourpop announced today that they will be temporarily closing their warehousing and fulfillment center. The number of brands who report no issues with their supply chain is reducing day over day. More brands are concerned that they’ll experience issues but more than half of all brands are not experiencing any issues.
Consumers are starting to buy more categories with the new essentials in mind. Reports from consumers who are spending more time cooking are considering buying new cookware. Parents are looking at buying crafts for kids to “Keep kids busy, use time at home to do home improvements.” We spoke with multiple people who are looking at buying bikes as a way to get exercise and spend time safely outside. We will dig in more on consumer intentions and report them back here.
An increasing number of brands report that they are reducing their spend on advertising. A steady number of brands are spending more on advertising. There appears to be a slight trend of an increased number of brands who are not spending on advertising.
They are also focused on selling new essentials. Faherty, an apparel company, is marketing their “Comfy Collection” via email as perfect for people working from home.
Their email features families with young kids and the subject line calls out clearly “Working from home? 25% OFF Comfy Collection”
Redline Steel is focused on community building and spreading positivity. They are giving away a FREE Nurse Life Piece (limit of 10,000) for anyone who wants to dedicate their thanks to a nurse who they are thinking of.
Brands are enthusiastic about their results and tentative about the future. They recognize that their in-demand items are flying off the shelves and they are not sure how much more inventory they’ll be able to get. China manufacturing is optimistic that production is ramping back up.
Brands that are selling well are thinking about fulfillment contingency plans – such as fulfilling in their homes in the event their warehouse closes or is too delayed.
The general sentiment among brands with lower sales is “The shorter this lasts the better. As long as I maintain a good connection with my customers, and keep them informed of our situation, I believe we’ll emerge even stronger.”
“Staying in touch with the customers. Providing a voice of hope and solidarity. I believe keeping our inbox and social media open to discussion we are giving people reason to believe in us as a beacon of hope and a reason to believe that, while this sucks, we’ll get through it together.”
Some brands are shifting to sell online courses, so they can offset some of the reduction in product sales. Product releases continue to do really well. The Bearded Bastard reported releasing a product that has a huge boost in sales.
Brands are being creative about how to position their product. Sur La Table is recognizing that people are cooking more at home and offering products and tips on how to cook better food.
One brand reported running a giveaway that has huge engagement, likely because people are working from home and engagement on social media is up.
Brands are putting in the effort to staying positive, being resilient and nimble. They’re cautiously optimistic that their businesses will survive this downturn and they will emerge with tighter, stronger businesses.
Many of these brands report that advertising is working well for them, in particular on social media. We heard reports that social media engagement and time spent is up, as more consumers are working from home. Promoting top selling products and solutions for new needs (e.g. kids at home, furnishing a home office, cooking from home) may be resonating with consumers.
Based on our latest survey insights, we predict that consumer behavior is shifting. With the work from home status seeming to last longer than another 1-2 weeks, workers are starting to think about what they need to buy to be comfortable at home. We believe this first phase was about buying essentials, the next phase will be about buying items that make people comfortable and the next phase will be about items that make people happy.
Example of someone looking to be more comfortable and support small businesses:
Example of a brand providing value to parents at home and seeing a huge benefit as a result:
My friend’s yoga for kids website traffic has gone up 11,600% since Tuesday.
— Michelle Tandler (@michelletandler) March 19, 2020
A consistent percentage of brands report sales going up. We also see a consistent shift of brands moving from sales being the same to sales being worse, week over week.
3PLs are taking their roles very seriously. We’ve heard multiple reports of logistic centers and warehouses isolating one worker per brand, running shifts of workers, checking temperatures of employees before they enter and requiring staff to wash their hands a certain number of times per day. We’re continuing to dig in on this trend.
Brands continue to report reducing their ad spend despite reports of ROAS becoming more efficient for brands that offer essential and semi-essential products. We spoke with a brand today who sells a semi-essential good – kid’s clothing – who reduced ad spend despite ROAS going to 10x (up from approximately 1.8). She is generally concerned with what will happen and doesn’t want to spend her available cash on advertising until she has more certainty on how things will play out.
It’s not clear, though, if that’s really the right strategy. Consumers are spending more time online right now. With ad budgets going down for most, inventory is available and consumers are looking for items that will help them be more comfortable at home.
Crazy time right now.
Everyone is on these platforms so attention is high and competition is cutting spend so costs are down. That means… HIGH attention at a LOW cost.
Don’t stop marketing!
— Jason Portnoy (@jasonportnoy) March 19, 2020
Brands report that they are skeptical these good times will last indefinitely but don’t have a good hypothesis as to why. They can’t believe that they are doing so well.
Brands continue to be nervous about supply chain disruption but don’t see any immediate impact. One brand told us today,”I don’t know why I’m nervous…I guess anything is on the table so it’s possible the warehouses could close?”
Creating content that is supportive of consumers. Princess Awesome, which sells science and technology inspired children’s clothing, put out a post on Facebook to followers asking for ideas on what parents were doing for social quarantining. The comments inspired a blog post that lists 90 things you can do with kids. The post has been shared more than 30,000 times and got the brand picked up for a local news segment.
Brands with decreasing sales report that they are concerned with paying staff. They are resilient and willing to stick this out but are unclear on when things will turn around which makes them wonder if they should consider taking on loans, laying people off, or just hanging tight.
Some brands have reported that they’ve stopped trying to sell their current product right now and are thinking about what else they can do. A swimwear brand in Canada explained that their sales are going to be hard to increase as they are a seasonal brand and travel, which triggers sales, is halted. Instead, they are brainstorming new products they could create to better suit the times. Sometimes, necessity is the mother of invention.
Brands with flat sales report that they are nervous about consumer confidence. It seems like these brands sell non-essential items but are loved and valued by a niche of customers (e.g. jewelry). They report that the longer this containment continues, the less confident they are that their sales will stick around.
Some brands are increasing their safety protocol and communicating it with customers. Niv’s Bling reports, “we’re marketing to our customers that we’re taking COVID-19 seriously and are upping our health and safety protocols.”
The big takeaway from yesterday’s survey is that the change in business is varied – brands that are up are up in some cases over 100% since last week and brands that are down are down in some cases more than 40% since last week.
Of the 116 respondents, there are more brands making less revenue than yesterday – 64% of respondents reported making less money compared to 56% on March 17. The same share of brands reported making more revenue, so it seems that brands who were flat before are now in the red, week over week.
Brands are reporting concerns over their future supply chains. We are hearing reports that some domestic third party logistics providers have reduced staff which could contribute to longer than expected fulfillment time.
Reports suggest that Ad Budgets are being reduced. Brands who are committed to spending more are continuing to spend more. More brands report reducing their ad spend to conserve budget where it makes sense for them. Brands that are selling more are afraid of potential inventory issues in the future and brands who are selling less are trying to conserve cash to keep their employees paid and lights on.
Brands are concerned that warehouses and 3PL may not stay open in the future, preventing them from being able to fulfill sales. We’re not sure if this is true so we’re going to dig in more and share what we learn.
Some brands that are doing well feel guilty, that their success comes at the misfortune of so many.
People are focusing on community above all else. Alison Sheehan of Gym Plus Coffee is massively focusing efforts on engaging their community. They traditionally host events all around the world to engage with their followers, but cannot due to COVID-19. They’ve changed their tone and moved online: her best performing email and social content revolved around their mantra, “Community to us is a social unit, not a gathering.”
For people making more, they’re making much more
Nearly half of the brands who report higher sales are seeing 30%+ week over week revenue growth. Some brands told us they are making more than 100% week over week. “Our family owned pet food business is WAY up seeing our best week ever!”
Concern grows over supply chains
Compared to the 39% of the entire sample who believe they’ll have supply chain issues soon, 50% of brands making more money think they’ll see issues soon. Their biggest concern is that warehouses and 3PL companies may have difficulty operating at full capacity. They’re already running on skeleton crews and if the virus spreads and the government gets more involved, it could mean trouble.
A few brands that are doing well are feeling lucky that they had imminent plans, before the virus struck, that caused them to stock up on inventory. One brand was planning to open a new store. Those plans have changed, but they now have additional items to sell. Another brand was preparing for Mother’s Day and had submitted inventory to Amazon two days before their ban on “non-essential items.”
Brands appreciate the power of running lean and have a newfound motivation to run a tighter ship if they make it through these uncertain times. This means brands might focus only on selling products that work, running a lean team, and reducing spend on ads before they know they’re effective. But, there’s a lot of uncertainty around how long this will last and if people will get the opportunity to run their businesses differently.
The only consistent theme is the focus on transparent communication with customers about governmental regulations and supply chain implications (if businesses know for sure what they are). Additionally, people are already preparing themselves for what to do when this passes.
Web traffic is decreasing due to waning consumer interest and decreased ad budgets
Brands are slashing ad budgets to conserve cash which is leading to significantly lower web traffic. 72% of the brands surveyed report lower web traffic, while 34% of them report a decline in web traffic of 30% or more week over week. 64% of these brands have cut budgets partially or entirely since this pandemic hit.
Ads are becoming even less efficient
77% of these brands report ads being less efficient, compared to 64% yesterday. It seems that increase is coming from brands that previously said that ads were equally as efficient as before.
How are they feeling?
Brands with flat sales are nervous that this pandemic will persist and consumers won’t buy non-essential items. They aren’t sure how to keep people engaged and strike the balance between selling goods and building a community. They’re looking for some confidence in when this epidemic will end so they can slate investments and make them confidently.
The big takeaway is that business is tough, but not for all. There is concern across the board on supply chains, today and in the future but a strong sense of hope and determination from brands of all sizes.
Of 202 businesses, 56% of businesses report that their sales are going down. Interestingly, 20% report that their sales are going up.
These brands are generally optimistic but are very nervous about supply chain issues. They are worried that if manufacturers, fulfillment centers and shipping companies can’t keep up, they are going to struggle massively.
Not trying to taking advantage of this difficult situation but rather focusing on providing customers value through stories, insights or ideas that they can use in this new world. Sharing them through email and connecting with their followers on social is having solid engagement. Additionally, Google Ads appears to provide a more solid return than historically.
Items people need at home are selling
Of the businesses that are growing, they primarily sell Healthy & Beauty products and Food & Beverage products. Generally, this maps to what people need when they are staying home.
Web traffic is going up
Most web traffic is going up or flat and it seems that consumers are getting there less through Facebook and Instagram ads, more through direct or Google ads. This speaks to consumers potentially being intentional about their purchases. Makes sense since suddenly everyone needs to work from home and has new needs.
Inventory is facing supply chain issues
Already, almost 30% of businesses with increasing sales cannot get the inventory they need. We’re not sure why.
Ad spends are actually rising
20% of these businesses are seizing the opportunity and spending more on ads. They report that ads are as efficient or more efficient than before. We’re hearing that CPMs are way up, CPC are consistent and conversion rates are consistent. It seems like business as usual for these brands.
People are nervous but hopeful that this pandemic will be short-lived and things will return to normal. There’s a real fear that the longer this lasts, the harder it will be to sustain lower sales – this could lead to laying off staff, not being able to pay bills and potentially shutting down.
Brands have found success in resetting their sales expectations and changing their focus. Investing energy in relationship building with their followers and customers by understanding that this is a difficult time for people – communicating with them honestly, earnestly and in the customer’s best interest is earning them credibility. Additionally, focusing efforts on growing an email list, including through Facebook Ads, seems to be a good strategy. This will give you a renewed and connected audience to sell to when consumer demand comes back.
Apparel & accessories and non-essential items are being hit hardest
Of the businesses where sales are decreasing, the largest category is by far Apparel & Accessories.
Web traffic is going down
There’s obviously a strong correlation between reduced web traffic and reduced sales. We’ve talked with founders who have reported as much as 30%-40% reduction in web traffic overnight, which has also corresponded to their sales.
Access to inventory is becoming an issue
Supply chain is an issue across the board. 30% report not having all the inventory they need. This could be due to Amazon shutting down fulfillment of non-essential items or manufacturers in Asia being slow.
Ads are less efficient and budgets are being slashed
Brands are reporting that ads are less efficient and it’s starting to have an impact on their ad spends. More than 50% of brands are reporting that they are reducing their spend or have cut their ad budget entirely.
Brands with flat sales are very much in “wait and see” mode. They are most concerned with the logistics and shipping companies keeping up and what happens if they can’t. They really want to understand more about what consumers are thinking and feeling so they can communicate and connect better.
Connecting with engaged contacts on email and social is working, as a way to drive sales, build stronger relationships and stay connected.
Mix of most benefited and affected categories
Brands with flat sales tend to be made up primarily of the biggest categories of those brands that are making more (Health & Beauty) and those that are making less (Apparel & Accessories). We can guess that they are some of the weaker and stronger brands, respectively.
Web traffic remains consistent
Web traffic generally appears to be solid, staying flat or increasing.
Business as usual on the ad spend front
And for these brands, it’s very much a wait and see.
