How Covid-19 health crisis is transforming consumer behavior (Part 1)

Purchase behaviors have changed

The global health crisis related to the COVID-19 pandemic has yielded economic uncertainties that are far reaching. The retail industry is particularly hard hit as many brick & mortar stores have either (temporarily) closed doors or receive significantly less foot traffic if they choose to remain open.

Shopping habits quickly shifted online, and digital commerce is providing a much needed lifeline for affected brands selling either via reseller partners or their own ‘direct to consumer’ channel. That said, in speaking with our Brand clients, the boost in online sales does not (yet) compensate for lost revenues in their physical stores.

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. 

To discover whether consumers are changing their behavior as they adapt to a ‘new normal’, Autheos analyzed session-level activity collected across our network in Belgium and The Netherlands during the period Feb 1 – April 5. Behavioral activity analyzed relates to site page navigation, video viewership and conversion events. 

What the e-commerce shift means for brands and their future

For most brands, this consumer shift towards online consumption requires reorienting their marketing strategy in order to target and connect with audiences, in a meaningful way. Depending on the breadth and maturity of their digital marketing practices, this comes more easily to some brands than to others. No one knows the right approach in this environment, including Autheos. 

But we do know that knowledge is power, particularly in situations like this that evolve at breakneck speed.

This is the first of what will be a series of posts in which we share interesting discoveries around new consumer behaviors and traffic patterns. Hopefully, you will find them to be, above all else, helpful!

Three dominant trends have emerged so far

As countries around the globe are in various stages of lockdown, the Netherlands government took its first major steps to achieve social distancing on March 15. As part of these measures, schools and childcare centers are closed, as well as bars, restaurants, sports clubs and gyms. Additionally, professionals in non-essential functions are working from home.

On March 31, those measures were extended until the end of April, at least. With another 4 weeks of home working and home schooling ahead, we were curious on what effect this news had on purchase patterns now that the ‘new normal’ is sinking in for most.

Some of the findings from our deep dive were unexpected.

For instance, the period of ‘acclimation buying’ seems to have peaked, with March 31 as a clear demarcation point. You will notice in most of the graphs a spike period from March 14 (‘anticipation buying’ behavior ahead of official announcement) until the end March / early April.

Though the data covers just 5 days in April, there is a very clear downward trend towards normalized levels. It will be interesting to see how these behavioral trends develop in the next 2-3 weeks (we continue to monitor).

1. Spikes in traffic benefit groups of categories along specific themes

Consumers browsed items to create a cosy space during social isolation.

With public spaces, restaurants, offices, schools, gyms closed it meant that people would be spending a lot of time at home. It seemed to be a great reason to run out and purchase Air fryers and deep fryers, apparently. Comfort cooking!

Also, the weather in Belgium and Netherlands has been uncharacteristically mild and dry during the last month (thankfully!), and many folks seemed determined to start up those home DIY projects.

Consumers looking to create a cosy space while social distancing

Get bouncing!

What else is perfect for the home in beautiful weather? TRAMPOLINES!!! Trampolines category realized insane 17x traffic bump (1700%) since, it’s great for entertaining kids and adult exercise! We separated it into two graphs to properly illustrate the trend for this niche category.

When we include the ‘Trampoline’ category, the ratio of traffic spike (17x normal traffic) is obvious. Get bouncing!

Consumers sought items to keep themselves (and their children) busy

Reality set in immediately after the announcements on March 15 that folks would be home at least until April 5 (which has now been extended in Netherlands to April 30. With schools closed and gyms closed, some new toys for all ages were on the browsing lists!

The books category experienced the largest ‘browsing bump’, peaking at almost 5x normal traffic levels.

Trying to keep themselves (and their kids) busy and healthy

Consumers taking care of essentials for their dependents

The trend started a bit earlier than the official announcements for some categories, one example being the Pets category, which experienced an extreme spike of almost 8x normal volumes of browsing visitors.

The Baby, Mother & Child category experienced a shorter and more muted effect; perhaps the fact that the most essential supplies (e.g., diapers, baby food) can also be found at pharmacies and grocery stores, which are excluded from the store closures.

Taking care of essentials for dependents

2. Sudden intent to purchase observed in certain categories, despite unchanged visitor browsing patterns

We noted a truly interesting trend where no changes were observed in the number of visitors browsing during the entire period, but the number of conversions spiked. We think this is because in most cases, these are expensive purchases that are ‘nice to haves’. Once the self sequestering began, people decided to treat themselves and ‘pull the trigger’ on the purchase they had been window shopping for months.

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.

Mobile & tablets experienced an almost 10x spike in absolute conversions despite no change in visitor traffic levels.

Contrasting example where conversion trend follows spike in traffic pattern.

Toys category follows expected pattern where number of conversions follows same trend as visitor traffic

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

Consumers viewed videos at same rate, but impact on conversion was multiple factors more pronounced for specific categories where additional information was required to increase purchase confidence. This trend was especially evident in child related categories, such as ‘Toys’ and ‘Baby, Mother & Child’.

Note that for this analysis, the products in category were limited to those with videos available for viewing. The black line represents percentage of visitors who watched a video; the percentage of visitors watching videos in these categories increased by approximately 50% for the Toys category and remained steady for the Mother, Baby & Child category, when compared to the baseline index measure on 1 February.

The more interesting trend to mention is the more amplified effect of video on the purchase confidence during this period. For certain categories, such as ‘Toys’ and ‘Mother, Baby & Child’ shown in the graphs below, conversion rates of buyers watching (at least one) video was already higher than those buyers who didn’t watch a video. During the period after the government measures, this relationship effect was more pronounced, with 6x factor higher conversion rates in the ‘Mother, Baby & Child’ category for those who watch video prior to purchase.

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

What can you take away from these insights?

There is currently an urgency for businesses big and small to reevaluate their approach to consumer experiences as well as find ways to differentiate themselves with more meaningful, contextually relevant content.

Brands can make this content shift and navigate through dire times by focusing on quality product and marketing videos. With the first wave of buying online almost over and the initial panic of the pandemic slowly decreasing, people are now increasingly adapting to the work from home reality for the foreseeable future. During this upcoming period (whenever it ends), individuals will be relying on product content to gain what they lack when shopping online — the physical examination of an item.

Video has been one of the best performing content forms for quite a while and is becoming more relevant now than ever before. By watching product videos consumers can get the best depiction of how a product looks, feels and what functionalities it has to offer when shopping online. This type of experiential content is more effective than relying on photographic imagery alone.

In return, as this affects how shoppers behave online now, this will also alter how they continue to purchase in the future, regardless of the circumstances.

Stay tuned for our next post from this series which will focus on strategic data-inspired solutions to the proposed challenges of this blog post.

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.