From Survival to Revival€¦ · Local marketers have also experienced disruptions in several ......

From Survival to Revival Best Practices in SMB Marketing Amid the

Coronavirus Crisis

Andrew Lipsman, Principal Analyst, eMarketer

Jillian Ryan, Principal Analyst, eMarketer

Agenda

• Survival: The Tough Economic Backdrop for SMBs

• Retail & Consumer Sentiment

• Shifts in B2B Buying and Marketing

• Messaging and Organic Channels

• Advertising and Paid Media

• Revival: What the Return Might Look Like

SMBs are focused on survival right now. But putting the right marketing strategies in place can maximize the bounceback.

You are

here

You could

end up

here…

…or here

Survival: The Tough Economic Backdrop for SMBs

A majority of SMBs have been affected by the coronavirus pandemic

Per McKinsey and Company polling, 60% of SMBs said their business has been affected by the pandemic, and more than half reported that their business feels less secure.

Local marketers have also experienced disruptions in several facets of their business

Only 27% are experiencing no impact

Meanwhile, 28% of local marketers have paused marketing, while 23% noted they are losing clients due to the pandemic.

Most US SMBs believe their businesses cannot last long under the conditions of the pandemic

More than half (54%) don’t think they can last six months under the current conditions.

The coronavirus pandemic has forced many SMBs’ digital transformations, whether they were ready for it or not

Before the pandemic, 49% of SMBs hadn’t begun their digital transformations.

Now, many have been pushed into transforming how they do business and how their employees work.

Retail & Consumer Sentiment

The consumer economy fell off a cliff in March—and will be even worse in April

Certain discretionary retail categories, like apparel and home furnishings, have never experienced a falloff like this.

Gallup’s Economic Confidence Index had its largest-ever one-month drop, from +22 in March to -32 in April.

Meanwhile, ecommerce sales growth roughly doubled in March

According to Rakuten Intelligence, sales from US click-and-collect/curbside pickup orders surged 54.1% in March.

Recent reports also indicate an ecommerce acceleration since Americans began receiving stimulus checks

31.1%US ecommerce sales growth in

March 2020

Source: Rakuten Intelligence, Q1 2020

Ecommerce buyers have increased their purchase habits across most categories due to the coronavirus

The biggest ecommerce gains are in essentials, but highly discretionary consumer categories, like apparel, consumer electronics and home furnishings, are declining.

US consumers are concerned about their personal incomes being affected

According to Kantar polling, 75% of US adults reported that their personal income has been impacted or is expected to be impacted by the pandemic.

Big-ticket categories are the hardest hit, as travel and entertainment gets cancelled and luxury purchases get deferred

These categories also have second-order effects on retail due to complementary purchases

As purchase patterns change, there’s potential for new habit formation and lasting impact on brand loyalty

Almost half (48%) of consumers will continue to rely on the same brands, but many are open to trying new brands—especially given higher frequency of out-of-stock items.

This could be both a threat or opportunity for SMBs.

Many SMBs already grapple with the double-edged sword of competing with and partnering with Amazon

The pandemic is putting a lot more SMBs in a position where they may need to rely more on Amazon as a sales channel in the short term

Amazon Prime Day 2020 could still be a major opportunity for SMBs and third-party sellers to generate big sales

90%of ecommerce professionals planned to

spend the same or more on ads for

Prime Day vs. in 2019

56% of ecommerce professionals expect

Prime Day 2020 to be a big winner

because of more people

shopping online

Source: Profitero, Survey of 160 Amazon Sellers,

March 15-17, 202017

Source: Profitero, Survey of 160 Amazon Sellers,

March 15-17, 202017

Another short term sales option for SMBs is to pull purchase demand forward–but options have to be easy for consumers

Gift cards are an option to pull demand forward, but physical gift cards can be an impediment to purchase

SMB merchant services like Square and Kabbage are offering ways to easily spin up digital gift cards

Best Practices in Retail

No. 1: Re-evaluate merchandising and reposition products for the moment

As we take on new behaviors spurring demand for certain products and changing use cases, which brands and SKUs can get a second chance?

No. 2: Build your online and click-and-collect muscle

Click-and-collect will become a new way of life post-crisis. Operationalizing the practice today wins share of wallet tomorrow.

No. 3: Pull demand forward

Shoppers want to support local businesses. Help them steer future spending in your direction, with gift certificates, replenishment purchases and direct appeals to buy ahead for special occasions.

Shifts in B2B Buying and Marketing

Like consumers, business buyers also have concerns about the economy

B2B buyers want their vendors to build confidence through accurate information and seamless purchasing

B2B tech buyers are spending more on software during the pandemic.

Many companies are making technology purchases to enable remote working.

Nearly 60% of US B2B marketers expect to decrease their budgets

The cancellation of in-person events has caused B2Bs to reallocate event marketing dollars.

Content creation, digital events/webinars and search advertising will experience the greatest increases in investment.

Best Practices For B2B Marketers and Sellers

No. 1: Pivot in-person touchpoints to digital

As in-person events are a thing of the past (for now), B2Bs need to reallocate budgets and efforts to digital channels and virtual events.

No. 2: Don’t go for the hard sell

B2B salespeople shouldn’t be too aggressive with outreach, because it will come off as insensitive and be a turn off buyers who are facing hardships with their own businesses.

No. 3: Focus on thought leadership

Your customers are facing challenges right now and your marketing and content should provide answers and clarity. (More on that next).

Messaging and Organic Channels

Roughly half of consumers want to hear from brands the same amount during the coronavirus outbreak.

For categories such as grocery, healthcare and household goods, consumers want more brand communication.

For others, such as auto, fashion and beauty, consumers want to be contacted less.

But brands can’t be tone deaf – most should shift their messaging strategies

Many brands and agencies are moving toward more mission- and cause-based marketing.

There are many low-cost, organic channels that consumers prefer brands use to communicate during the pandemic.

Email and social media posts will be best for SMBs.

Rely on your email list and content

First-party customer data is an asset you own.

Use your email mailing list to your advantage to communicate with your customers.

Audit your current email automation workflows. Turn off any comms that aren’t relevant during the pandemic.

Create new email campaigns that communicate how your company is operating in new ways and supporting customers.

Assess the digital content you have created over the years. If there are pieces that can be updated to add value now, do so.

Social media usage is soaring, with 70% of US adults spending at least an additional hour on these platforms a day

Huge gains in incremental social media consumption means more opportunities to get your brand in front of an audience through organic channels.

Best Practices in Messaging and Organic

No. 1: Focus your message to be mission-based or purpose-driven

This is a time to share how your business is serving your community and supporting those in need during the pandemic.

No. 2: Create content to educate and build your community

Share knowledge with customers to help them during the crisis and win their loyalty after. This is an opportunity to build your email list.

No. 3: Use social media to communicate—and listen—to your customers

As people spend more time on social media, leverage your best social channels to engage with customers. Make sure you listen as much as you share information about your business.

Advertising and Paid Media

After years of ratcheting up paid media, SMBs now in a major pullback in ad spending

In the next six months, 52% of SMBs expect to spend less on advertising vs. just 16% who expect to spend more.

This is almost a complete reversal from expectations in December 2019.

Most US adults believe it’s still OK to advertise as normal during the crisis

According to GlobalWebIndex polling, 72% of US internet users are at least neutral about whether brands can keep advertising as they usually would.

A majority of consumers want to hear from brands, but they want to know how they’re responding to the crisis

56% want to know that brands are being forces for good in the community, and

40% want to know how they are responding to the pandemic

Brands can communicate simple messages that meet the moment

SMBs don’t have the luxury of buying expensive media like big brands, but there’s no monopoly on creativity, and cost-effective channels do exist.

Digital ad cuts are happening across the board with only paid search holding steady

Search offers the clearest link to ROI, so this reflects a flight to “certainty” with digital ads.

Ad cuts also mean declining CPMs, so there’s cheap media for those that still have some budget for ads

Facebook and Google are each offering millions in ad credits to SMBs, while Kraft Heinz is donating its ads to SMBs

At a time when half of brands are spending less on digital ads, ad credits mean free impressions, with less competition for attention.

$340M $100M

Best Practices in Advertising

No. 1: Don’t go dark (if you don’t have to)

Brands that maintain their brand equity in a crisis gain momentum as the economy bounces back.

No. 2: Adapt your ad copy for the moment

Authenticity, empathy and personal connection matter. Simple messages resonate, but there’s also room for creativity and humor.

No. 3: Find cost-effective media and use available resources

SMB ad credits are available and there are other ways to downshift your ad spend to cheaper media without going silent.

Revival: What the Return Might Look Like

Despite the fallout, many consumers are optimistic about an economic recovery.

Shopping in stores may become less frequent but most expect it to return to normal.

Spending on nonessentials may take more time to return to normal

Half of US adults think their spending on more discretionary items will take 4+ months to bounce back.

The good news through all of this: Consumers strongly support small businesses.

Not all US adults support the federal government providing financial assistance to all business types.

But 86% support small businesses receiving aid from the government during this crisis.

Small businesses need to remember not to abandon marketing in a recession if they want to come out stronger

“During recessions... marketing expenditures in areas from communications to research are often slashed across the board—but such indiscriminate cost cutting is a mistake.

Companies that put customer needs under the microscope, take a scalpel rather than a cleaver to the marketing budget, and nimbly adjust strategies, tactics, and product offerings in response to shifting demand are more likely than others to flourish both during and after a recession.”

Key Takeaways

No. 1: Stay visible and invest in customer relationships now

Demonstrate the value of your relationship, be a trusted partner and develop your communication channels using empathy.

No. 2: Embrace digital transformation to expand and diversify business

Every business has had to flex new digital muscles, and this can radically expand your audience, customer base and buying occasions.

No. 3: Leverage best marketing channels to lean into post-lockdown demand

While some consumer demand will be constrained, many consumers will be looking to buy once restrictions lift.