On March 12th, NYC Mayor Bill de Blasio declared a state of emergency in New York City. An announcement followed on March 15th that halted the opening of public schools, restaurants, nightlife, and more.
By March 16th, the majority of the non-essential workforce was already working from home, when can. Most retail stores shut their doors globally, including Nike, Apple, Urban Outfitters, Madewell, Lululemon, Abercrombie & Fitch, Anthropologie, etc.
At Optimove, what interested us (as usual) was the data. So we looked into it, to see the effects on consumer behavior in regards to various types of retailers.
The methodology behind our research was to compare the pre-state of emergency in the first two weeks of March (March 1st – 15th) with the last two (March 16th – 31st.)
It’s important to emphasize that we solely focused on online sales, as brick and mortar retailers have been hit the hardest for obvious reasons.
What did we see? Take a deep breath.
Shoe Retailers
Why buy shoes if you can’t walk outside, right? Not quite.
You would imagine that shoe retailers would be hit the hardest since shelter-in-place orders were issued. Some shoe retailers have indeed seen a decrease in order volume of just under 10% between the first and second halves of March. Others, though, have actually slightly increased their order counts.
To combat the pandemic, promotional activity among shoe retailers online is picking up. In fact, orders that have discounts have increased by 80%. And, consumers have taken advantage of the discounted environment. This can explain part of the 14% decrease in AOV (average order value).
Underwear & Loungewear
Another interesting vertical is underwear and loungewear. Apparently, many consider these as essential items, especially while working from home. Demand has indeed increased by up to 16% in the second half of the month in terms of order count.
Some brands have not offered extensive discounting, while others have seen an increase of 17% in discounted orders. AOVs have remained stable. The most notable change has been in the sales of loungewear bottoms (sweatpants and joggers), which have spiked by nearly 90% in the second half of the month. Hm, wonder why (we’re looking at you, Zoom warriors).
Athleisure & Fashion Apparel
In the athleisure and fashion apparel categories, we see a mixed case.
Some brands have lost up to 40% in order demand, while others have spiked by up to 100%. On average, there is a 5% increase in orders in the second half of the month.
We can attribute these positive spikes to flash sales that have been appearing and traditionally non-promotional brands trying to compensate for their drop in demand. Consumers have indeed taken advantage of these sales, also projecting brand loyalty, as they do understand the opportunity offered to them.
AOVs have decreased by up to 15% in these verticals. Most brands are selling the same number of items per order, confirming the “sale” environment.
For example, in this chart, you can see the 5-day special sale that started March 25th:
Food Stores
Some verticals have been positively affected by COVID-19.
Unsurprisingly, retailers who sell food and essentials (vitamins, home goods, etc.) have not had any demand problems, but more of supply chain issues.
The chart above displays a trend of four food and essentials retailers orders showing the YoY percent change on a rolling 14-day average. We noticed that before the situation escalated, some brands were not performing successfully year over year (Brand A and Brand C), while Brand B and D were performing on par with the previous year.
However, starting on March 12th, the day that the U.S suspended travel from Europe and the NBA postponed its season, consumers began flocking the stores and stocking up on food and essentials goods.
Skincare & Cosmetics
The last verticals that we will touch upon here are probably the most surprising ones.
Skincare and cosmetics brands have been performing exceptionally well in the second half of the month, up 35% in order volume on average. Unlike other verticals, mostly battling to retain existing customers, skincare and cosmetics brands have witnessed new customers with a 70% surge in acquisition in the second half of the month.
This is even more surprising given the fact that brands offered 22% fewer discounted orders on average during this period.
Below is the number of orders from a specific brand in 2019 versus 2020:
It’s clear to see that until March 15th, 2019, the year 2019 performed better than 2020. However, since the world was told to WFH, 2020 has dramatically overtaken 2019. Are people pampering themselves in preparation for their Zoom meetings more so than a day in the office?! Looks like it.
A Tip for All
We can see that in some retail verticals, the percentage of new customers out of their total order amounts has increased significantly. While with others, the opposite is true.
So, brands who have seen a decrease in their ratio of new customers, this is a great indication for you! As budgets are more limited, and cost of acquisition is soaring, perhaps doubling down on retaining existing customers is the most logical tactic now.
As we enter April, we’ll keep on tracking such trends and data from various retailers for you.
Yoni Barzilay is Optimove’s Director of Data Science, North America. He has a knack for finding creative solutions for extreme data challenges, and has led some of Optimove's biggest e-commerce onboarding projects. Yoni holds a BSc in Industrial Engineering and Management, specializing in Information Systems.
