For the past few months I've been writing about the importance of data to a Direct-to-Consumer company's success. In light of the coronavirus pandemic, the insights that data provides have never been more critical than they are right now. Every day we rely on data to make decisions about how to manage effectively through this crisis so that we come out the other side not just standing but positioned for even greater growth and success.
Like a lot of DTC businesses, particularly those selling goods for the home, our luxury mattress company has seen a sales lift in recent weeks from the consumer shift to online, following a slight dip at the start of the coronavirus lockdown. Understanding these trends--and responding to them--requires synthesizing a lot of information. Here are nine data points that inform the actions we take across every corner of our business, starting with one of the simplest but most revealing: What we learn from watching Google search.
Coronavirus search volume. In mid-February, searches for coronavirus began to climb. At the same time, we saw a slight dip in mattress sales. Here's what it looked like:
That told us, not surprisingly, that there was an inverse correlation between coronavirus searches and revenue. But search volume wasn't the same everywhere. So we started tracking searches on a state-by-state basis to pinpoint where it made sense to spend marketing dollars, investing in the places where coronavirus searches were low and pulling back in places where they were high. That allowed us to focus our efforts on the markets where we were likely to see the highest returns.
Online shopping trends. With people confined at home, we began to see increased searches for the mattress accessories that we sell, like bed linens, pillows, and mattress toppers. This chart from Klaviyo shows the rise in demand for "new essentials" for stay-at-home consumers:
Ramping up our advertising to meet that demand benefits us in a couple of ways. There's the obvious one of selling more sheets and pillows, of course, but because it costs less to advertise against these terms than against mattress-related terms, it's a less expensive way to drive traffic to our site at a time when we are watching every penny. Ditto for producing and promoting blog content that answers the questions people are asking. Over the course of the past month, our content team has churned out more than two dozen articles about the coronavirus and its impact on sleep and sleep health. Even if someone is not in the market for one of our products now, discovering our brand through helpful content may bring them back to us in the future.
Delivery trends. White glove delivery has always been one of the things that distinguishes Saatva as a brand. Before Covid, 100% of our customers took advantage of in-home delivery and setup. Since March, that number has been dropping--first to 80%, then 70%, currently around 65% of people choose in-home delivery and 35% request contactless dropoff. We watch those numbers every day--when I begin to see the trend reverse, I will know that markets are opening up. In the meantime, we made sure to add information about contactless delivery to our on-site experience and in our marketing materials.
Affiliate performance. Like most e-commerce companies, Saatva has relationships with media and review sites that offer a portal to purchase. While sales on our own platform dipped in the month of March, traffic from affiliates held steady. That suggested to us that people who couldn't go to a retail store to buy a mattress right now were going online for reliable sources of information. So we made sure to nurture our affiliate relationships and even use the opportunity to add to our affiliate roster. We were fortunate, too, that during this time Consumer Reports published a review of Solaire, our new customizable air mattress.
Geographic revenue trends. Much has been made of the fact that there is no federal program for reopening the economy. It's happening on a state-by-state basis. So we look at performance state by state for clues to how people are feeling. In states where social distancing and lockdowns were imposed early in the pandemic, like New York and California, the upswing in shopping began as soon as the first signs of infection spread flattened:
In addition to simply adjusting marketing dollars depending on whether we think a DMA is rebounding, there may also be a need for differentiated messaging in places where restrictions are loosening versus the places that are likely to be on lockdown for some time.
Impression share. The mattress business is a highly competitive one, and never more than now, when out of necessity offline retailers are moving their operations online. As a result we're seeing a rapidly changing online landscape, with DTC competitors who can afford to do so ramping up their ad spend while many brick-and-mortar retailers who previously ignored spending dollars on paid search enter the fray. Impression data tells us, on a zip code by zip code level, what the competition is doing. One thing we've noticed is that because many of those offline brands lack deep digital marketing experience, they are overspending in inefficient ways and may be making business better for everyone, not just themselves, as more advertising often leads to more consumer demand.
China trends. The U.S. appears to mirror China behaviorally, so we learn what we can from retail trends in China, which is several months ahead of us in this crisis. While brick-and-mortar stores have reopened, traffic is way off--in some cases only 50% of what it was before the crisis--and buying behavior, especially among millennials and Gen X, has shifted to digital:
This new paradigm is likely to continue for the foreseeable future. That means I can no longer afford to think about our market share just in terms of the online market. When the 85% of consumers who currently shop in stores start shifting their behavior, "online" may become the norm and not the exception. One thing is clear: The Chinese companies that have demonstrated the most resilience are the ones that leverage insights from data to deliver the products and experiences their customers want.
Stock market trends. I try not to read too much into this one, although I couldn't help but notice that our recent lowest revenue day correlated almost exactly with one of the market's biggest drops. But in the past month we've had really big days when the market was down and really crummy days when the market was up. All I know is, if it's up for several days in a row, odds are we're going to do better. It doesn't necessarily affect my decision making, but it helps me brace myself against the dizzying highs and lows.
The view from my window. I need look no further than New York--and more specifically Queens, the borough where Saatva is headquartered and the bulls-eye in the center of the Covid crisis--to get a sense of the health of my business. When I can look out my office window and see traffic on the Whitestone Expressway again, when customers start coming back to our Midtown Manhattan viewing room, I'll know that people are starting to feel confident that we are coming to the end of this crisis, and when that happens I want my business to be there for them, stronger and better than ever.
Ron Rudzin is President and CEO of luxury mattress brand Saatva