COVID-19 Crisis: A Call to Close the Stores

PMG is providing near-daily observations on the economic implications of the COVID-19 outbreak. Today’s briefing is outlined below.

As the U.S. federal government weighs stimulus packages, marketers remain focused on supporting customers with decisions regarding brick & mortar store closures, brand communications, and enabling optimum efficiencies across channels. Here’s what we know.

Store closures

Ecommerce performance

Brand communications

The new public guidance by the federal government strains the logistics of retail stores that decide to remain open in certain markets. Overnight, we saw officials enact new public health measures to #flattenthecurve in populous areas such as New York City, the San Francisco Bay Area, and New Orleans. 

For many essential services, accommodations are being made to aid seniors and other at-risk populations with supermarkets around the world reserve the first hour of shopping exclusively to senior citizens.

Online performance for many brands across PMG’s portfolio is holding strong amid the volatility of the current climate. For most brands, traffic is down, but conversion is still up, signaling that customers are still shopping online.

Search demand is down for both retail and travel, but of the demand, paid search remains a tried and true channel. Especially in this trying time, it’s a safe space, based on consumer intent, and has continued to show resilience. For many of our partners, this will continue to see strong investment and activity.

Concerning store closings, the overwhelming trend has been to reduce investments that support those stores and shift that budget into ecommerce channels. We expect this to remain fairly consistent in the weeks to come. 

With upper funnel or brand media, in many cases, brands haven’t paused efforts, but rather teams have ensured all creative and copy are now revised to reflect the current climate. PMG is here to help all brands make the necessary adjustments. Results are still TBD, but our recommendation is still to keep the lights on if possible.

Finally, for online traffic, we still see quite a bit of activity, outpacing even our own expectations. Click-through rates are holding strong as are ROIs. We do expect competition to increase, as other brands are likely to follow suit. Our recommendation here is to be an early adopter and maintain that edge on your competitors.

Looking ahead, budget exercises and scenario planning are some of the biggest priorities from a strategy perspective. Given the volatility and rapid pace of the developing situation, marketers must plan for a range of outcomes, determining that if any marketing should be shut off, which channel should be the first to go dark and how quickly things can be turned back on amid a turnaround.

Saying the right thing is also top of mind, and many learnings can be made from China’s experience with the virus outbreak earlier this year as brands shifted messaging to promote unity and social responsibility rather than sales. For many in the U.S., messages of social responsibility and philanthropic arrangements seem to be the next best decision. 

An early mover includes Ford announcing payment relief and a new spot promoting unity during challenging times. From smaller brands, we see an uptick in earnest messages around the challenging realities of being a business in a public health crisis. Alex Mill is a recent example of this kind of B2C transparency.

Alex Mill Brand Crisis Communications Example

As you’ve probably seen in your own inboxes, email is absolutely becoming the vehicle of choice by brands to communicate COVID’s impact, and that’s likely to continue along with messages of solidarity for those on the front lines and most affected by the pandemic.

We recommend brands work with internal teams to develop a content strategy that demonstrates awareness and sensitivity of the current climate and consumer mindset, rather than business as usual organic content. Images and social copy that is highly focused on product or travel-related messaging or sales may prompt negative feedback or simply appear tone-deaf. We’re likely to see continued developments of unity and philanthropic acts of social responsibility from brands big and small alongside human-first messaging in support of customers and those on the front lines and most affected by the pandemic.

Instead, this is an opportunity to focus on relationship-building with your audience by providing them with positive, uplifting messages during this difficult time.