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COVID-19 insights & trends (May 19 edition)

As consumers remain home, search has grown in increasing importance. It helps brands stay connected with consumers and highlights new and emerging behavior trends. Our goal is to continue to provide you with new and updated search trends on a weekly basis as you adjust to the ongoing changes in search behavior.
 
Let’s start by exploring a few themes in depth.

What does the future hold? A look at online retail.

In the first quarterly earnings report amidst the COVID-19 era, Microsoft CEO Satya Nadella stated that “We’ve seen two years’ worth of digital transformation in two months.” While there’s no mistaking that the coronavirus has fueled this rapid acceleration, it was by no means the initial catalyst. No, this digital transformation began long ago with the dawn of the internet and the introduction of the smartphone; it led to the rise of convenience culture and a widespread shift to online shopping. As of 2019, online retail has surpassed its brick-and-mortar counterpart in total sales according to the Commerce Department. These technologically savvy shoppers also have different preferences and, in a recent NRF study, 9 of 10 individuals said they’re more likely to choose a retailer based on convenience. In our current climate, the line between necessity and convenience while shopping is beginning to blur, and this is changing the consumption habits of people around the world.

To prepare for what lies ahead, there are some trends of which online retailers need to be aware—the biggest being that search demand for non-essential products is finally beginning to rebound. This can be seen in the positive single digit year-over-year (YoY) growth for apparel and gifts in early May, both of which were down since the beginning of COVID-19. Even larger gains were made in the fitness and home improvement categories, which both had a lift of over 50% YoY. While demand for essential products like groceries never faltered, these latest metrics bode well for the rest of the online retail community that sells products outside of core essentials.
 
Source: Stay-at-home consumer (U.S.)

What was old is new in automotive.

When analyzing data during the COVID-19 era, you’ll often find a handful of subcategories that buck the trend and don’t fit into the statistical theme of the overarching vertical. Luckily, this is not the case for the latest auto trends. In fact, they follow an easy rule of thumb: New vehicle searches are down and used searches are up. This of course is an oversimplification, but it holds true for our U.S. auto data when comparing the month of April to March. During this time, overall searches for new vehicles were down by 35% while searches for used vehicles were up 10%. The delta in search volume between new and used queries becomes even greater when looking at modified searches like those that contain luxury or economy terms, the latter of which are faring better. 
 
There are two major forces at play here that are contributing to this trend: unemployment and the greater need for vehicles during a time of social distancing. To ground this statement in data, the U.S. Bureau of Labor Statistics reported that unemployment jumped over 10% from March to April, bringing the April total to 14.7%. This sudden increase has larger economic implications, but for the near-term scope of the auto industry, it means consumers have less disposable income for big ticket purchases. The result is that used cars and trucks are now a more viable option for many customers.
 
So, why are so many people searching for used cars during a pandemic? One reason is to get around without exposing themselves to shared spaces. According to our latest data out of Australia, 37% of individuals stated they are less likely to use public transportation. In correlation, 59% of non-car owners said they are now more likely to consider buying a car. This newfound interest in buying a car is being driven by the need to have transportation during these uncertain times. There’s a clear benefit to these individuals having transportation options, and as an ancillary benefit it may also help reduce overcrowding of public transit while social distancing is still required.
 
Sources: Autos consumer sentiment – new & used vehicle searches (U.S.); Automotive trends (AU)

A slow rebound in the Travel sector.

Travel has proven to be the vertical most impacted by COVID-19 and has also been the most dubious in its rebound. While there’s still the obvious economic headwinds, there are initial indications that the travel bug is making its way back into the American psyche. To help put it in perspective, the travel vertical hit rock bottom the week of April 24th with a 29% reduction in YoY traffic volume. Since then, it has improved by 7%, bringing early May’s volume to a less daunting 22% decline from last year. This incrementally may not seem like much but it’s showing how this vertical has hit the metaphorical floor and is bouncing back. The force at which it’s rebounding is still yet to be determined. The click data follow a similar trend line, however, the ‘floor’ in this case was much lower with click volume down over 90% compared to last year. This has since recovered to the mid-80% range for the top global travel markets.
 
This may seem like a bleak outlook, but for search marketers there’s a nice silver lining. The decreased competition for ad placement means lower costs per click (CPCs). Across all major travel sub verticals, CPCs are discounted between 50-70% to what they were in the previous year. So, fortune could favor the bold in situations like this, but just remember to be mindful of your tone and your messaging. In case you’re unsure what that messaging should be, a helpful reminder from our latest COVID-19 eBook is that 7 of 10 consumers approve of COVID-19 messaging right now and 85% of consumers will only consider purchasing from a brand they trust.
 
Sources: Travel marketplace (global); Travel marketplace recovery gauge (global)

Search trend & behavior changes during COVID-19

Automotive

Financial Services

Health & Wellness

Retail & CPG

Tech & Telecom

Travel

Other

 
For these and many other weekly-updated insights, please bookmark our COVID-19 insights and resources for advertisers hub and subscribe to the Microsoft Advertising Insider newsletter to receive blog updates automatically. If you’d prefer to listen instead, follow our Insights with Microsoft podcast series on AppleGoogle and Spotify. Curious about strategies and recommendations? Read our Digital advertiser’s guide to COVID-19.  For insights on Marketing with Purpose, which explores building loyalty and creating business value through an expanded view on trust paved with empathy, inclusivity and knowing your brand’s purpose, bookmark our curated hub.