How Another Round Stimulus Checks Could Affect E-Commerce Performance

At the risk of stating the obvious, the past few months have been a rollercoaster ride for many retailers. The rise of the coronavirus pandemic resulted in many businesses losing revenue and needing to shift their sales strategy. This is especially true for businesses that rely heavily on brick-and-mortar sales. But something different happened for eCommerce businesses. After a month of initial sales losses, the tides began to turn. People’s purchasing behavior has shifted from in person to online—a move fueled by one particular action in the United States: stimulus checks. 

Now, Congress is once again hotly debating a new relief package that may strongly resemble the CARES Act that was passed in April. It looks like that won’t happen until September at the earliest, but is still high on the minds of all members of government. With this in mind, we review the data from around the time of the first round of stimulus checks to try and predict how consumer shopping behaviors might shift again during this second round. 

Onsite eCommerce sales could spike by 53%

During the first round of stimulus checks we noticed that website visits and revenue for retailers immediately spiked and continued to rise for 2-3 more weeks before slowly starting to decrease to pre-relief package levels in the summer. 

When looking at data from the week before stimulus checks were sent until performance peaked in mid May, we noticed that retailers saw a gradual increase of site traffic. In fact, 4 weeks after checks were sent they were seeing an average of 21% more weekly site traffic than before the checks were sent. 

Think that’s good? The change in site revenue was even more positive for eCommerce brands. Moreover, this increase in revenue was nearly immediate, and steady for multiple weeks on end. 

Within the first week of stimulus checks being sent, revenue jumped 25%. This number slowly increased over the coming weeks—showing retailers gaining an average of 53% more weekly site revenue in the middle of May than at the same point in April. When a new round of checks is sent out, make sure you allocate enough marketing budget to bringing and identifying new users to your site so that you can take advantage of this spike in retail spending. 

Conversion rates will likely only alter between .5 – 1%

Perhaps unsurprisingly, given the strong increase in traffic, the conversion rates that our retailers were seeing did not drastically increase throughout the weeks that occurred after the stimulus checks were sent out. In fact, they only altered between .5 – 1% from late March through the end of July. This signifies a couple things. The first is that your conversion rates won’t be negatively affected by this increase in traffic. That’s a really great sign and, at the end of the day, means more money in your pocket. 

The second thing it means is that you shouldn’t feel the need to look into how you can juice your AOV. If you do try to get more money per customer, it will likely affect this conversion rate and could mean lower revenues for your business. Instead, focus on how you can continue to bring high-intent audiences to your site at this time as this will tie into that increase in revenue we discussed earlier. One of the easiest ways to do this is to engage you owned marketing channels with one-to-one messaging across SMS & email. 

Competitors will be slow to act on round two

Even with this strong performance, don’t expect your competitors to jump out and change their marketing tactics too much. When looking at our data, we noticed that retailers didn’t increase much of their marketing efforts until after April had ended. Case in point, email sends only increased to about 17% higher a month after stimulus checks were first sent out—a sizable amount but not the video-game metrics we’re seeing above. Moreover, sends were actually more than 2% lower the week after the checks were sent. The only significant metric to drop in the week or two after checks were sent. 

This shows that many retailers waited until they were seeing a boost in sales before they revved back up their marketing engines. Don’t make that same mistake during the second round of stimulus checks. Ramp up marketing when they make the announcement around when the checks will send to beat out competitors and capitalize on buyers looking to spend some of their extra cash right away. 

Email revenue could jump 34% in the first week

In just the first week after the original round of checks were sent out, email revenue improved by 34%. And the improvement hasn’t slowed down from there. Revenue was still 32% higher at the end of July than it was at the end of March. This shows that people are looking to email as a way to shop during the pandemic. Explode into this channel as the next wave of checks go out to maximize the amount of revenue your brand can attain. When doing this, please note to keep your sends up. We did notice a slight drop in revenue driven from email in the second week after checks were sent out. This is likely because marketers decreased their sends and weren’t taking advantage of their increase in site traffic. 

During the first wave of stimulus checks, many eCommerce companies effectively erased their March losses and drove significant amounts of conversions through the digital side of their business. If this, as well as the current stock market performance, is any indicator, then retailers can expect to see an uptick in sales during this second wave of aid. How big that uptick is depends on how quickly you’re able to identify and market to your site’s new and returning customers. 

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Elliott Moore

Elliott Moore is Senior Marketing Manager for Wunderkind, fka BounceX. In his role, Elliott oversees Wunderkind’s content team initiatives across the website, blog, case studies, guides, product marketing support, PR, and more. A midwest native, Elliott has spent that past 6+ years working in MarTech at firms in New York, San Francisco, and Helsinki. When not working, he can be found running or drinking IPAs throughout Brooklyn.