Coffee & Commerce with Cascone: First Time for Everything

At the onset of COVID-19, one thing became clear: Retailers needed guidance. In an effort to help brands operate effectively and efficiently in this digital world, we launched Coffee & Commerce with Cascone: A biweekly series with bite-sized episodes tackling the latest in retail, featuring established marketers from today’s biggest brands. In our inaugural episode, Bluecore’s Senior Director of Marketing, Sarah Cascone, unpacks ecommerce trends across five sub-verticals and three business models.

Welcome to Coffee & Commerce with Cascone. This program is designed to bring you retail-specific trends on a biweekly basis to guide your digital marketing efforts during a time when every day is different and the phrase “the only constant is change” has never been more true.

At Bluecore we have access to shopper data across more than 400 brands that represent over 15% of the non-Amazon gross merchandising value in the United States. In this episode, we’ll look at a representative sampling from that data across five sub-verticals (Luxury, Apparel, Beauty, Pharmacy, Sports & Outdoors) and three business models (Digital Natives, Department Stores, Chain Stores). We’ll look at the changes in online purchases, including total purchases, first-time buyers and second-time buyers, as well as online activity, including email signups, product views and add to carts. 

Let’s start from what’s happening on a macro level and then dig a little deeper into our data.

According to a recent article by eMarketer, total retail sales in the US will drop by 10.5% this year and even with ecommerce jumping 18%, it’s not enough to make up the difference. In fact, eMarketer predicts that it will take until about 2022 for retail sales to rebound to normal levels.

But with ecommerce sales up 9% MoM and up 30% YoY and the industry ripe for innovation, we at Bluecore believe brands have the ability to accelerate that timeline through digital. Even as stores begin to reopen, brands are preparing for a permanent shift to a 50/50 split between store and ecommerce.

We have data pointing to opportunities that focus on driving repeat purchases and retention through digital, which will have an outsized impact on recovery.

Let’s dig in.

Not only are all sub-verticals seeing an increase in overall purchases online, which validate the jump in overall ecommerce sales I spoke about earlier, but we’re also seeing an increase in first-time buyers, with the exception of beauty, which I’ll get back to shortly.

What does this mean?

• The increase in first-time buyers show a level of experimentation among consumers even outside of an essential category such as Pharmacy. With the click of a button, consumers can discover a whole new brand with a whole new set of products that they may not have considered otherwise. This is an indication of the acceleration of the 50/50 shift.
• There’s also a chance these first-time buyers represent the act of “revenge-spending” as dubbed by a recent CNBC article, where consumers who would normally be spending on travel and dining are now shifting that spend elsewhere, for example to luxury brands.
• Now it’s important to understand that across reported benchmarks, a typical brand sees the majority of their customers only buy one time. With acquisition costs on the rise, this makes it harder and harder to get payback on a first-time purchaser. So what’s the big takeaway from this? You need to re-engage these first-time buyers and get them to their second purchase. A second-time buyer is 130% more valuable than a first-time buyer and if brands improved their second purchase rate by just 1%, they could improve top-line revenue by 7%.
• How, you ask? We have resources here and here that provide examples of how the retailers with which Bluecore works are doing this.

Now before we end, I want to circle back to the data point about beauty’s overall lack of first-time buyers, which isn’t necessarily a bad thing considering they are still seeing a big spike in overall purchases. This could indicate that beauty shoppers are sticking with what they know and returning to places they’ve shopped before. Since beauty has historically been great at driving discovery and building loyalty, for example by providing content like online tutorials, and even during this time, shifting store personnel to do things like FaceTime consultations, it makes returning for another purchase that much easier. One of the most prominent places we see this type of experience is in Sephora’s Beauty Insider Program.

Ready for More?

Ready for more insights and analysis on the latest trends? Click here for the full episode library of Coffee & Commerce with Cascone.