by Rick Smith — April 13, 2020
Editor’s note: Zach Clayton is the CEO of Three Ships, a digital media company with offices in Raleigh and Charlotte. He is a Raleigh native.
RALEIGH – As the CEO of Three Ships, a digital media company that operates a network of rating and reviews websites, my team has access to real-time data on how consumers have responded to North Carolina’s “stay at home” order.
The impact is severe. Searches for Raleigh restaurants have all but fallen to zero. Searches for Crabtree Valley Mall are down 57%. Searches in Raleigh-Durham for “dry cleaning” are down 71%, “hair salon” are down 76%, and “RDU Airport” are down 82%. Searches for “med spa” fell 84% from early March to late March, and they have now dropped to essentially nothing.
Similar to companies such as LendingTree or Priceline, my business uses a performance marketing business model which gives us complete visibility into how different companies are converting website traffic into sales. This data can help us better understand the economic impact of COVID-19 and inform the way business and community leaders prepare for exit.
The lights are off at the Cameron Village’s Mattress Firm store, yet online mattress sales are up 21%.
During the last four weeks, we have witnessed significant changes in consumer behavior that may persist long after the immediate crisis ends. Across our major properties, here is a survey into the data we are seeing on how consumer demand is shifting:
- Mattress Advisor and Mattress Nerd
Our flagship mattress review websites work with every major U.S. mattress company. We saw a 32% decline in traffic and conversions the week of March 9th as shutdowns began and virus concerns proliferated. But even on Monday, March 16th as stocks plummeted nearly 13%, online mattress sales remained steady – just 22% what we would have expected on a typical Monday. As the week continued, the online market bounced back. This last week, online mattress sales paced 21% above our expectations for a normal, “non-COVID-19” week.
- Review Home Warranties
Our expert home warranty review website works with all ten of the top ten home warranty companies. Home warranty purchases actually grew through the 2008-2009 financial crisis because people viewed a home warranty as a type of insurance against unexpected home appliance expenses. Consumer search interest, measured by the number of people searching for the category on Bing or Google, is down 27%. But among those who do search, they are purchasing at roughly the same rate.
- House Method
A steady spot in the economy is home services. Our lawn service review website has seen traffic and revenue increase 17% beyond what’s expected even as weather turns warmer. With few entertainment options, people are spending money on their lawn. Phone call leads into the largest company, Trugreen, are converting into sales at higher rates than this time last year. Local contractors see a mixed bag: maintenance and repair interest is higher as people are stuck at home and using it more, but demand for installation or upgrade projects is down by almost half.
- Motor 1
We publish reviews and create tools to help consumers find cheaper auto insurance. Even though auto insurance is required for vehicle owners, search traffic is 42% lower for auto insurance terms during the last three weeks. Meanwhile, auto insurance companies are making record profit because there are so many fewer accidents.
- Compare Car Warranties
Our car warranty comparison website saw a dramatic decline in the number of people purchasing since states implemented widespread stay-at-home orders. Car warranty sales decreased 61% from the first week of March to the last week of March. While data in April suggests we have hit the bottom, we don’t expect that driver demand for auto products will fully rebound until stay-at-home orders are lifted.
- Medicare Experts USA
Search volume from seniors looking for Medicare insurance has stayed relatively stable although sales conversion rates have exploded. People who are older than 65 and eligible for Medicare have spent time researching whether Medicare covers COVID-19 treatment and determining whether they have the best Medicare Supplement plan to fit the new situation. If someone was considering enrolling in a new plan, the risk of a medical emergency has increased their urgency to do so.
- Remedy Review
While grocery stores remain open, many consumers are purchasing goods online including natural health products such as cannabidiol or CBD oil. In the last week, online CBD sales are up 63% relative to what we would expect. One reason? People seeking relief from anxiety.
How society will change
Last week the Queen of England compared the current moment to World War II, which was followed by the GI Bill, the Baby Boom, migration to the suburbs, the growth of the middle class, and many more profound changes to society. How will our COVID-19 lockdown change society?
Our team expects to see these trends:
- More people eating at home. Search volume for meal kits hit an all-time high during the second half of March. As Millennials learn to cook, they may find they like it. Restaurants and bars will face a new headwind as they reopen.
- Online shopping and delivery grows. Amazon is hiring 100,000 new workers to handle its increase in demand. Many people are shifting purchasing habits and will find they will not go back to the old ways of doing things, which will hurt restaurants.
- Brokers and “middlemen” will struggle. Insurance brokers have found their clients no longer want to meet face-to-face. We expect to see in-person distribution for financial service products falter as robo-advisors and online marketplaces like Bankrate prosper.
- Work from Home will be normal. Businesses that took the leap to running themselves more remotely will find it hard to go back to the old way of doing things. We anticipate more work-life integration and more flexibility from employers.
- Greater comfort with online education. The emergence of online education as a real substitute for on-campus experience will place pressure on more expensive colleges to justify the high cost of tuition.
The United States is a resilient country, and we will certainly come back from this awful public health crisis. When we do so, our economy will almost certainly look different – creating new winners and new losers. As a community, the sooner we figure out what to expect, the more quickly we can rebound and rebuild.
(C) Three Ships Media