COVID-19 Tracker—Did Offline Commerce Lose Against Online, and by How Much?—Part 1

 In COVID-19

The Verto Analytics COVID-19 Tracker reveals how, during the COVID-19 pandemic—while most offline categories have lost visitors—the online world has more or less kept its audience. Digital devices and screens, as well as the online availability of services and content, have fulfilled needs for which users might otherwise have looked in the offline world.

Context

Even though China, Italy, and other countries were the earliest exhibitors of COVID-19’s significant risk, the COVID-19 pandemic has been hitting the rest of the world hard since March and April. Naturally, the whole pandemic has reminded us about the risks of physical encounters. After all, the disease only spreads via physical proximity. However, digital devices and services do not pose such risks, so certain apps and digital services have actually benefited significantly (in terms of audience reach, time spent, and market share) from the increased use of online tools during the pandemic, as shown in some of our earlier analyses.

So, has the online world beaten the offline world? If so, by how much? 

In many places since early spring, offline movement and behavior has been shut down—or at least significantly restricted. Can this be seen in the behavioral data?

Verto’s Smart App panel provides data from a massive set of opt-in consumers who have volunteered for market research. We anonymously track these volunteers’ real-world movements and tie all that data to an offline place taxonomy—letting us understand where they visit, when, and for how long. We also deeply measure all online usage across these consumers’ digital devices—smartphones, tablets, desktop PCs, laptops, and more. So our Smart App panel shows us what each of our participants is doing with both online and offline places and services. Even more, we can see what they do with online devices in different physical locations, and so on. This single-source passive measurement methodology provides for an interesting set-up to study how offline compares to online.

Methodology

In this article, we used our Smart App panel’s proprietary and fully passive measurement data for the first half of the year. We focused on online and offline categories, matching them as well as we could, to observe how respective offline-world use cases correspond to the online world. More specifically, we studied the number of unique monthly users in both worlds, and their relative development since January 2020, all the way to the end of June 2020—letting us exclude the fact that, when counting users, some categories might be bigger in online, and some others in offline. Instead, we have compared all the monthly numbers to the monthly users in January, so we can understand whether the category has gained or lost users on a month-by-month basis as the pandemic has evolved.

Automotive

First, let’s start with the automotive category—one of the most significant areas of business and economic activity in the U.S. Naturally, in the physical world, one can visit car dealerships, in testing, observing, and debating about used or new cars. Or, one can visit these places to actually purchase a new car, sell the old one—or do both at the same time. Over the past two decades in the online world, however, we have seen a huge emergence of different apps and services to help users do many of those same tasks: review new and used models, read about test drives, explore reviews, or actually do some deal-making, too.

So, what does our data show for the automotive category? First, it is very clear that offline visits to car dealers (unique users), had already decreased a bit in March—dropping 25% from January. April saw a further drop of 54% from January levels, but then recovered a bit, going up to 62% in June (100% being the level in January 2020). So, the car dealerships have more or less had about 60% of their normal monthly visitors already for three months of the first half of the year—quite a radical loss indeed!

Conversely we see that the number of online users in March for automotive actually went up 5% from January levels (possibly because of the approach of summer or because more people had completed their tax filings). After that, it dropped a bit, but the online auto category in June equaled January levels. 

So the online automotive market, while fluctuating slightly, more or less held its audience. Offline, however, it lost quite a bit.

Banking and Finance

Second, let’s take a look at finance and banking services, one of the key aspects of everyday life. Unsurprisingly—as users still needed to review balances, pay bills, execute trades, etc.—this category’s online monthly audience stayed very stable for the whole six-month observation period, with essentially no change.

Offline, however, people’s visits to commercial bank locations decreased quickly—dropping 13% in February, 25% in March, and 54% in April! Another way of looking at the data is that, in April, only 46% of January’s unique users were still visiting physical bank locations. Thankfully, May and June levels were already up a bit, as some of the COVID-19 concerns had slightly lifted by then. (Naturally, this has not been the case in July and August, but that is beyond the time frame of this report). Also, by Q2, many physical locations in many sectors—including banks—had been able to install extra shelter and equipment and build processes to handle customers in physical locations even though the COVID-19 exposure was significant.

As with the automotive category, we again see a rapid and steady decline for offline banks from January to April, and some mitigation after that—while online banks had a steady monthly audience throughout the period.

Health and Fitness

Third, let’s then turn our attention to the health and fitness category, which has an interesting mix of online and offline aspects. While gyms and the rest of the physical world offer ways for users to participate in sports and maintain or improve their health, there are also abundant online services and mobile apps to help users do all that on their own. People can now go jogging or biking, do yoga, and track activities all on their own—and manage all that through a variety of digital apps and services!

In this category, again, online health apps and services have kept up nicely throughout the pandemic so, clearly, people have wanted to continue their activities. Once again, though, the offline counterpart suffered, with offline health visits (to gyms, for example) dropping significantly—more than 60%. The drop was highest in April, and went up only a bit in May and June. The direction for offline is good, however: In June, while monthly visits were down 50%, the difference from January/February levels is getting smaller all the time!

Shopping

Fourth, let’s take a look at shopping. This is an essential piece of our everyday life because we all need to buy food, clothes, soap, daily essentials, machines, etc. There is an abundance of online shopping services—led by Amazon, Walmart, and Target— but we all naturally have many physical places around us to do shopping, too.

As you might have guessed, offline shopping went down—albeit much more slowly than most of the other categories we have spoken about. Offline shoppers were down 7% in February, 17% in March, and 36% in April, but the number has stayed stable since. While still a significant drop, it is not as dramatic as in other categories. During the same period, monthly online shoppers have stayed on the same level.

Conclusions

Clearly, these data show that online is beating offline in most categories! It is easier to avoid the pandemic when browsing your digital screens, avoiding any physical proximity to other people—and the recommendations from the authorities are naturally endorsing all this.

Stay tuned: We will be back soon with more insights, to build up a complete picture of online vs. offline during the COVID-19 pandemic.

And please do not hesitate to contact us if you are interested in capitalizing on Verto’s Smart App panel passive data to understand consumers’ changing behavior!

Background

Verto Analytics (Verto) operates a passive metering panel that provides researchers, advertisers, and publishers the data they need to keep up with the rapid and changing pace of consumer media consumption on every app, device, service, and platform. The Verto cross-device panel is an ongoing, longitudinal panel that captures a wide breadth of behaviors—all enriched to clients’ behavioral analysis or custom survey studies.

Our single-source, passive metering data sets provide researchers, advertisers, and publishers the information needed to understand the full digital footprint of the U.S. population—helping them understand and investigate competitors and different market opportunities; fill in the gaps for subscription, adoption, and purchase journeys; and identify ways to increase customer engagement and loyalty.  

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