3 Pandemic-Fueled Commerce Trends Poised to Yield Long-Term Growth for Businesses
Brands tapped text-based shopping, experiential loyalty programs and online marketplaces to drive newfound sales amid the crisis - strategies that look to stick.
This story was originally published on CO— by U.S. Chamber of Commerce and was written by Barbara Thau.
The pandemic thrust industries from retail and restaurants to fitness and food into hyper-innovation mode, unwittingly yielding new and improved ways to sell their goods and services — from text-based commerce to online marketplace platforms — that are poised to drive business long after the crisis has (hopefully) passed.
Text-based commerce becomes revenue stream for brands
Consumers increasingly shopped from their smartphones amid the pandemic, and marketers took note, leaning into text-based commerce to earn their business.
As shoppers' email inboxes overflowed with promotional offers, brands turned to text-based messaging to break through the digital clutter and reach consumers wherever they were.
Beverage startup Iris Nova, for one, tapped its text-based ordering platform amid the pandemic to sell its Dirty Lemon line of wellness drinks— and heightened convenience — to consumers, while creating a brand-to-shopper intimacy that texting tends to foster, Zak Normandin, founder and CEO of Iris Nova, told CO— six months into the pandemic. "It's a very unconventional relationship between customer and brand that we believe drives brand loyalty."
Loyalty programs go beyond points for purchases to offer experiences and heightened convenience
Against the backdrop of COVID-19, loyalty marketing evolved beyond incentivizing shoppers to spend by racking up points they can cash in for free items or discounts.
As marketers became less literal-minded about the notion of loyalty, rewards programs from Walmart to Sephora and REI have added experiential, convenience-minded and cause-driven perks, looking to forge deeper bonds with shoppers that go beyond the transactional.
Walmart, taking a page from Amazon Prime, is now wooing consumers with its Walmart + subscription loyalty program, which is built around services like home delivery and a scan-and-go feature via its mobile app, so shoppers can skip the checkout line.
In a bid to hook consumers with memory-making activities, outdoor retailer REI now offers experience-driven membership perks, like guided hikes up Mount Rainier that are free or discounted for its rewards members.
And as consumers increasingly vote with their wallet for brands that mirror their values, more and more, businesses are linking those values to their loyalty programs.
Amid the spotlight on racial injustice amplified by pandemic-exposed inequities, the killing of George Floyd and the Black Lives Matter movement, Sephora last year allowed its Beauty Insider members to use their rewards points to donate to the national Black Justice Coalition, enabling its consumer base to apply their purchase to a purpose.
These types of efforts help fortify consumers' "emotional loyalty," a hard-to-measure yet key metric of business success, Mary Pilecki, vice president and principal analyst at market research firm Forrester, told CO—. "It's about improving the emotional status of the consumer."
Online marketplaces emerge as a (low-cost) sales channel for startups and small businesses
Direct-to-consumer (DTC) strategies have been a major growth narrative in recent years that heightened amid the pandemic, as startups and small businesses ratcheted up their e-commerce operations in light of shuttered stores and homebound consumers. Now companies are turning to direct-to-marketplace strategies to launch, grow and sell their goods and services.
Indeed, an emerging ecosystem of marketplaces from Google, Amazon and Facebook to niche sites like Market Wagon for artisanal food producers are gaining ground as platforms for brands to grow at a low cost.
These sites enable businesses to drive sales online without having to invest in a website or pay for advertising to drive traffic, as they already have a built-in audience. Brands can also sell on multiple marketplaces at once to grow their reach.
Digital marketplaces from Alibaba to Etsy, which has seen a pandemic sales bump, also are in sync with COVID-informed buying sensibilities: They are commerce hubs for independent merchants, small businesses and artisans at a time when consumers — particularly millennials, the nation's largest buying cohort — are increasingly supporting local merchants and small brands, opting more for merchandise with a one-of-a-kind feel.
Indeed, one of the seminal shifts in spending habits since COVID-19 is a drift toward local shopping and a retreat from malls, with 75% of consumers planning to shop more locally over the next year, while 71% plan to shop with independent retailers, according to the "How We'll Shop" study from digital operations platform Brightpearl. This demonstrates, the report says, "the profound effect the impact of coronavirus has had on our day-to-day thinking."
CO— aims to bring you inspiration from leading respected experts. However, before making any business decision, you should consult a professional who can advise you based on your individual situation.
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