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Coronavirus effect in eCommerce: Covid-19 in Google Ads (I)

This is probably one of the blog posts we would least like to be writing. However, we believe that being able to understand what is happening in the eCommerce world since the COVID-19 crisis. Contextualized within the advertising activity, it can help to make decisions and, above all, to devise actions that help mitigate damages according to the position in which we find ourselves.
In the weeks to come, we will be sharing with you all our latest news about the trends and conclusions that we will draw from the experience of our customers. more than 150 customers with which we collaborate, taking into account that the verticals we work with are very varied and that the behavior of many of them can be extrapolated to the rest of the market.
This Saturday, March 14, 2003, the President of the Government, after meeting with the Council of Ministers, decreed a State of Alarm in our country. This was something that had been expected since Friday and, logically, has had an immediate impact on business. In this case, we are going to focus on the effect it has had during the entire week-end in e-commerce stores:

  1. The advertising investment has fallen by approximately 35% compared to previous weekends. This drop has not been determined so much by the decision of the advertisers themselves to reduce advertising efforts, but by the behavior of the market itself, which, to a greater or lesser extent, has slowed down considerably these days in the vast majority of sectors.
  2. The number of sales has plunged by 50% overall. This was to be expected given the climate of health and economic uncertainty resulting from the closure of many companies, temporary layoffs or drastic reductions in productivity. A clear example of this concern is provided by search trends related to the term "ERTE":
    Erte and ERE at Google
    Search trends in Google Trends
  3. Therefore, the revenue volume has declined by about 40% during the weekend, which has led to significant losses in the profitability of advertising investments.

Coronavirus impact by sector.

In general, the eCommerce most affected by this major downturn have been those that rely heavily on their physical store, suppliers that are not serving on time or logistics companies that are failing. Some of these examples are: workshops, gold trading, mattress stores, mattress stores, etc. and, in a generalized manner clothing stores.
But are all sectors behaving in the same way, and have all verticals fallen in the same proportion? Thanks to the analysis conducted by our team we can say that there are a number of sectors within the eCommerce world that are not being affected as much and that, in addition, they are even obtaining great results. Based on our experience with our customers:

  • Grocery stores of basic necessities and/or children's food: receive a 20% more traffic, tripling its sales volume and revenues in many cases. This may have a very clear explanation, not so much focused on the shortage (which is not occurring in physical stores) but in the fact of trying to avoid these concentrations of people.
  • Parapharmacies are obtaining increases of more than 50% in revenues for virtually the same trafficThis is largely due to a sharp increase in conversion rates. This could be due to shortages in neighborhood pharmacies or even reluctance to go to these establishments.
  • Sports nutrition ecommerce sales have been affected, but in a much smaller proportion, largely influenced by the growth of multivitamin products and flours for desserts and breakfastsThe decrease in the number of products that are more purely fitness products is offset by a decrease in the number of products that are more purely for the gym.
  • Pet stores are having a significant increase in its traffic volume, which is up to five times higher than that of the previous year. to prior periods, proportionally increasing sales volume. The behavior of these cases is very similar to that of staple food products.
  • Appliances and technology have been verticals that have been quite affected, although to a lesser extent than the average, with the following products standing out in terms of sales in their product portfolio refrigerators, freezers and electric scooters. These products are directly related to food stockpiling and mobility due to the lack of public transportation in many places (although it is true that with the State of Alarm they could fall again). There is also an upturn in home exercise machinesThe company's products and services are available in its product catalogs.
  • The online sale of children's toys has been multiplied by 4 in several cases, probably due to the greater amount of time the children will spend at home during these weeks. As for the material for adult handicrafts is also growing, but at a lower rate.
  • The ecommerce for the sale of school supplies and printing materials prevent the fall, achieving grow above 10% during this period.. We understand that the purchase of this type of product is mainly supported by household supply.
  • Hardware stores traffic increases and sales tend to increase grow over 20%mainly due to the increase in demand for disinfectants, gloves, masks, disinfectantsetc.
  • Home furniture stores maintain similar traffic rates to previous periods but their conversion rate soars, increasing in more than 50% sales volume. This trend makes a lot of sense, as everyone now has more time to assemble such furniture.

In addition to this, it should be noted that internal Google sources emphasize that the vertical most affected so far remains Travelnot only because of fewer sales closures but also because of a large number of cancellations. And that other ecommerce verticals such as the retail sector, such as the video games, has experienced a significant growth during these days.

Forecast and possible actions.

Apart from all these trends, it is important to note that during these days many businesses have suffered increases in the cancellations of previous orders, but in principle from now on the purchases that will be closed will be within the context of the Alarm Status so that this KPI should return to normal values, as long as there are no problems with shipping deadlines.
We hope that if you have an e-commerce store this information will help you understand what is happening in the rest of the sectors and you can contextualize this moment as something seasonal, and that we all hope it will pass as soon as possible.
For our part we have already deployed a series of actions and recommendations for our different customersOver the next few days we will be bringing out different publications that we hope you will find entertaining and, above all, useful!

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