Life after COVID-19: The changing face of retail

The ongoing Movement Control Order (MCO) has reshaped the business landscape in Malaysia, leaving businesses scrambling to make profit and SMEs taking the brunt of this blow. Tried-and-tested methods have to be abandoned to give way to innovative strategies and reverse the monetary damage.

This undoubtedly shakes up the retail industry, with some businesses reporting a drop in sales of up to 90%. According to a study by Adqlo, which surveyed 8,220 brand profiles reveals sectors that have changed significantly due to COVID-19, and the measures they have taken during these critical times.

1. Food and beverage

Although classified as an essential sector, a halt in dine-in operations has led to major drops in revenue. Before the implementation of the MCO, only 21% of the food and beverage businesses are available to be ordered online.

Within 30 days of the MCO implementation which sees businesses restricted to only providing takeaway and delivery options, the number of businesses that expanded their operations online almost doubled up to 46% in order to deal with the increased demand for food delivery services, according to data from Facebook and Instagram.

According to Adqlo, there also a noticeable shift when it came to eCommerce platforms distribution. On both Facebook and Instagram, more brands have shifted their focus to online food delivery platforms such as GrabFood and foodpanda. Call-to-actions leading to GrabFood in particular, saw an increase from 22% to 32% on Facebook and a drastic increase from 18% to 36% on Instagram.

Increased content sharing on social media platforms has also more than doubled the interactions with public. 

One key point noted was the increase in video posts, and significant decrease in photo posts. Companies are focused on connecting with their audience through personalised video content.

They were quick to come up with fun solutions like DIY cooking kits and popular recipes instructions that ensured business continuity. Mix.com.my, for example, took the lead in digitalisation by developing content that resonated with its audience. Having the highest number of shares on Facebook and Instagram, it published viral recipes, wellness tips and memes relating to the new daily routines in Malaysia.

2. ECommerce

The eCommerce industry has thrived exceptionally with the implementation of the MCO. While other industries struggle to survive, the eCommerce industry booms with more businesses pivoting to digital platforms to adjust to consumers’ shifting expenditure patterns.

Understanding the new expense area on essential goods and supplies, major eCommerce platforms such as Shopee grab the opportunity to profit by providing eye-catching promotions on groceries, fashion, and kitchen appliances. According to Adqlo, Shopee pairs its offerings with a comprehensive and aggressive ad strategy to clinch the top spot as the most popular eCommerce platform in the nation. This strategy is seen even during MCO, with the platform having 184.9% more ad sets compared to Lazada during the period of 14 to 17 April; the majority of these ad sets are promotions which drives traffic to its official app.

Meanwhile, 50% of Lazada’s ad sets promote its business stimulus package which entitles sellers to customised benefits such as free shipping services and access micro loan facilities. Its ads also focus on sellers recruitment through "Pakej Kedai Pintar" and the rest pushing brand days and product promotions.

Another eCommerce platform, Hermo, also highlighted its hair care campaign with 52% of its ad sets while 34% feature brand-wide promotions. According to Adqlo, its main ad strategy directs consumers to product pages where they can make purchase on the spot via its website.

In April, Hermo partnered up with Rely to launch the “Buy Now, Pay Later” instalment programme, offering consumers the option to pay for their purchases in interest-free instalments. Adqlo explained that this looks to be a response to Malaysians’ decreased spending.

Separately, Adqlo found that Sephora's social media ad strategy was unfazed by the effects of MCO, with 60% of its ad content type focusing on product highlights. Of those, 53% of it features makeup and 24% on skincare. There was also a significant emphasis on pushing for downloads of Sephora’s official app, with 19% directed towards app downloads, 6% to first purchase promos and 8% to Beauty Pass Exclusive promos.

According to Adqlo, a large portion of Sephora's ads from 14 to 17 April 2020 featured globally recognised brands like Fenty Beauty, Clinique, and Urban Decay, which could be Sephora’s strategy to leverage on the popularity of big beauty brands to achieve their objectives: sales, sign-ups, and app downloads.

Meanwhile, Zalora launched the household essential category on 23 March, roughly a week after the MCO was implemented. The diversification of its offerings looks to be addressing consumers’ demand of daily necessities during the pandemic. The launch of this new category also coincides with a rise on search interest of Zalora on Google the very same day.

Zalora’s ad strategy mainly pushes product promotions, with 58% of its ads driving traffic to product pages. Aside from product ads, Zalora also directed 42% of its ads towards the official Zalora App download.

3. Fashion

Fashion brands have seen a steep decline in foot traffic to malls and public spaces, following the MCO. Business adaptations have led to a 14% increase in online business, in an effort to adapt to the latest trend of online shopping.

Overall, brands explored with innovative content such as online short films, skits, music videos, and more to both address the challenges faced by consumers during this period as well as push brand awareness and sales.

Despite a major dip in total interactions within the first month of MCO, the industry has seen a spike in comments in the second half of the month. FashionValet had three posts with the highest comment interactions, which was achieved through giveaways requiring consumers to tag their friends in order to win. Yet, in terms of overall interactions, View Fashion, ChiangHeng Jewellery and Converse took the top places on Facebook.

According to Adqlo, there was a significant increase in the number of businesses that converted to online business models during the MCO. An additional 200% of business channelled their Facebook and Instagram product promotions to Lazada. This could be attributed to Lazada’s business stimulus package in support of eCommerce entrepreneurs and SMEs, which offers a series of customised benefits to businesses during these challenging times, Adqlo said.

While eCommerce platforms have helped soften the blow for the fashion industry, brands have continued to produce more varied content to reach their consumers online. This was done not just to push sales but to maintain a strong connection within the community. Adoption of technologies and trends will likely be accelerated to adapt to the changes in consumer behaviour during the MCO.

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4. Leisure and entertainment

Often linked with face-to-face interactions, this sector had to look for alternatives to reach out to their target audience at home. It saw a sharp fall of 91% in total interactions on 18 to 24 March 2020. Following the implementation of the MCO, the leisure and entertainment industry saw an increase of 14% conversion on Facebook and Instagram to digitalise businesses. According to Adqlo, the barrier on face-to-face interaction during the MCO suggests these non-digital native brands are looking for alternatives to reach out to their target audience at home.

Prior to the MCO, businesses on Facebook have been directing consumers to WhatsApp for eCommerce purposes. However, there has been a significant increase in businesses directing consumers to both Shopee and Lazada during the MCO period. For businesses on Instagram, there has been an increase in call to actions leading to WhatsApp instead.

That said, WhatsApp remained the preferred platform for businesses in the leisure and entertainment industry when it came to doing eCommerce.

Some solutions by brands to overcome the fall consisted of local movie trailers, contests, cat videos, music instrument ads, and movie recommendations. The top three brands which managed to increase interactions successfully were GSCinemas, mmCineplexes and TGV Cinemas.

Overall, brands took this opportunity to create content that could resonate with their audience who were stricken and isolated by the quarantine.

5. Social media influencers

With strict restrictions on travel, content creation by influencers on travelling, tourism and culture has been compromised. Instagram postings decreased by 70% for photo format and 46.7% for video format content. Hence, many influencers started the trend of sharing their personal lifestyles and daily routines at home, in an effort to connect with their followers.

Interestingly, for technology and games social media influencers, the highest used hashtags shifted from #gaming and #gamingclips to #tiktok and #kstyle. None of the top 30 Instagram posts were related to games in its traditional sense, but rather to anime, cartoons, and most of all—cosplay girls. 

Comparing before and after MCO, technology and games related posts dropped 66% for photo format content whereas video format content had a relatively small decrease of 37%.

Meanwhile, health and wellness-related posts also dropped 65% on photo format content with video content at a 43% decline.

6. Hotels

Undeniably one of the hardest hit industries in the pandemic, the mass cancellations and ban on new bookings have brought the industry to its knees. With little advantage of advertising hotels online, businesses shifted their advertising focus to increasing audience interaction via trending content.

Riding on the hype of viral internet videos, hotels posted cooking demonstrations done by in-house chefs, re-created the Dalgona coffee and dived into BTS hype. Their shoutouts to frontline workers and exciting online contests ensured top of mind awareness during the MCO. This also led to a shift in eCommerce platforms used, with more hotels adopting usage of food delivery platforms such as foodpanda and GrabFood, as well as WhatsApp for convenient reach to their consumers.

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