Nearly 90 million Americans have received their stimulus payments via direct deposit … and they wasted no time shopping.
Initially, we were skeptical of how much effects the stimulus checks would have on spending habits. But it's clear that Americans are using them to drive unprecedented mid-year sales for retailers — everything from website conversion rates and revenue to email sales and geographic data.
In fact, over one-third of retail respondents said they saw above average performance between April 13-16, with an additional 11% seeing Cyber Monday-level performance. Considering that revenue for omnichannel retailers rose over 60% compared to this time last year — in just one day — it’s clear that stimulus checks had made a difference.
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However, consumers aren’t exactly ready to go back to their old shopping habits. In fact, after pulling four more days of data, performance has regressed back down to the mean — suggesting that the stimulus checks have provided e-commerce companies with significant, albeit short-lived, boosts to their businesses.
More stimulus checks are likely on their way, so it’s up to retailers to go on the offensive in order to make the most of these bumps in performance.
1. Look for arbitrage opportunities in paid media
When looking at the data, we're noticing that CPMs across most mobile and social platforms are seeing significant price drops that have held flat since the beginning of March. These drops mean that customer acquisition costs are going to be significantly lower, giving you the opportunity to test out channels you may not have had the opportunity to use before.
Use this as an opportunity to test out paid media, like connected TV or even in-app messaging. If you haven't tried it before, but have always wanted to, now is the time to get onto new platforms with much less risk of wasting money.
Simultaneously, continue to hit on the cheaper, high performing channels that have always performed well throughout this pandemic, like email and SMS. These will make sure you're maximizing the return on spend that you're seeing.
2. Keep LTV top of mind
Many retailers have a fear that they'll waste their resources bringing in e-commerce customers who will eventually return to brick-and-mortar. But this likely isn't the case. We're in a new normal now; it’s important for you to begin to look at how your customers’ lifetime value is shifting on a monthly basis.
A great way to do this is to split up your audience and review at least four different cohorts. Study the average repeat rate for them after one year, 90 days and one month. The repeat rate over the previous month will provide a good sense of how your customers have been shopping since stay-at-home orders have been put in place — and will let you know how their shopping behavior is changing during COVID-19.
Finally, look at how each group's ratio differs, when compared to their average repeat rate over a full year. This will give you a good idea of which sections of your audience will be the best to focus on during this epidemic.
3. Increase payment opportunities for customers
Make the purchasing process as easy as possible for your potential customers, as you don't want to drive away any potential revenue, especially during these uncertain months. One of the easiest ways to do this is to employ physical agencies that make payment easier. If you aren't already giving consumers the opportunity to pay with Apple, Amazon Pay, PayPal and other online payment systems, you should.
Look into implementing companies like Afterpay and Klarna on your site. These vendors will help you split up the payments on your items over a few months and allow customers to still purchase from you.
The spread of coronavirus has had an unprecedented and unpredicted impact on retail. Many retailers are likely to see performance continue to rise as checks continue to be distributed, but it’s up to them to reach — and keep — them during this time.
Ryan Urban is the co-founder and CEO ofWunderkind, a global marketing technology company. He’s also the co-host ofCOVID-19 Retail Pulse, a new series aimed at helping retailers take actionable steps to immediately recover any lost revenue due to COVID-19.