According to new survey data from McKinsey & Co, 20% of shoppers have left their primary grocery store in favor of another during the crisis, and 37% of those who’ve made the switch expect to remain loyal to the new retailer after the crisis ends. The main reasons people stopped shopping at their primary grocer were constant problems with keeping the shelves full and better ecommerce offerings elsewhere. Another contributing factor was that consumers opted for a store that was located closer to their home or place of work.
McKinsey estimates that prior to COVID-19, about 3% of U.S. households were purchasing groceries online. That rate has since surged to between 8% and 10%. While the firm expects those numbers to decline as states begin relaxing their shelter-in-place orders, it predicts they’ll remain higher than they were prior to the outbreak. “What it means for grocers is that you really need to double down on building out your ecommerce capabilities,” said Steven Begley, a partner at McKinsey. “That comes in the form of adding capacity to your system to make sure that you can fulfil orders, to improving your UX and making your website or app as shoppable as possible.”
Facebook is to acquire Giphy, a leading service for making and sharing GIFs, which will become part of Instagram. Founded in 2013 as a search engine for GIFs, Giphy soon expanded to tools that enabled millions of internet users to seamlessly embed the short animations on sites like Facebook and Twitter, helping to make “reaction GIFs” a core medium for digital expression. Facebook characterized the acquisition – reportedly worth $400 million – as a way to help its millions of users “better express themselves.” “By bringing Instagram and Giphy together, we can make it easier for people to find the perfect GIFs and stickers in Stories and Direct,” Vishal Shah, vice president of product at Instagram, said. Giphy’s tools are already integrated with many Facebook competitors, including Twitter, Snapchat, Slack, Reddit, TikTok and Bumble, and both companies have said that Giphy’s outside partners will continue to have the same access to its library and API. But now Facebook, ultimately, will be the gatekeeper for all those integrations, and it will have unprecedented insight into how people use GIFs. Facebook says it will not collect information specific to individual people using Giphy’s API, but it will get valuable data about usage patterns across the web. Facebook’s suite of apps already made up a huge chunk of Giphy’s traffic – 50 per cent, according to the company—but now it can collect data from other platforms, many of them competitors, and possibly spot emerging trends.
Amazon has launched an e-commerce strategy information pack aimed at businesses trying to pivot to or accelerate their online retail operation. Deep Dives: Amazon Strategies is a collection of videos, presenter’s decks and an Amazon Survival Guide from the Amazon Strategies Virtual Forum that provides insights and practical tips in order to help users grow their business. Included are on-demand sessions offering actionable insights into advertising and selling on the platform, slides from presentations by industry leaders from companies including Publicis, e.l.f Cosmetics, Gravity Products and more, an Amazon Survival Guide with key takeaways and clear steps in order to grow a business and a 10% discount on the next Amazon Strategies Virtual Forum. Topics explored include advertising on Amazon, including Amazon’s Marketing Services 101 and advertising against competitors; the big picture, including how c-level execs are evaluating their omnichannel approach and how brands are adapting to changing consumer demand to be both effective and judicious with spend; selling on Amazon, including how to optimize product pages to maximize sales and supply chain strategies; and the state of DTC companies on Amazon, including how to build a DTC brand on Amazon and the case for not selling on the platform. The collection is priced at $349.
Some companies have been presenting their financial results using a new customised metric they are calling ebitdac: earnings before interest, tax, depreciation, amortisation – and coronavirus. This week Schenck Process, a German manufacturing group, added back €5.4m of first-quarter profits that it said it would have made were it not for the hit caused by state-mandated lockdowns. Its operating profit for the period – “adjusted ebitdac” of €18.3m – was almost 20 per cent higher than the same period a year earlier, rather than 16 per cent lower. Schenck Process is not the only company tinkering with the presentation of its results. When The Azek Company, a Chicago-based manufacturer of building products, raised $325m of junk bonds last week it included a term that would allow it to add back “lost earnings” as a result of COVID-19 in future. That was a first for the corporate debt market, according to research firm Covenant Review. The add-back was “not ideal”, said Rob Jones, senior credit analyst at Insight Investment, an asset manager. He said such adjustments went beyond the usual tweaks that companies made to polish their numbers. “These are lost earnings you’re adding back, as opposed to potential earnings added on.”
COVID-19 has disrupted the world of music streaming – but children’s music has been a winner from the recent changes in consumption. In the US, the number of total on-demand streams were recently down from 18.3 billion to 16.6 billion, a drop of about 10%, according to data from BuzzAngle. The data includes all major streaming providers, including Spotify, Apple Music, and Pandora. But not every artist’s streams are suffering equally. The rapper Cardi B has been one of the major artists to see their streams take the largest dip. Her music was streamed 12 million times in the last week of February, but only about 10 million times in the last week of March, a decline about 17.5%. Over the same period, the Rolling Stones saw their streams drop less than 4%. Kidz Bop, though, a band that makes versions of pop hits sung by children with lyrics modified for kids, actually saw a jump of about 10%. With parents needing to entertain their kids all day, the rise of children’s music has an obvious explanation. However, a large share of music streaming occurs during commutes, and many people are no longer heading into work. There is also a decline in music streaming from the hospitality industry. Many of the restaurants, coffee shops, and stores that would normally stream music all day are shut down. The decline won’t necessarily be too costly for the music business, though. While streaming revenue accounted for nearly half of all music industry revenues in 2019, according to industry association IFPI, almost 80% of global revenue comes from paid subscribers, and only about 20% comes from advertisements to non-paying users.
When office workers return after COVID-19, “building tech” may be a new feature of working life. Doors may open via a mobile app that will also track everywhere you’ve been and ping your boss every time you enter or exit the building. You may be asked to sport a wearable device like a smart ring to call the elevator hands-free, or to store an “immunity passport” if you’ve already had the virus. Changes could also include more aggressive automation, or replacing the overnight cleaning crew with robots. The demand for touch-free solutions is “busier now than ever,” said Denis Mars, CEO of Proxy, a digital identity startup working on smartphone-enabled building access and smart rings. “If anything, it feels like the world tilted on its axis to reinforce how important it is that we get these things right sooner rather than later.” Proxy is one of many companies in the $18 billion property tech industry, or “proptech,” recalibrating offerings for clients seeking more physical control over offices, factories and warehouses in an uncertain world. These companies range from venture-backed access control providers such as Proxy, Openpath and Nexkey to large building automation and security incumbents including Honeywell, Siemens and Kastle Systems. It’s another potential shift for many tech campuses and high-end offices, where the trend in recent years was to install fingerprint scanners and iPads that doubled as receptionists. The design firm Gensler has framed the coronavirus challenge as a transition from a “frictionless workplace” to a “touchless workplace.”
Healthtech company Zocdoc was founded in 2007, and primarily offered a service for booking doctor’s appointments online. But by early March, doctors across the country were beginning to tell sick people to stay home, demand for telemedicine services surged, and companies that specialized in it rushed to seize the moment. Zocdoc had never dabbled in telehealth, believing it was, as CEO Oliver Kharraz put it, a “fringe phenomenon.” But the company had built a massive network of physicians whose offices were about to sit empty, while their services were more needed than ever. “It was clear we had a unique way to help here,” Kharraz said. “We had a lot of hidden supply with all the doctors that typically see patients in-person and are probably underutilized now.” Now, Zocdoc is debuting the product of that plan: a new video visit service, which allows anyone to schedule an appointment through Zocdoc and meet with their doctor remotely through the platform.
The Zocdoc team took advantage of a momentous move by the Department of Health and Human Services, which relaxed privacy requirements for telehealth in response to the pandemic, allowing doctors to take video visits on platforms like FaceTime and Skype. Within weeks, the company launched a feature that allowed patients to schedule video visits with their doctors, which the doctors would then carry out on the video tool of their choice. The service exploded, with 3,000 doctors signing up within the first three weeks and hundreds more signing up each day after that. Elsewhere, the telehealth market has been booming. Teladoc announced it powered 2 million visits during the first quarter of 2020, a 92% increase from the same period last year, and increased its 2020 revenue expectation by about $100 million. Meanwhile, Congress’ stimulus package set aside $200 million for telehealth.
Procter & Gamble and Shopee are scaling up the FMCG company’s ‘Show Me My Home’ concept with the aim of making digital transactions more tangible for shoppers. Originally designed for the physical store experience, ‘Show Me My Home’ has been taken online via Shopee’s e-commerce platform. The website takes shoppers through a P&G product shopping experience, categorizing products by rooms of the house. Kim Dong Hyun, regional director, e-commerce for APAC Middle East and Africa at P&G says the concept originated from insights into the way people think and act when they are shopping. “This campaign is designed to help consumers by making a digital platform more realistic. Our setup of different rooms creates an experience that enables shoppers to find what they need faster and easier. These rooms act as more natural categories that trigger remembering forgotten items and encourage a better shopping experience,” he says. “For example, when a shopper browses the laundry aisle, they may pick up detergent and proceed to think about getting a fabric enhancer because of a natural association made within the laundry category. Facilitating these category adjacencies or associations makes the shopping experience more natural. We use this strategy in brick-and-mortar stores. We wanted to execute this strategy on an e-commerce platform,” adds Kim. Shopee says that this more experiential approach to e-commerce is a trend it was already investing in, noting its Shopee Live and Shopee Feed functionalities. Ian Ho, regional managing director at Shopee, says: “Even before the Covid-19 situation, we have observed that people want to do more than just shop online. Users are demanding greater engagement and social interaction while they shop on the platform. In light of the recent lockdowns in some of our markets, we have also observed an accelerated demand for greater engagement and social interaction on our platform.” The merging of entertainment and commerce is something that e-commerce brands in Asia Pacific are leading the charge on. Driven by trends originally identified in China, major brands such as Alibaba, JD.com, Lazada, Pomelo and Zalora are all using technology such as live streams to fuse entertainment with transactions.