There isn’t a single business that hasn’t been affected in some way by the ongoing global COVID-19 pandemic. As the UK settles into its second nationwide lockdown, high street retailers have been hard-hit as stores shut up shop once again. Hospitality is likewise feeling the impact as pubs, bars and restaurants close their doors. And with many countries keeping their borders closed, the travel industry is suffering heavy losses too. But what about the impact of COVID-19 on agencies?
As a digital agency, something we’ve heard time and again throughout this extraordinary period is this: “You guys are all about digital, so you must be doing really well!” And it’s a logical assumption. Getting through this pandemic would have been much harder for us all without an online world at our fingertips, and lots of businesses have indeed looked to bolster their digital offerings during this time – with both the technology and ecommerce industries seeing growth of 16% and 15% respectively.
But being a business with a focus on digital doesn’t automatically equate to doing well during the pandemic; it’s not quite as simple as that. As March brought the beginning of the UK lockdown – and with it a great deal of uncertainty – more than 50% of digital agencies experienced a decrease in new lead enquiries, while over two thirds saw their revenue drop.
Organic definitely wasn’t exempt from this trend – we lost approximately £400,000 of committed revenue in the first two weeks of March as anticipated projects were put on hold by clients.
A great deal of agencies have been forced to furlough or lay off employees altogether, with global agency BBH cutting 20% of its US staff in May. And in many cases it’s larger firms like BBH which have been particularly hard-hit as the pandemic continues. At the same time, specialist agencies reliant on the worst affected industries such as travel have suffered considerably, while generalist agencies have seen their clients in these sectors ‘decimated’.
Clearly, it’s not been plain sailing. But COVID-19 has forced changes in the way we shop and conduct business – and with change comes opportunity. The pandemic has necessitated ultra-fast digital adoption for businesses in an array of sectors – from retail right through to financial services – in order to respond to altered consumer behaviours and meet consumer needs. In fact, we’ve seen 10 years’ worth of digital adoption in mere months.
It’s something we’ve termed ‘The Great Shift’ – a rapid acceleration of digitally driven trends already happening – and COVID-19 is the main driver. What’s more, COVID-19 has disrupted ‘business as usual’ to such an extent that – despite all the difficulties it’s brought – it’s the ideal time for many businesses to commit to digital transformation.
So, for Organic, what is this looking like in practice? We’re seeing big changes in the nature of the work we’re doing for clients, and one of the most notable changes is a rise in demand for Direct to Consumer (D2C).
The past decade has seen the emergence of more than 500 D2C start-ups, so the D2C model itself certainly isn’t new. However, the pandemic constitutes an extraordinary time during which it’s imperative that businesses seek out and secure new ways to continue to reach and serve their customers. Now that digital has become more significant than ever, going direct is a crucial chance for brands to do this.
Our own work for a leading food and beverage company is just one example of D2C projects we’ve been approached about since the pandemic began. Hampered by supermarket restrictions and in need of a way to fulfil consumer requirements for their essential products, this brand enlisted our help in setting up their first ever D2C channel using Shopify Plus.
While our D2C whitepaper explores the D2C opportunity in detail, something worth mentioning here is the benefit of going direct when it comes to brand ownership and the customer experience. Our Creative Strategist Ben Cooper believes a positive brand experience is just as important as a positive digital experience; the two must coincide. This is especially important during these unusual times, and the D2C model is serving as a way for many brands to retain control of their offering and remain front-of-mind with customers.
D2C e-commerce channels will remain a priority for businesses as we head into a second national lockdown in the UK, and it goes without saying that brands should also be paying attention to other important elements such as SEO. SEO must be at the heart of any successful e-commerce strategy – and brands need to make sure it’s serving customers, not search engines, to ensure success.
From speaking to other agencies, it’s evident that the move towards D2C as a direct response to COVID-19 is something they’re seeing among their own clients as well. Sheffield-based digital agency Quba reported more projects from their financial services client-base, with a major upturn in D2C, new web apps and medium web builds.
Craig Pickles, Technical Director at Headland in Leeds, also added that “the nature of the work has changed dramatically to offer more online information, click and collect and delivery services.”
What’s become clear above all else during the COVID-19 pandemic is that clients are having to adapt – and so too are digital agencies. It’s essential that we’re able to recognise and act on opportunities to fulfil our clients’ changing needs – and there’s every chance that these needs might remain permanently altered.
A June study revealed that 57% of agencies anticipated the impact of COVID-19 lasting more than six months, but as we brace for a second wave, it seems that the effects could rumble on for much longer. For brands, digital is now the primary means of reaching customers. And the longer things stay this way, and the more normal it becomes, then the more likely it is that we’ll see lasting change.