The world’s economy has shifted to a place where the delicate balance of supply and demand has been aggressively pushed off-balance across all industries. Looking beyond the scramble for loo roll, COVID-19 has caused the demand for some products to skyrocket, and the sale of others to plummet.

As of March 2020, bread machine sales have risen by 652% compared to the previous year, whilst luggage and briefcase sales have both dropped by 77%. But demand will fluctuate - it’s feasible that luggage purchases will drastically increase as holidays are rebooked, and bread machine turnover will drop below its pre-COVID-19 levels.

The disruption is clearly damaging for some, but an opportunity for others. Executing the right steps at the right time in the supply-demand life cycle is crucial to maximising return of investment in digital marketing.

Response to increased demand

It’s important to take advantage of a spike in demand in the short term in order to safeguard medium to long term performance. COVID-19 has caused uncertainty to manifest itself in many ways. Capitalising fully on a surge in demand gives an organisation breathing room in the event that business uncertainty manifests in a drop in revenue. Below are five key considerations in this situation:

· Understand that conversion rates have increased dramatically in some cases. As such, you should revisit your cost per click (CPC), cost per thousand impressions (CPM), and cost per action (CPA) targets. For example, while volume in high-end fashion has dramatically decreased, the conversion rate has never been higher. If targets can be loosened, then you’ll drive more revenue without impacting margin per product. There’ll be an optimal point in terms of those metrics, so take the time to do the analysis to gauge those sweet spots.

· Your site needs to stay up. Many sites are falling over and not dealing with the demand when it isn’t difficult to increase your capacity. Model trends and put your money where your mouth is.
· Consumer behaviour has dramatically changed so pay close attention to your analytics. Your understanding of how and where people bounce, which pages make you the most money, user behaviour on pages, and so on, is all likely to change drastically.

· Reflect on your approach to product bundling, upselling, and promotions to better reflect this demand and supply.
· With demand having shifted, you’ll likely be focusing on reconfiguring paid search keywords and bid amounts, but you shouldn’t forget that other channels should also be optimised. For example, a small change in SEO page architecture could improve your organic rankings in favour of higher-yielding products and categories.

Response to decreased demand

Innovating is more important now than ever, whether you are experiencing a rise or fall in demand. This is especially true to those seeing a decrease in demand. Although easier said than done, it is important to consider three avenues: promotion, reframing, pivoting. Below are some important measures to bear in mind when looking to innovate:

· This won’t last forever, and some businesses are finding ways to promote immediate consumption that would typically be delayed, deferred, or terminated. For example, bars offering their patrons vouchers which can be bought now and redeemed when things go back to normal. These vouchers offer a discount on your bill when redeemed. They’re using email to spread that message, but there’s no reason why this couldn’t also be driven through other channels, e.g. Instagram.

· In some cases, you can reframe your product or service contrary to its typical usage case. If you’re an outdoors brand, how do you create a hashtagable movement to bring the outdoors inside? Cinemas for instance are releasing movies to cable providers and on YouTube. Social media is the rocket fuel for these types of reframes.

· Adjust the service around your product to accommodate social distancing measures. Garden centres pivoting to home delivery, or corporate trainers digitising their material and delivering it online are both examples. While this poses a design and logistical challenge, there’s never been a time in history during which businesses are able to pivot with the speed that today’s technology allows for.

· Finally, there’s some extreme pivots that you might be capable of. A few weeks ago, we saw a virtual of the Grand National attract 4.8 million viewers and raise £2.6 million for the NHS. In addition to good publicity, there’s a huge sponsorship opportunity around these novel events as they give people something to rally around on the weekend.

This is a challenging time but there are options to at least help mitigate the challenge and, in some cases, an opportunity to drive unprecedented revenue or force innovation that can benefit organisations when demand bounces back.

By Andreas Pouros, CEO, Greenlight Digital

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