Using the Crisis as an Opportunity

There are many trends from 2020 that are still relevant in 2021, some others that are new, and again others that are changing. We work closely with our e-commerce and retail clients and as a result, we have a lot of insights into what’s happening in the market and how it’s evolving. We would like to share this information with you. Dr. Mark Mette, a member of the executive board at 3Pagen, summarized wonderfully what was important in marketing and CRM in 2020:

“It’s not the time for strategists, it’s the time for tacticians.”

– Dr. Mark Mette, Member of the executive board, 3Pagen GmbH

Constant, short-term changes in market conditions nowadays forbid to only persist with tried-and-tested strategies that had been planned for the long run. Instead, we recommend trying to use the corona crisis as an opportunity and would like to give an example of how to do this.

A Multi-Channel Fashion Retail Company Demonstrates Fast Action

Due to the first corona lockdown in spring 2020, a fashion retailer that generated most of its revenue through the store-based business was suddenly faced with significantly less revenue in this period. So the challenge arose to keep the sales as high as possible through its online business. Using quickly set-up predictive models from the CrossEngage Customer Prediction Platform (CPP), the fashion retail company was able to identify a customer target group that had previously only bought from stationary stores, but for whom there was nevertheless a high affinity for online purchases.

So, the fashion retail company sent out print mailings to this target group offering the possibilities of online purchases with a voucher. After evaluation, it turned out that the campaign generated a lift of + 69 % on conversion and + 135 % on contact value compared to a control group.

What happened? First of all, actions were taken very quickly here – and a tactic was implemented, not a strategy. It was possible to convert single-channel customers into multi-channel customers. This goal also existed in the company before the corona crisis, but it was the crisis that forced the responsible people to act quickly. It was particularly pleasing that these new multi-channel customers generated significantly more sales than before, even after the first lockdown.

Trends from 2020

However, sales in the stationary store business did not develop positively in the long term. This distinction between store business and mail-order business is very important for understanding the trends from 2020 in e-commerce and retail. We have observed the following trends in cooperation with our many clients:

CRM Trends in 2021

Looking at the table, you can see immediately that mail-order businesses (especially online businesses) benefited greatly from the crisis. Also, multi-channel companies showed good conditions for further positive development, as our example of the fashion store from above shows impressively.

The relationship between the development of new customer rates and second purchase rates is also mentionable. It is interesting to note that the acquisition of new customers seems to work better than the conversion to regular customers. Often, the second purchase is a clear indication that more purchases will follow. The second purchase often takes place in the first few weeks after the first purchase.

How to Unlock Your Potential in 2021

This offers a great, but often not used potential, which could quickly become a problem in 2021 and the following years. In 2020, the average CPM (Cost Per Mille or Cost Per Thousand Contacts, a key figure from media planning) rose by almost 100% and the average CPC (Cost Per Click) rose by almost 50%. Thus, the costs for customer acquisition are increasing continuously.

Wouldn’t it, therefore, be wise to focus more on retention marketing in order not to fall victim to this development? Find out how this can be achieved, which seven other trends we have identified for 2021, and how you can use them for your company in our recorded webinar: