COVID-19 has ignited a surge in the e-commerce marketing sector. Many retailers are seeing year-over-year growth in digital ad ROI and other major KPIs. For instance, in analyzing a sample of several hundred retailers that Sidecar works with, we found that return on ad spend in Google paid search was up 31% year over year in March.
April results have been even stronger, with 113% growth as of May 4, 2020. (Note that April ROAS will rise as orders continue to be attributed to April clicks due to retailers’ typical 30-day attribution window.)
One retailer experiencing this level of digital ad ROI growth first-hand is The Warming Store. The retailer works with our team here at Sidecar to manage ads on Google, Facebook, and Amazon. Co-founder Justin Silverman recently spoke about how his business is doing in a video interview with Joe Keenan, Editor-in-Chief of Total Retail.
Watch as Justin discusses how COVID-19 has impacted The Warming Store’s digital marketing approach. He speaks to how Amazon’s fulfillment limitations had created an opening for The Warming Store, how operations have been impacted, and predictions on the new normal for apparel retailers in the post-pandemic environment.
Interested in just the nutshell? Here are top sound bites from Justin, edited for brevity.
On COVID-19 wins and challenges:
“Performance-wise, our sales are up. We’re seeing revenue growth year over year three to five times what it was last year, which is pretty remarkable with everything that’s going on.”
“I think the biggest contributing factor has been Amazon’s strategy over the past month. Amazon has prohibited some inbound inventory and replenishment from third-party sellers, and they shifted focus to essential goods and cleaning products … It’s reduced competition for us, which I think has allowed us to maximize sales over this period.”
“For us I think the hardest thing has been long-term planning and inventory projections as we get into fall and winter, because there are unknown economic impacts, which has made it hard to make some of those decisions the way we normally would.”
On The Warming Store’s partnership with Sidecar:
“Overall we’ve been trying to stay true to our brand message, which is products that help you get outside and enjoy the outdoors. So it’s not a leap to pivot into different categories. We have a great relationship with our marketing partner, Sidecar, who’s also a Philadelphia-based company. They’ve really helped us closely monitor ad spend and these traffic spikes, which are really related to how Google search volume has changed around certain categories.”
“Over the core part of our season, I think they [Sidecar] did a great job. We basically doubled our year-over-year revenue in Q4, specifically to Facebook ads. Then we did a nice mix of prospecting for new clients and focusing on retargeting. This time of year we have scaled back on the prospecting, just because it’s out of our core sales season … Some other things we’ve done is make sure we have a diversified ad set just so people are not getting bored seeing the same ads again and again. Kind of a mix of static ads, lifestyle images, and also just product catalog ads.”
On advice for retailers during COVID-19:
“This is going to be an important inflection point to evaluate who your competition is and where you’re competing with them—if you’re competing with them online, if you’re competing with them on foot traffic in a busy street. As we saw with Amazon, who’s obviously big competition, once they changed their strategy, and once they moved where their advertising dollars were going, it impacted us significantly.”
“Leveraging your existing audience and your existing customer base is going to be the most effective way to get through this. And it’s also going to establish a closer relationship with those customers in the long term.”
On retail’s future beyond COVID-19:
“Over the last two months, there’s been an accelerated shift of people that are comfortable with online purchases. And I don’t think that trend is going to stop.”
“There are some unique problems with shopping in a store where you’re trying things on, and how comfortable people are going to be interacting with products that other people have been potentially trying on. It’s just something unique to the world of apparel and we might see some more technology come, like AI-simulated changing rooms where you can see what you’d look like with different shirts or pants or sizes. There could be some better technologies when it comes to online shopping to help people find the right size, because returns and exchanges might become more cumbersome as well.”
Follow more of Sidecar’s coverage of the COVID-19 impact on retail.