How can e-commerce circumvent the coronavirus without using omnichannel’s strength? - VTEX - Accelerate Commerce Transformation

How can e-commerce circumvent the coronavirus without using omnichannel’s strength?

Felipe Dellacqua
Felipe
15 Apr 2020

The world was hit hard by the crisis caused by the novel coronavirus. Many employees were forced by companies to work from home and were instructed not to leave their houses during this quarantine period, in order to avoid the contagion and spread of the disease.

Governments worldwide have shut down commerce and trade: no non-essential service is allowed to remain open during these days. The thing is that, for most retailers, online sales do not exceed 5%. Although in stronger economies digital commerce represents a greater share, in general, 95% of retail revenue comes from B&M. And companies that operate this way are the ones suffering the most from the shutdown.

The problem may be even greater for companies whose revenue comes largely from wholesale sales, whose products are resold by small multi-brand stores. We are talking about future and predictable sales that may not happen anymore.

Micro and small companies represent 27% of the Brazilian GDP, accounting for 54% of formal employment and 44% of Brazilians’ wages. Services and Commerce account for 78% of this market. This small retail will be one of the sectors most affected by the crisis.

The good news is that there is a way for retail to circumvent the challenges of the COVID-19 pandemic, using all its strength to continue operating and selling. Let’s go to the tips:

 

1) Organize your inventory in fewer distribution points

Collect the products from your B&M stores that are closed and create regional distribution centers, centralizing inventory availability and offer. Don’t leave your products sitting on the shelves of closed stores.

 

2) Transform your salespeople into digital affiliates

Are your sales reps at home unable to sell because the stores they work in have been closed? Transform them into digital affiliates. Create a field in your cart or checkout so that consumers can inform the name or code of the seller who assisted them with the purchase.

Ask all your sales reps to start actively prospecting their customer base, segmenting clients by region and using tools like WhatsApp as their main communication channel. In these times of isolation, consumers are using their cell phones almost 100% of the time.

If you are unable to create this field in your cart or checkout, when your sales reps send the link to customers, they can add a tag at the end:

?utm_source=salesperson.code

 

The complete link would look similar to this:

https://www.sualojavirtual.com.br/nome-do-produto?utm_source=cod.do.vendedor

This way, you will be able to identify sales through Google Analytics or your order manager, if it has the UTM field in its filters.

 

3) Your franchisee or multi-brand doesn’t have a website? Merge it with your e-commerce.

A simple and inexpensive way to do this would be to create a category called “Stores”. The subcategories would be the names of the stores, such as “Pink Store”.

That way, you would have a URL similar to this:

http://www.sualojavirtual.com.br/lojas/pinkstore

 

To create an identity, most platforms allow you to add a top banner to the category. This banner would contain your partner store’s logo, name, and other information.

Below, the window display can replicate the website’s main categories tree. Over time, it is possible to customize the window display according to each partner store. It works for both multi-brands and franchises.

With regards to the financial aspect, we suggest that for every sale originating from a partner store, a checking account should be created with a credit that would be converted into a discount on the next invoice. Ultimately, you will want the franchise or multi-brand to continue buying from you after the crisis is over.

 

4) Logistics will be your greatest ally at this time

Agility favors e-commerce. Make partnerships and contracts with the main express delivery companies, such as Rappi, Loggi, Uber, Delivery Center and bicycle couriers. Carriers, whether express or otherwise, continue operating 100% to meet the increased demand for local, inter-municipal and state deliveries. It is worth remembering that centralizing product origin makes the carrier’s work easier.

 

5) Use discounts to generate sales opportunities

We know that any discount on a sale implies less profit margin, but we are going through a moment when the most important thing is to keep the wheel spinning. So we will have to sacrifice part of our profit margin in favor of making the sale.

Create aggressive promotions during short periods of time, simulating flash sales. If there is no margin for promotion, increase the installment options and then negotiate with the acquirers lower anticipation fees. Remember that the crisis is also affecting the consumers, who may be unable to work and generate income.

 

6) Categories selling more are not the most obvious

Everyone imagines that online sales growth is due to purchases of essential items, such as medicine, food and beverage, cleaning supplies and related items.

However, according to reports released by ABCOMM, “Compre e Confie” and VTEX, other categories are showing the greatest growth in sales. People are at home, and many of them have nothing to do. With the uncertainty of what the future may bring, anxiety increases every day.

With anxiety comes impulse. It makes consumers buy that item which they’ve been thinking about for a long time or which received a discount that they thought was worth taking advantage of.

 

Sporting goods

Practicing physical activity is very important to maintaining physical and mental health. With gyms closed and the impossibility of going to parks, exercising at home has become the only option for many.

 

Sex shops

These are also among the best-selling categories. This moment of reclusion brings an opportunity for couples to rekindle their relationship with sexual articles.

 

Home decor

As people are spending more time indoors, they start to look at their home decor in more detail and dust off shelved projects.

 

Fashion

Surprisingly, despite not being able to go out, Brazilian consumers are renewing their wardrobes. Taking advantage of this moment can be a good strategy. Fashion is already the category with the highest volume and growth during this month of crisis.

 

7) Use WhatsApp as your main service channel

Consumers are heavily relying on instant messaging to communicate with their families, co-workers and friends. In Brazil, WhatsApp groups have become larger and more active.

As a result, consumers prefer to keep communication centralized in the messaging app they use the most. In the case of WhatsApp, the ideal is to dedicate a phone number to serve your customers, whether to answer questions, perform post-purchase services or even to make direct sales.

Give preference to WhatsApp Business, which has several features for you to classify your customers and better organize your service.

 

8) Those who don’t have e-commerce yet will have to close their operations?

No, but for your company to stay alive, it will need to have some digital presence. Today there are free and fast platforms where you can create an online store overnight and serve your customers. This is the case of Loja Integrada (Integrated Store), which allows you to create an online store in five steps.

But you can also count on Instagram to make direct sales, or even on messaging apps. Many payment companies have a payment-via-hyperlink feature – for example, in Brazil, PagSeguro, PayU, and Cielo.

This way you can communicate via WhatsApp or Instagram with your customers and send a link where they can make the payment online via credit card, “boleto” (popular Brazilian off-line payment method) or transfer using a secure environment. As soon as the transaction is confirmed, you ship the product, without the need of a dedicated e-commerce. The most important thing is that your business is available and online.

 

9) Together we can avoid a new recession

Finally, I am sure that this coronavirus crisis will pass, as the Spanish flu, H1N1 and many others did. But certainly, none of them caused an economic shutdown as strong as this one.

When the health crisis is solved, we will have an economic and political crisis to deal with. If we react now, joining forces between private and public initiatives, using digital channels as sales boosters, allowing non-essential services to remain functioning in a certain way, there will be a light at the end of the tunnel.

Good luck and good sales. And let’s hope that together we can come out of this crisis stronger.

 

(Article originally published in Portuguese on the E-commerce Brasil website)