Covid-19 and most impacted sectors

Article written by Brieuc Triffaux, consultant

How is facing your sector to Covid19? (Traffic and transaction wise)

After more than 1 month in quarantine, what is the impact of the Covid-19 on digital marketing? What are the key trends and the most impacted sectors?

As an example, Loop Capital Markets statisticians said the giant Google should expect to see a minimum of 20% drop in advertising revenue compared to 2019 for the hardest hit sectors.

They observe the same trends for Facebook. Actually, the drop-in ads budgets already observed in recent weeks in different sectors (such as travel, retail and entertainment) should represent a negative impact of up to 45% on Facebook overall revenues.

How are sectors impacted by these changes in consumer behaviour and how do they manage?

During this crisis, we all see 2 big trends in different industries:

  • On one hand, some sectors are impacted negatively due to quarantine and suffer from it.
  • On another hand, some sectors adjust their business model or totally reinvent them to take advantage of this situation.

In most negatively impacted sectors (events, restaurants, travel and tourism), we observe a drop-in transactions and traffic. Others (drive, catering delivery, hygiene and health players or even general e-merchant) welcome a spectacular increase in traffic and transactions due to a demand from Internet users, reduced to confinement. The continued activity of logistics and delivery platforms will also play a crucial role in the pursuit of this growth.

Under confinement and with the obligation to reduce our trips to the strict minimum, it is the players in online entertainment such as distance learning platforms, music, games or streaming who benefit from the traffic brought down from closed stores to the web, with an increase of around 20% since the start of 2020.
Let’s see now in depth the most impacted sectors.

Most impacted sectors by the Coronavirus and how they manage this crisis :

Travel & Tourism

Tourism comes in pole position among the most negatively impacted sectors. This is due to the closure of borders, the confinement of populations in several countries, closed holiday complexes and bitter travellers who have no choice but to cancel their trips for lack of means to get there. Contentsquare recorded a decrease in transaction around 78%, when overall purchases on the travel and tourism websites were -91%.

In response to this, travel companies decided to temporarily stop their activities (see airline companies) to freeze their costs.
Events generating thousands of attendees have been reported instead of cancelled to avoid massive reimbursements (see Tour de France, music festivals, artist tours…)

Restaurants

The restaurants are also hit very hard. Due to quarantine, restaurants are closed which has a negative impact on their revenue. Furthermore, they also missed the Easter holidays period.

To counter the trend, some of them reviewed their business to provide website & phone reservation, downloadable menus and of course food delivery.
Others subscribed to existing platforms (more than 200 new restaurants/local trades on Deliveroo platform in Belgium) to benefit from the well-known and expertise of such applications.

Fashion & Luxury sector

If fashion retailers did honourably at the start (+ 7% conversion rate), the trend has been reversed in recent days with traffic decreasing of 4% and transactions drop of 2%. As for the strengthening of the immune system via sport, people do not seem to particularly believe in it because retailers specializing in sports equipment are in freefall approaching -10% in transactions number.

To counter that decrease, some new partnerships emerged. See Decathlon products in the Delhaize stores for instance.

Bank & Insurance

According to the analysis, the bank & insurance sectors continue to grow during the Covid crisis. We can also see a consequent increase in online transactions (+52%). The previous crisis let us know that in difficult times, people refocus on primary needs. Saving money and investing in personal insurances is a defensive well-known approach in that kind of period.

Home furnishing Do It Yourself

After a month of quarantine, it seems that people adapt their lifestyle and tend to think about DIY realizations. They make use of this quarantine to realize some works in their home, to tinker, etc. This leads to an increase in online DIY furnishing shopping of 167% in terms of transactions.

Retail tech

We could also see an increase in traffic (+32%) and transactions (+93%) in retail tech which is explained by people staying at home. Indeed, some people want a secondary screen for home working, a computer/smartphone to make video conferences with their family, others want a new television to watch series on Netflix…

Mass distribution (Supermarkets)

While today consuming in supermarkets is more of a test for Koh-Lanta than for traditional shopping, we are not surprised to see absolutely positive statistics for players in mass distribution and general e-merchants (Amazon, Cdiscount…). The delivery company DPD manages growth from 20 to 30% in deliveries since the lockdown. Supermarkets on their side see 3 times more online orders compared to before the crisis.

Health Sector

Unsurprisingly, the overall health sector has seen a predictable increase of + 51% in traffic.
There are pharmacies here, but also e-shops specializing in health products (survival kit, mask, hydroalcoholic gel, disinfectant products, etc.) and also para pharmacies. Their site visits benefited from an increase of + 51% and it is interesting to note that although the traffic was higher (-23% of browsing time), the number of online transactions decreased by -5%. Internet users, therefore, seem to have very intentional profiles with a specific product search at their head but certainly purchase these products in offline pharmacies. It could also be explained by the stabilization of the crisis and the quarantine which means less contact than at the beginning of the crisis, then fewer healthcare products consumption and then fewer online orders for healthcare products. These numbers will certainly keep growing during the post quarantine period as people will have to be more careful about hygiene and health authorities’ recommendations.

Conclusion

If some companies have chosen to freeze their activities when the stores are closed and the difficulties encountered in terms of transactions/conversions, the Coronavirus can also represent a real opportunity to reinvent itself and develop digital uses for consumers.
Indeed, the challenge around which brands must now reorient their strategy is to find new devices and experience to compensate for the loss of turnover through forced digitalization of their audiences. It is, therefore, time to reflect in order to stand out and remain visible on the market, as much as in the preparation of the post-crisis recovery strategy which will have to be especially ambitious, depending on the degree of impact on your sector.

For more than 20 years now, Beijaflore has accompanied worldwide companies to elaborate and implement dedicated strategies. Do not hesitate to contact me or my colleagues if you need support.

Sources :
L’impact du Coronavirus sur l’e Commerce en France : baromètre Contentsquare — update #3, 2020

Author : Pierre Sommer

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