How Covid-19 health crisis is transforming consumer behavior (Part 2)

Figure: Number of daily conversions (cross-network all categories)

In this follow up to our first COVID-19 themed trend report, published in April 2020, we revisit the preliminary findings on how consumers were adapting their shopping behaviors in the first weeks of government imposed restrictions to curb the spread of COVID-19.

Recapping preliminary trends of the lockdown ‘acclimation period’

The initial shock of COVID-19 lockdown measures facilitated a significant change in buying behavior. Globally, the retail industry suffered due to brick-and-mortar closures (permanent or temporary); businesses had to adapt quickly and focus their attention on e-commerce in order to survive.

Once the gloDuring the initial shock, we decided to look into our data sources and tried to spot emerging patterns. Autheos is in a unique position to interpret and predict online consumer behaviors, given the nature of our video intelligence platform and the high volumes of data processed for our clients’ consumer-facing sites.

Looking at consumer behavior once the global lockdown took place, we noticed the following 3 trends:

1) Spikes in traffic benefited groups of categories among specific themes

2) Sudden intent to purchase was observed in certain categories, despite unchanged visitor browsing patterns, and

3) Video had more impact on conversion during this period of ‘acclimation buying’

This time around, we’re looking into the aftermath of the initial shift in shopping behavior and how the progression of the COVID-19 situation has affected the shopping behavior of people. We’ve compared data about e-commerce shopping behaviors from pre-COVID times to use as a benchmark, the peak for when lockdown measures first took place, and data from a few months into the lockdown.

Three dominant trends have emerged so far

After taking a deep-dive into our data sources we tried to narrow down our findings to 3 major trends that are most prominent. 

1. New baseline for video views AND conversion rate, corresponding to higher revenue levels

More video views = More engagement —> More sales.

Last time around, we reported that video had more impact on conversion during this period of ‘acclimation buying’ compared to pre-Corona e-commerce shopping. A logical connection, given that product videos quickly became the only way to gain a good idea of a product’s look, feel and functionality. When revisiting this analysis three months into the global lockdown, we were curious to see whether this trend persisted.

2 patterns stood out.

Last time around

  1. During times of high peaks in e-commerce, (think of holidays like Christmas or in this case an unexpected pandemic and global lockdown) people tend to rely more on video before purchasing something online. 

  2. Even after the initial corona-shock, this reliance on video is still higher than in the pre-corona era, even with governmental measures for the lockdown that are loosening significantly worldwide.

Take a look:

Daily visitors to product websites after the initial Corona peak have increased by 80% and daily conversions by 71%, in comparison to pre-Corona levels.

This is a significant impact that already hints at a permanently altered consumer behavior. Here in the Benelux, stores have mostly reopened, and even though safety measures and concerns are still in place, consumers seem to have made a commitment to e-commerce.

Another interesting finding is that the people who watched video ended up spending more time watching videos, with an increase of thus cem at a greater propensity for consuming video content as consumer interest.

The graph below shows the percentage of visitors that watched a video AND converted afterward.

Consumers looking to create a cosy space while social distancing

The explanation for that is that 1) during the peak of the pandemic, people were physically unable to go to stores and see products for themselves which left them heavily dependent on the visual presentation of products online.

Research has also found that product videos are extremely effective when it comes to drastically increasing conversion in e-commerce. Organizational houseware e-tailer StacksAndStacks.com reported that visitors were 144% more likely to purchase after seeing a product video than those who did not. Also, using just images is not as effective as they don’t have the same capability to show off a product like a video does. 

When it comes to 2) the period after the initial shock, we can agree that since things are not yet back to normal (and probably won’t be for a while), people are, on one hand, looking out for their own safety and are not rushing to stores. On the other, they are now used to online shopping and are generally happier with this type of shopping experience. It’s more convenient, it’s safer and it saves copious amounts of time. What’s not to like!

From a behavioral standpoint, a new habit has now been created and since the benefits of online shopping are becoming more prevalent than when shopping on foot, purchasing from e-commerce platforms is becoming a game-changer for many. Hence, resulting in more video streams, higher engagement, and higher revenue. 

2. Toys category shows signs of a ‘second peak’ after initial shock led to a new post-corona baseline

Toys continue to be one of the most popular e-commerce categories.

When looking at different categories, we can separate them into groups that:  

  • follow the general trend: first experienced corona-shock, followed by a ‘new normal’ (that’s higher than pre-corona baseline)

  • show a delayed effect: the real impact did not happen instantaneously but is visible over a longer period of time. No signs of stabilization yet. 

  • went back to pre-corona level: corona-shock, but things went back to pre-corona level afterward

One of the categories that has benefited greatly is the toys category. With our previous report, we found that during the initial shock the percentage of visitors watching videos in the Toys category increased by approximately 50%! This steep peak was explained by the fact that parents who were going to suddenly be spending all their days with their children while working full-time wanted a way to occupy the little ones in entertaining ways. 

We also found that conversion rates of buyers watching (at least one) product video in the Toys category was already higher than those buyers who didn’t watch a video.

Interestingly enough, that trend remained stable throughout the lockdown period and continues to be such even as measures are looser and children are now allowed to play outside or even return to school. This cannot be said for all categories (see graphs below). All in all, we’ve seen that within the Toys category the conversion rate with video is 3x times higher than conversion without

Overall, we see that there’s more traffic, higher playmates and  a higher number of video plays. That is partially explainable but what becomes obvious is that people who would normally watch, now watch even more video. That is evident in the toys category and shows the significant commercial impact video has on decision-making process when it comes to purchasing.

This is an example of how higher percentage of shoppers in the Toys category click “play”.

There’s a greater sense of engagement so users are shown more videos because they are more involved and interested in a category, very much like the toys category. The toys category is an excellent example of how shoppers that click “play” on product videos watch even more videos during their shopping visit.

Shoppers that click “play” on product videos watch even more videos during their shopping visit.

Towards the end of May, we’re even observing a second peak in e-commerce purchases for the Toys category as a follow up to the new post-COVID baseline that was already higher than the pre-COVID one. 

Sound and vision category – consumers finally decide to pull the trigger! Almost 5x increase in number of conversions though no spike in traffic to this category was observed.

To give you a specific example of how this trend has benefited a particular brand, we can show data in the graph below about Nintendo. In the 20th top played videos through the Autheos platform, we have found that Nintendo Switch is one of the top 3 videos shown (#3 to be exact,and the #1 spot is taken by dog toys). 

The current uptake in the toys category in e-commerce is heavily impacted by product videos as they directly impact the decision making process of buyers. Their commercial impact shouldn’t be underestimated. 

In comparison, the “baby – mother and child” category went back to pre-COVID baseline.

3. Early evidence suggests a persistent change in online customer behavior

We’re 3 months into the global lockdown and with measures loosening, many expect to see a decline in e-commerce purchases. While that would be absolutely normal and is expected, what we can already see is that despite numbers going down at a gradual pace, early evidence suggests that there will be a persistent, long-term change in online customer behavior.

Toys category – notice more pronounced effect of video impact on conversion numbers during the ‘acclimation buying’ period mid – end March.

That makes sense. After realizing the convenience e-commerce offers, it will be difficult to go back to normal brick-and-mortar shopping and receive the same benefits. Even if customers decide to diversify their shopping habits and switch between online and offline shopping, the pool of e-commerce shoppers has now widened significantly simply because they had no other way of purchasing certain items during lockdown.

Next to convenience and removing the hassle, plenty of people are still taking necessary precautions to stay safe and avoid unnecessary activities around other people. Shopping offline might be considered as one of them. Given that it will be a while before there is a real solution for COVID-19, we can conclude that e-commerce will continue to win over shoppers.

It’s important to note that categories show different customer behavior trends and do not always follow the ‘general’ pattern. For example, we see that there’s a ‘new e-commerce normal’ for a category like Sports, yet things seem to have gone back to ‘pre-COVID normal’ in categories like Pets.

There’s a possibility that customers now feel more comfortable to shop items from categories like Pets offline because they can easily get these products while at the grocery store or larger stores next to their home. When it comes to ‘more-difficult to obtain in your neighborhood’ goods, people may be opting in (and continue to do so) for the convenience and hassle-free experience of e-commerce.

Sports: follows the general trend

Pets: goes back to pre-COVID baseline

What can you take away from these insights?

Since the beginning of the global lockdown, e-commerce has been the leading source for purchases for customers worldwide. What’s more interesting once we dive deeper into different data streams is that without a doubt, there’s a strong correlation between video and purchases. 

Product videos have had a strong commercial impact and we can confidently conclude that people who watched a video before buying had a higher rate of conversion than people who didn’t watch a video. And it makes sense – video is the best way to show off the product and its features.  

So what does that mean for you and your brand? Regardless of which retail industry you’re in, if you had any doubts up until now about whether product videos are necessary, it’s time to scrap those. Product videos have an undeniable positive impact on conversions and now is the time to adapt to the new reality and make the most out of it. 

You can rethink your content strategy and the messaging that goes out to your clients. It’s the perfect opportunity to create meaningful content that truly represents what your brand stands for. 

The impact of such targeted efforts to integrate video on your website or reseller’s platforms and using tools to strategically show users best performing clips, will be transformational for your revenue. It’s not about staying comparative, it’s about becoming competitive. A well-utilized product video strategy can take you there. 

Stay tuned for our next post from this series which will focus on the trends and outcomes of the post-COVID reality on e-commerce. 

In the meantime, if you would like to learn more about how you can leverage our technology to evaluate and strengthen your video strategy to keep your business moving forward, get in touch with us here