How to Manage eCommerce

During COVID-19 Crisis

Actionable Strategies
Welcome! Who’s with us?
The sad reality
● The number of sick is growing.
● Predicted to cause $3 trillion dollars losses in the global economy.
● 1 million people per month may lose their jobs.

https://foreignpolicy.com/2020/03/18/coronavirus-economic-crash-2008-financial-crisis-worse/
The light at the end of the tunnel
Not everyone is losing money.

In fact, some people are trending up (not just masks, sanitizers and food).

What’s more, even within some industries that are going down, there are
outliers that seem to defy the logic.
Today we’ll cover
1. Who’s doing well and who’s not
- insider data on different industries and price points (omnichannel marketing data + supply side) so you
can plan how to diversify in the near future and learn from the best crisis surfers.

2. Crisis contingency plan

- to defy the downward trend and stay profitable even if your whole industry is considered doomed. How
to manage cash flow and unlock savings without compromising the systems you’ve built. How to generate more
revenue through strategic rethinking of your business strategy and unconventional channels.

3.Q&A
Speakers

Matt Panek Andrew George Marco Bigatton Kristian Jeffrey

Aloizio Neto
Oscar Olczak
Data Insights
Data from Facebook HQ
Facebook Ads
● Food brands -> Perfect scaling environment!
ROAS increased by 30-50%, conversions are stable, CPMs have dropped by 30-50%, which means
we can scale much faster; no supply issues, but some have trouble scaling their production team.

● Fashion -> ROAS down by 20-40%; traffic stable, but conversions are down by 50-60%; CPMs
are down 30-50%; MASSIVE supply issues; one company had to close their ecom department and
fire all of their employees overnight because they needed to hold inventory for wholesale.

● Supplements -> KEEP POURING MONEY BABY!

ROAS UP BY 40%; CPMs are down by 10-20%, CPC is down by 10-20%; conversions are up by 20-
40%; no supply issues; people are thinking about their health more, so we’re scaling up.
Facebook Ads
● Alcohol -> Business as usual
ROAS increased by 20-30%, conversions slightly increased, CPMs dropped by 10-20%; no supply
issues.

● Beauty -> ROAS climbing up by 10-30%; stable conversions, lower CPCs and CPMs; no supply
issues; perfect time for beauty.
[One outlier is face-lifting cream on the German market that saw a dip of about 20% ROAS with
no CPM decrease and an increased CPC].

● Jewelry (high ticket) -> ROAS down by 30-50%; conversion rates are down by 50%; CPMs are
down by 30-50%; no supply issues; people have stopped shopping for luxuries and are saving
cash in the expectation of layoffs.
Facebook Ads
● Subscription boxes -> ROAS up 20-30%; conversions are stable, but CPMs are down 20-30%;
good time for subscriptions.

● High-ticket electronics -> APOCALYPSE

ROAS down by 20-40%; CPC is stable, but conversions are down big time; CPMs decreased by 30-
50%; one company had to temporarily lay off 85% of their staff and on top of that, they were
legally obligated to continue paying for TV ads that yielded ZERO effect.

● Pet accessories -> ROAS up by 20-30%; conversions are stable, but CPMs are down by 20-30%;
some supply issues.
Facebook Ads
● Discount retail -> Living the dream!
ROAS increased by 20-40%; conversions are stable; CPMs are down by 30-50%; some supply
issues; people have nothing against shopping for deals now.

● Travel accessories
ROAS down by 40%; CPC is stable, but conversions are down by 40%; some supply issues.

● Watches -> Some clients had to downsize their factory and move it to their employee’s house so
they didn’t have to commute. They also had to cut salaries temporarily; ROAS down by 30-40%;
CPC down by 20%, but conversions are down by 50%.
Google Ads
● Google ads numbers are very similar;
● CPMs have gone down by 10-30%, except for fashion, where they’re up by
5-10%;
● CPC has either gone up by 5-15% for brands negatively impacted, or has
gone down in line with the CPM decrease;
● Conversion rates are down by 20-60% for those badly affected.
Email Marketing
● Email open rates are 2-3x higher.
● Email CTR is the same or 10% higher.
● Email revenue per recipient is mostly stable, but there’s less new traffic and
fewer new subscribers.
● Campaign revenue is up for the brands that use frequent contextual
messaging related to the crisis.
Organic Search
● Organic search revenue is down by 10-30%; search volume is down (e.g.
jewelry) by 70%;
● For fashion down by 15-40%;
● Supplements: search volume down by 5-20%, but organic search revenue is
up by 10-20%.
Summary of Data
● We’re seeing a consistent drop in CPMs -> People sit at home and there are more
eyeballs on social media, so competition on Facebook auctions is lower.
● Consumers feel uncertainty due to the probability of layoffs and have stopped
spending on luxuries and travel.
● People are still bored, and they will not hesitate to buy cheap items, things they’d use
at home, entertainment, and feel-good products such as beauty or home fitness gear
online.
● Health markets are living the dream as consumers have become super health-
conscious.
THE MARKET IS NOT STAGNANT.
People are still spending money; They just spend it on different product
categories. This is where the opportunity lies.

If you’re on the lucky side of the spectrum, great! Keep scaling up and stockpile
as much cash as you can.

But if your brand is on a decline, don’t panic.

We’re already seeing some positive bounceback.

Also, crisis is an opportunity to maximize efficiency, get lean, and get ready to
come back stronger.
But what now?
How do you act to:

1. Not run out of cash and

2. Actually keep making money and possibly make more?
What NOT to do
There’s a lot of advice floating around that goes like this:

“Hey, CPMs are going down, so just keep advertising. Stay on people’s
minds. Once they’re ready, they’ll buy from you.”
There are a few flaws to this thinking.
1. Yes, CPMs are down, but so are conversion rates. Only large corporations can afford
to burn through branding budgets that do not yield returns and do not run into cash
flow problems. Most SMEs will need a strategy that fulfills not only their long-term
growth targets but also their short-term cash flow needs without the need to
leverage debt in these uncertain times.

2. Low CPMs will benefit in the short-term only the product categories that consumers
are currently buying. You’ll need to refocus what you’re selling (to whom and how)
before you decide to ramp up your ad spend.
Master Crisis Framework
Crisis Framework
1. Cash flow plan: Fix cash flow holes & reduce costs while having a long-term
picture in mind.

2. Market plan: Diversify revenue streams, restructure your product portfolio,

refocus branding, and redistribute marketing budgets.

3. People plan: Work with your team and strengthen your company culture.
Cash Flow Plan (costs out)
Cash Flow Plan
Reduce fixed costs:

● Explore automation opportunities within your admin tasks, manufacturing,

fulfilment, marketing and sales.
● Downsize the production line, if feasible (e.g. one of our clients moved their
production line into their apartment temporarily).
● Work with your team to take a solidarity’ pay freeze/cut depending on whether you’ll
need them to work or not. If you’ve built a strong culture, your team might be more
than willing to help you out because they’ll know that for the long-term, you’ll have
their backs too.
● Switch to non-fixed fee fulfillment centers.
● Eliminate all non-essential software costs.
● Restructure your marketing budget (more about that in the next section).
Cash Flow Plan - continued
● Especially if you’re selling through marketplaces, use cash flow financing
companies in order to skip the payout delay between acquisition of a
customer and payout of your cash.
● Consider switching to credit cards that provide cashback for advertising
spent. You can get up to 10% of your spend back to reinvest into other
activities. Research credit cards that pay for ad spend upfront and you pay
later.
● Reduce inventory through discount promotion campaigns. If needed, run
twice a week “25%+ off everything” campaigns via email like All Saints.
You’ll unlock plenty of much-needed cash.
Cash Flow Plan - continued
● Negotiate delayed payments with your suppliers. They’re most likely
suffering too, and they might be more than willing to help you out in the
short term for the sake of long-term relationships.
● To avoid layoffs, work with a mix of in-house teams and contractors.
● Consider your position on delaying rental payments for commercial
properties, working with your landlord, especially if your government has
recently brought in some business protections for the crisis period.
● Specifically for expensive software: “Ask corporate software companies
where you have a high-cost subscription for a month or two holiday on the
fee if you need it.”
Market Plan (Revenue in)
You can’t just save your way through the crisis
There’s only so much that you can save without destroying the systems you’ve
built in your business.

You want to reduce the need to compromise the long term for the short term as
much as possible.

To do that, you’ll need to find creative ways to generate more revenue.

Market Plan
● Product Strategy
● Brand Strategy
● Channel Strategy
● Offer Strategy
● Messaging Strategy
● Lifetime Value
● AOV
● Conversions
● Traffic
● Data Attribution
Product Strategy
If your product category is not what people are buying right now, this is the
time to launch a new product to diversify your portfolio.

Focus on the lower-ticket items, stay away from luxuries, and above all, try
products that relate to the coming season that people will need despite the
crisis.

Example: For our luxury watch brand, we’re selling cheaper sunglasses (summer
is coming), earrings, and bracelets.
Brand Strategy
Crises affect poorer demographics more severely, while more affluent groups
(despite some short-term hesitation) will quickly get back to purchasing
products within the luxury category.

Consider targeting customers with more disposable income using high-end

branding with products of highly perceived value and use ad targeting to laser
into customers who tend to spend more.
Channel Strategy
Offline retail needs to push online more.

Brands selling through their own branded websites may consider diversifying
their sales channels onto marketplaces, such as Amazon.

If you’d rather not cannibalize your brand by competing on Amazon, consider

launching separate lower-end brands for marketplaces only.

Results: A crisis-proof portfolio consisting of some high-end products and some

low-end ones.
Offer Strategy
Even if you don’t typically like to use discounts in your strategy, strategic discounting is a
tool you may want to employ short term in these extraordinary times to get rid of excess
stock and sustain sales.

Don’t mention it’s a crisis sale. Consider running Black Friday-style store-wide tiered
discounts (e.g. over 100 USD, free shipping; over 200 USD 10% OFF, over 500 USD, 20%
off).

Make sure you and your marketing team are all clear on your Profit per Sale metric,
including and excluding discounts, and set clear ROAS targets that take profit margins into
account.
Messaging Strategy
● Make it relevant - Focus on staying at home and what pain points people have there.
● Entertain bored scrollers while keeping their focus on the product.
● Give away profits to charity and emphasise that.
● Try UGC content of people at home as ads.
● Don’t mention the virus -> you’ll get banned.
● Be transparent with customers about shipping delays to avoid negative feedback
(turn it in your favor).
● Add a banner: We’re still delivering, disinfected packaging, contact-less delivery. If
feasible, make all deliveries free. This banner increases conversions across all of our
brands.
● Audit all your communication to make sure you’re not saying something off.
Increase LTV - Monetizing Customer Lists
● Intensify cross sells of other product categories in your store -> For example,
leverage %-off deals and test bundles. Use email marketing and push notifications.
Increase frequency of mailing and reduce segmentation.
● If you already have a large product catalog, consider launching a mobile app with
weekly/daily deals -> Builds massive brand loyalty + push notifications = free
advertising. Shopify apps such as Shopney can (in minutes) turn your Shopify store
into an app.
● Turn your customers into affiliates. Everyone will want to make some cash soon and
you and your customers can help each other out. Make sure that the program
communication fits your brand and you’ll soon see a nice influx of brand ambassadors
that don’t require any additional costs.
● Take advantage of SMS sequences and push notifications.
Increase LTV - Monetizing Customer Lists:
● Consider joint ventures with other brands that are on the rise whose
products are in line with your brand and who sell to the same audience.
Reach out to them, strike a % rev share deal, share pixel data, and plan joint
communication. In exchange, they might also sell your product to their
audience, which could become an interesting new acquisition channel.
● An additional twist could be researching offers that compliment your brand
on affiliate networks. Find an offer that suits your audience and launch it to
your customer lists via email and paid ads. Your audience will thank you for
more diversity of products and you’ll sleep well knowing that you’ve just
diversified your revenue streams.
Increase Average Order Value
The more you can make back on each acquired customer, the easier it will be for
you to counteract the decrease in conversions. Use various upselling strategies,
cross-sell apps, and plan high AOV bundles.
Maximize Conversion Rates:
● For the short term, add a website banner emphasizing that you’re still delivering
products. If feasible, make all deliveries free. Mention where your products are
manufactured (unless it’s China). Add: disinfected packaging and safe contact-less
delivery. This banner increases conversions across all of our brands (it’s hard to
calculate by how much, as we didn’t split test it, but it was definitely a solid increase
of 10-20%).
● Use cart abandonment emails, SMS sequences and push notifications extensively.
● Activate longer time frame retargeting lists on low budgets via Facebook and Google
ads (also Adroll or similar, if possible); e.g. use 180 days retargeting audience (even
use reach or engagement objective to further lower CPMs) and run discount
campaigns (this will help reduce inventory and bring additional income).
Maximize Conversion Rates:
For the long term, implement a full-conversion rate optimization program with A/B split testing in
order to maximize the efficiency of your traffic.
Just one additional visitor for every 100 converted into a customer could double your sales!

For the short term, optimize for revenue opportunities:

1. Implement Post checkout upsells

2. Cross sell at every opportunity with bundle offers and Frequently bought together offers
3. Email traffic is still one of your highest converting traffic sources, grab users email with pop ups
(yes they are annoying but they work)
4. Ensure your automated email flows are all in place: (abandoned cart, abandoned browse,
welcome, re-engage and purge)
Traffic
● Plan ROAS targets for the crisis; plan how much profit the brand needs to make in
order to minimize cash loss and decide what ROAS vs spend balance will be the
easiest to strike in your situation. Segment targets per product category and funnel
stage. You’ll improve your profitability and cash flow.
● You can use a copy of our sheet
● Keep profitable campaigns running and cut inefficient ones. Especially keep
retargeting but remember that on its own, retargeting without new prospecting
traffic will not stay profitable, so strike a nice balance between prospecting and
retargeting budgets.
Traffic
● Double down on high-intent channels: Use Google Search & Shopping extensively
.
● If you’re not yet on Pinterest and you sell to a female demo, this is the time to enter
Pinterest. It’s an intent-based channel and people there are ready to buy.
Traffic
Influencers: Enter word-of-mouth on steroids!
With so many fashion brands on decline, most influencers will be out of income soon. This
means there will be lower costs for running influencer campaigns!

Influencers have not only trained themselves to be master content producers, but they
have also tested what works and what doesn’t for their audience, so they can create high-
quality content for your ad campaigns.

User-generated style content converts the best!

Traffic
Push heavy on SEO (applicable to established stores).

Investments into SEO will continue to pay off for months to come.

This is especially true if you’ve already been on the market for a while, as you
can receive plenty of organic traffic.

Find an SEO strategist that you can trust (make sure it’s white hat); Optimize
your website, and start building backlinks and writing content.
You’ll be surprised how much low-hanging fruit you’ve been leaving on the
table.
Traffic
● Explore offline marketing - postcards! They’re cheap and really do provide
measurable ROAS.
● Explore clean affiliate networks that can get you traffic without you risking
any of your ad budget. Just make sure you prescreen affiliates and have
solid contracts and briefs so that they don’t misrepresent your brand.
Data Attribution
With people under quarantine, TV and digital placements will bear significantly
more attribution, while all offline banners will be significantly discounted.

Desktop is on the rise, mobile is declining.

Most digital-only brands, will likely not see massive differences in their
attribution paths, but do monitor your Google Analytics Attribution Model
Comparison tool and Facebook Attribution reports to see how your customer
behavior is changing and restructure your ad budgets and targets for your
marketing teams accordingly.
Supply chain
Use pre-orders if you cannot get inventory.

Emphasise what’s in stock and that you ARE still shipping.

Use fulfillment centers if your employees stay home (make sure you check with
them if they expect any interruptions).

If you need to scale production, it may actually be easier to hire now due to
layoffs. Emphasise work safety, arrange a car to pick up employees and make
sure it’s safety first.

Order stock (and packaging) as soon as you can - China is back to work.
People Plan
People Plan
No business can thrive without people. Your team and your culture are what makes or
breaks businesses, especially in times of crisis.

Be transparent with your team, explain the situation, and brainstorm on how you can keep
the company afloat together.

Your team will have some great ideas on how to bring new customers to the business, and
how to find efficiencies, and they will be more than willing to take a temporary pay cut in
order to help you out.

You’ll all come out of the crisis with a stronger culture and a much more efficient business.
Q&A