Our Top Takeaways & Learnings from Virtual Commerce 2.0
On Tuesday, May 5th, 2020, we hosted our second digital conference, Virtual Commerce 2.0!
This second installment in our “Virtual Commerce” series was a follow-up to the first edition we hosted back in March as brands and investors continue to navigate the COVID-19 pandemic. In this rapidly evolving situation, we wanted to provide another opportunity for commerce leaders to share their wisdom and give others an avenue to ask their most pressing questions.
Before diving into the content, a very special thank you is in order to all our sponsors who helped make this happen: Contentful, Dynamic Yield, Gorgias, Klaviyo, Klevu, Nosto, Radial, Ordergroove, Workarea, Yotpo, Yottaa, and Shopify Plus.
And another huge thank you to our incredible moderators and speakers (you can check them out below)!
Without further ado, we’ll now share a recap of our four Virtual Commerce 2.0 sessions:
- Welcome & Keynote: State of the Current Crisis
- Panel 1: The New Normal for Commerce After COVID-19
- Panel 2: What is the Future of Physical Retail
- Panel 3: Marketing During Times of Crisis
Welcome & Keynote: State of the Current Crisis
Our “Welcome & Keynote” session on “The State of the Current Crisis” featured our own Michael Cassidy, CEO of BVA, along with Steve Nobel, Senior Partner, and Kurt Chauievere, Partner at McKinsey & Company.
Showcasing some of their recent findings, McKinsey & Company discussed what the economic recovery may look like in the U.S. in comparison to other countries, and what shifts have occurred in consumer mindsets.
According to their data, it appears that the U.S. economic outlook is more optimistic than that of many European countries, but still behind China and India. There is a very real chance that COVID-19’s economic impact could exceed anything we’ve seen since the aftermath of WWII.
Mckinsey & Company has identified two key economic scenarios that may result from COVID-19: a virus recurrence with muted economic recovery, or virus containment with a return to economic growth. Even if the virus is contained and the economy bounces back, larger economies like the U.S. and China will still suffer the economic impact for months, and possibly years, to come.
Despite those theories, U.S. consumer optimism about returning to economic growth has remained stable, and there is still a good deal of hope felt nationwide. Online shopping is expected to continue to increase in some categories, even with some “non-essentials.”
There is no doubt that the world’s largest economies are being impacted by the recession and will continue to experience the effects of the pandemic through the coming months. However, In the U.S., as signs point to increased online commercial activity, there remains hope that a return to normalcy will be sooner rather than later.
Read more about these projections from Mckinsey & Company here.
Panel 1: The New Normal for Commerce After COVID-19
There was no doubt from our panelists that COVID-19 has transformed the commerce industry. Prior to the pandemic, eCommerce was on the rise and some retailers had started to establish their online presence, but few had truly mastered an omnichannel strategy. Now, with the health crisis in full swing, digital commerce has more definitively come out on top and all merchants are finding it to be an absolute necessity.
Our panelists expressed that they’ve been seeing eCommerce traffic at an all time high. Consumers have increasingly embraced online shopping, leaving brands questioning if a digital experience would have been the key to their success all along.
The big question now, as one of our panelists raised, is whether a brand’s growth in eCommerce business will compensate for the loss of their physical retail business.
After all, many retail businesses may not even make it out of the pandemic. For those who have held both a physical and an online presence, some tough decisions will need to be made as to whether they are seeing enough of an increase in their digital revenue to make up for the fact that they may no longer have the same physical storefronts.
Another key issue facing many merchants right now is supply chain. If products are manufactured in a country, state, or even county that is still on lockdown, you may be facing challenges in gaining access to your product, much less going through fulfillment. Additionally, due to a dramatic decrease in commercial flights, most air express shipments have significantly halted.
In response to these challenges, our panelists recommend exploring migrating shipping methods to ocean shipping; looking into multiple ports that may allow you to navigate around more restricted areas is key.
COVID-19 has clearly pushed on the accelerator when it comes to digitizing commerce operations. Many are seeing that eCommerce allows them to focus on their most important objectives: putting the customer first and increasing speed-to-market.
Panel 2: What is the Future of Physical Retail?
With the rise of online shopping due to COVID-19, the next likely question for brands is around the future of physical retail.
Prior to the pandemic, we’d begun to see an increase in DTC brands building up brick-and-mortar storefronts with high-end shopping malls boasting the likes of UNTUCKit, Casper, and more DNVB’s (digitally native vertical brands) among the original retail giants like Macy’s and Bloomingdale’s.
But with the world-altering ramifications of COVID-19 and the esuing consumer comfort of shopping online, will physical retail continue to grow at all?
Our panelists brought up one of the biggest benefits to physical storefronts: to showcase products that consumers want to test out. When it comes to items ranging from apparel to specialty massage equipment, there are always going to be products that buyers may want to try in-person before committing to the purchase.
Additionally, one of our panelists pointed out the impact of physical retail, especially in shopping malls, on culture and socializing. Going to the mall to shop with friends has remained a common social practice for decades, and it’s not necessarily a hobby people want to give up.
It is unlikely that COVID-19 will be the end of physical retail, but rather a catalyst that dramatically alters the way it looks, especially as communities begin to re-open.
Our panelists hypothesize that in the foreseeable future, what will remain most important in consumers’ minds is safety and convenience.
People have become accustomed to having more of their shopping hauls delivered right to their doorstep, and they still want to limit time in public spaces.This will result in a need for brands to assure their audience that they are taking all possible precautions to protect their customers. Right now, consumers need to have confidence that their favorite brands have their best interest in mind.
With this shift, our panelists expect to see a rise in curbside pick-up and contactless payments for the near future, as some communities move into Phase 2 of re-opening. Any innovative methods storefronts can use to limit human contact and enhance customer safety will be necessary.
As society begins to re-open more permanently, the world will definitely feel the difference as many storefronts are left empty and vacant in the aftermath of business closures. But this does not mean the spaces won’t eventually be filled. Our panelists discussed the possibility of an increase in pop-up shops, a trend that was already starting to grow pre-COVID, as a way for DNVB’s to connect with their customers in a tangible way.
One thing is for sure... there has already been a large shift in the consumer mindset and retail will continue to transform in order to meet new consumer needs.
Panel 3: Marketing During Times of Crisis
Our panelists had a lot of positive updates on marketing in times of COVID-19. For many brands, they are seeing very high ROI on ad spend, and some are even reporting big leaps in performance from their marketing dollars prior to the pandemic.
When it came to advice, they recommended using caution, noting that it’s definitely a time to be thoughtful about spending resources; in other words, don’t spend in a way that puts your profitability at risk. Additionally, it’s very important for marketers to be testing every channel so that we can continuously adapt to changes.
Our panelists discussed the categories that are experiencing the highest volume of sales right now (as you can see in Klaviyo’s data here), and found it interesting to see a “guilty pleasure” trend in consumer behavior right now.
In fact, we are observing, in some ways, consumers following Maslow’s hierarchy of needs.
Now that they are past the hoarding of toilet paper and stocking up on a month’s worth of snacks, many consumers have moved on to purchases that will make them more comfortable or bring them joy. This means that apparel brands, online book merchants, and even (in recent weeks) jewelry merchants, are seeing sales growth. Additionally, spending has been redirected from eating out in restaurants to spending on items for home or food ordered-in.
What does this mean for brands and digital marketers? Well, now is most certainly not the time to stop. Yes, it is important to be mindful with ad spend, but it’s also a critical --and in some ways beneficial-- time to get on consumers’ radars.
Consumers are shedding brand loyalty and opening up to new products as they adapt some of their shopping trips from in-store to online, and as they build out new habits while spending more time indoors.
Another important consideration for marketers right now are around CSR (corporate social responsibility) initiatives. As many healthcare and essential workers forge on fighting the virus, it’s important for brands to show support to communities and those struggling. For brands who are able to give back right now, running campaigns to promote these values will help you stay top of mind and also allow you to deepen the human connection with your customers.
A big thank you to all of our amazing attendees who actively participated and brought questions to this Virtual Commerce 2.0 conference! If you have any questions about Virtual Commerce, or are interested in applying some of the strategies our panelists discussed to your own brand, please feel free to reach out to us here!
BVA is a commerce agency that incubates and grows the direct-to-consumer (DTC) brands that people love. With the largest and most versatile client roster in the industry, we’ve launched more brands on Shopify Plus than any other agency and currently manage a client portfolio that generates nearly one billion dollars annually in gross merchandise volume (GMV).