COVID-19 or coronavirus is an infectious disease that causes a respiratory illness with the symptoms of cough, fever, and in more severe cases, difficulty in breathing. It’s a virus that is spreading quickly throughout the world and will continue to spread for a while.
Approximately 13,000 people are getting infected in a day with COVID-19.
To avoid the spread of coronavirus, the government has mandated a lockdown of 14-21 days in every country. The government-mandated quarantine is a nightmare for many industries particularly local small businesses, restaurants, and travel agencies. No one knows how many people will get infected during this pandemic but as the global market is crashing down, there are chances that the pandemic can affect your business too.
How it’s affecting every business around the globe?
Due to coronavirus pandemic, most of the businesses have shut down temporarily to prevent the break the chain of COVID-19 spread. Global retailers including Nike, Glossier, Urban Outfitters, and Apple, etc. have shut down their stores to prevent the spread. Retailers are not alone, coronavirus is affecting every other industry. Let’s see how your business to going to get hit due to coronavirus:
#1. Businesses are going to struggle for at least a year
Even if the spread of Coronavirus slows down or drops to ground level, businesses are going to suffer for at least a year. It will take a lot of time for the business owners to make up for their losses.
“U.S. retail sales fell by the most in more than a year in February and the coronavirus pandemic is expected to depress sales in the next months ahead. These facts strengthen economists’ expectations of a consumer-led recession by the second quarter.”
The coronavirus outbreak has forced everyone to hunker down in their homes instead of commuting to schools or work. State and local governments have escalated “social distancing” policies, closing schools, bars, restaurants, and theaters in an attempt to contain the virus.
Due to this, retail sales have dropped 0.5% in February, it’s the biggest decline since 2018. Shutting down retail stores means less income and less profit.
Similar is the case with the travel industry. It’s expected that the travel industry will lose 820 billion dollars during this time. Virgin Atlantic has asked its employees to take an 8-week unpaid leave.
- Auto sales decreased by 0.9% in February.
- Sales at building material stores plunged 1.3%
- Sales at electronics and appliance stores dropped 1.4%.
- Receipts at clothing stores declined by 1.2%.
- Receipts at furniture stores slipped 0.4%.
- Grocery and healthcare stores sales fell marginally.
- Sales at restaurants and bars dropped 0.5%.
- Economists expect a sharp drop in the months ahead.
People are not just losing their money, they’re experiencing a decrease in their traffic as well as conversions.
#2. Decrease in organic traffic
Due to the COVID-19 lockdown, most of the industries have faced a 75% drop in their organic traffic. These industries include travel, retailers, food, construction, insurance, and more.
Your organic traffic must have skyrocketed if you’re in any of these industries news, entertainment, gaming, and productivity, etc.
The e-Commerce industry is showing mixed results – Traffic is up or down depends on the type of products you’re selling on your website. If you’re selling grocery or other essential products you must have seen a nice bump in the traffic. However, if you’re selling electronics or any other luxury goods, you’re experiencing a big drop in your traffic.
#3. Conversions are dropped too
As the organic traffic has dropped, conversions are dropped too. Even the financial sector, which had big traffic booms in traffic, dropped in conversions during the COVID-19 pandemic.
Industries like travel are currently offering massive discounts. This is helping them counteract some of their traffic declines but overall they’re still seeing a massive decrease in revenue.
Well, this is not the case with every industry. Industries like media and entertainment websites have seen massive traffic and conversions during the pandemic.
- More number of people are purchasing subscriptions for services like Netflix, Hotstar, and other entertainment channels.
- People are buying fitness services as they don’t want to put on some weight while sitting on the couch at home.
- New sites like The Washington Post are experiencing lift as readers don’t want to miss out on any information on Coronavirus, political and financial information with the turmoil.
#4. Pay-per-click data
There are no big shifts in cost per click, even for the travel industry. As there are big dips in the number of people searching for flights or hotels, there is no drastic drop in CPC, however, there is a big increase in cost per acquisition. This means you can still roughly pay the same amount per click, but the cost per conversion has been going up for most industries… unless you are selling necessities like toilet paper.
What does this mean for marketers?
The economy is predicted to get hit by 2.7 trillion dollars and experts are saying that we are going to go into a recession. If the market keeps going down, many of the businesses will struggle to pay off their debts. There are chances that some companies will get bankrupt, get bought out, or get bailed out by the government. Some may be able to cut costs enough to pay their bills, but for most, it will be too late.
But if you’re lucky enough and your online business is running well during COVID-19 pandemic, this is your opportunity to strike and gain market shares. And when things will get back to normal, you’ll have less competition, which means it is easier and faster to get results, and in some cases, you’ll be able to get deals, such as a potential reduction in pay-per-click advertising.
Every time the market goes down by 20% or more it roughly takes 536 days to recover. And we don’t even know how far down we will go or when the bottom will be.
As we recover, you’ll see your revenue climb and the ROI from your marketing spend to go through the roof.
Hopefully, the Coronavirus passes soon and it has minimal impact on lives. For the time being, try not to socialize with others too much or go into crowded places. Improvise your marketing strategies to deal with the situation because this is the time for you to double down.