On March 23, 2020, UK Prime Minister Boris Johnson announced a country-wide lockdown, instructing all non-essential businesses to close. Overnight, pubs, restaurants, retailers, and gyms closed their doors, not knowing when — or even if — they would reopen.
Faced with restrictions not seen since the Second World War, the economy went haywire. Economic output plummeted, consumer confidence vanished, and centuries-old businesses teetered on the brink of collapse. Even online businesses, sheltered from most of the restrictions, suffered. Businesses hit pause on projects, pulled advertising campaigns, and retreated into their shells.
But things didn’t stay that way for long. Parts of the economy, particularly online segments, rebounded quickly. Often, they bounced back higher and stronger than before.
Recharge caught up with Underwaterpistol, a London-based Shopify agency that weathered the worst of the pandemic. We discussed what it felt like to go through a once-in-a-lifetime crisis, how they worked their way out of trouble, and what the future holds for ecommerce and the wider economy.
What did you think 2020 was going to look like? What were you hoping to achieve this year?
Gary Carruthers (Founder): We were planning to consolidate and continue building on a couple of years of steady growth. We were building out the team and our offering in quite a conservative, strategic fashion. Then it all went sideways. It’s been a mad journey ever since — quite a scary one at times.
Sophie Seaton (Head of Commercial Development): It’s difficult to think that far back now. So much has happened in such a short amount of time. At the start of the year, we would’ve expected our growth to be slow and steady. There was a massive focus for us on what our offering is, what our value proposition is, and refining both of those things to separate ourselves from other agencies.
When did you first realize that COVID-19 was becoming a global issue? How did the pandemic first affect your business?
Sophie: We had really open discussions about what was going on. I think that’s one of our strong points as a company. It wasn’t a case of leadership having a view on what was about to happen and keeping it to themselves. It was always an open discussion on, among other things, how the team felt about going into the office.
It’s difficult to pinpoint when we realized that it was serious. There was a scary period that lasted a few weeks to a month where our brands were terrified and pulled back drastically on budget.
Gary: In the first two key weeks of the crisis, we lost about 40% of our retainer business. It was absolutely terrifying. We collectively huddled together and said, “We need to get our heads down and work through this.” Because I’m in advanced years, I’ve been through a couple of economic crises over the years. The accepted wisdom has always been to market yourself out of trouble. Sure, batten down the hatches but don’t go into yourself. We collectively decided to do that.
Some of our clients didn’t decide to do that. They thought they were on a sticky wicket and they brought in the administrators. That was quite shocking to see. The circumstances that led them to make those decisions reversed very quickly. If they’d stuck to their guns, they could’ve come out of it fairly painlessly in a short period of time.
We were very lucky. After a few weeks, we were already coming out the other side. It was quite amazing to see. We were talking to other agencies who were experiencing very similar things. There were casualties amongst our contemporaries, but for the most part, I think people that we rub shoulders with have done pretty well.
Sophie: Businesses that have been proactive, dynamic, and bold seem to be the ones that have thrived.
What did you hear from your clients pulling back? What was their rationale?
Gary: There are pragmatic decisions and there are decisions made by mindset. The mindset-driven decisions were the really poor ones. I’m not speaking about our clients or people we work with, but some businesses just saw this as an opportunity to go into themselves. That’s a mindset that the business leaders just had. They used the pandemic as an excuse to, as they saw it, get rid of deadwood, furlough unproductive members of staff, and just lay people off. For me, those aren’t pragmatic decisions. That’s a crisis of confidence. Going into yourself is never a good way to make decisions, especially when the going gets tough.
Sophie: There’s a saying that comes to mind: fortune favors the bold, especially in tough times. The bold are the brands that made the difficult decision to weather the storm and stick to their marketing spend, rather than pulling back.
Paid media is a key example. It’s so easy to pull your ad spend. With channels like paid advertising where it was easy to pull back, it meant that the brands that didn’t pull back were much more successful. For four to six weeks, it was a much less competitive space. There were some really attractive auctions and cost-per-clicks because lots of brands have just turned that channel off.
SEO is another example. One of the biggest things that we said to brands was, “If you pull back on everything that you’ve been doing from an SEO perspective, you will have to start from scratch almost. It’s not a switch-it-back-on type channel.”
Was there a turning point for ecommerce during the early stages of the pandemic? When did you realize things were starting to get better?
Sophie: For me it was new business. In particular, the fact that it didn’t dry up. Because of the dip in existing work, we expected to see the same pattern in new business — but it never happened. We were still getting inquiries and there were brands still speaking to us about new builds and new business models.
Gary: We had a couple of inquiries from people who saw opportunities in the state of flux. That was interesting, even if some of the ideas didn’t bear fruit.
We were increasingly hearing brands say, “Well, this is a temporary situation. The lead time for these projects is several months. Chances are if things play out like the news says it’s going to play out, we’ll be launching around about when people are coming out of this anyway.” A lot of people were very pragmatic about it and that was really good for our confidence. It’s not like you switch everything off and then pop up in a few months’ time whenever there’s a vaccine. It wasn’t going to be like that.
These people, these brands that we’re working with, they’re smart people and they did the sums and thought, “Well, we’ve got budget to spend, we’ve got all the strategic stuff in place. We need to crack on and hope that things do come out the other side.”
Were there any trends or patterns in the type of new inquiries you received?
Sophie: Yeah, definitely. There were a couple of things. Fashion brands accelerated plans to bring out loungewear ranges. One of our brands, in particular, just happened to have one in the pipeline and it landed at the perfect time. So fashion brands launching loungewear was a big one.
There was definitely a move towards innovation in food and drink, which ties in really nicely with subscription. There were a couple of new ideas that popped up around supermarket queues, for example. Local producers and suppliers began offering home delivery. That was another trend we saw.
And anything that tied into capitalizing on people being at home more saw a boost. There was a boost in more brands thinking about how they can utilize subscription, because it’s just becoming more normal.
Looking back, what are some of the toughest challenges you’ve faced as an agency?
Sophie: The biggest one that comes to mind is remote working. While remote working has been a part of our agency, we did have a London office in Soho. I’d say half of the team went in around three days per week so there was definitely an impact of not having that base anymore and losing that contact.
We’ve had some… let’s say, brotherly and sisterly fallings out. That’s just down to the nature of speaking more on Slack, rather than seeing each other face-to-face. We have got a really nice team vibe, so we did eventually pick up the phone and have a chat, rather than relying solely on Slack. I think that’s something that has become a normal thing to do: just Slack, without speaking to people at all.
Getting used to fully remote working without any human contact has probably been more draining on some people than others. Hiring and onboarding people without meeting them is definitely difficult.
Gary: I’ve been working from home for the best part of 25 years, but the fact that I don’t see the team every couple of weeks has been a bit of a culture shock for a variety of reasons.
On a personal level, I think there have been plenty of struggles with lockdown and all the existential stuff that comes along with something like COVID. It can be really difficult. I think we need to be generous with each other when things are going badly. There’s always more to a bad day or a falling out. We need to give each other plenty of slack in that regard.
Interactions with our clients have completely changed, too. We did a lot of business remotely because we worked with people all over the world, but sometimes we had to go for lunch or run an in-person workshop. All that stuff is on hold. Now, you have to be creative with how you keep things engaging whenever you’re interacting with clients.
We were very nervous about doing workshops just via Hangouts because that was a bit of a strange thing to do, but now it’s second nature. If anything, our ecommerce strategist says she prefers the ground she can cover in a Hangouts call.
I think we’re going to come out the other side so much more knowledgeable about how remote looks and feels.
What were your biggest learning points in 2020
Gary: My biggest takeaway in the last few months is how our whole hiring strategy has changed. We’ve learnt so much in the last six months and there is actually a strategy now, whereas before it was very ad hoc.
But now it’s very proactive and very strategic. We work very closely with our recruiting partner to put some meaning to our approach — and it’s paying dividends. It’s making us think a lot more carefully about the sort of blend of skills and the blend of characters.
Jennifer Caust (Head Of Marketing): From a digital marketing perspective, brands now have to innovate to stand out digitally because suddenly everyone’s doing online marketing. Before, you had a lot less competition. Now, everyone’s suddenly like, “Okay, I need ads. Okay, I need content. I need emails. I need social.”
For the brands that had already implemented things, like personalization, they’re now a step ahead, they’re comfortable. But there are still a lot of brands playing catch-up. My key takeaway this year would be being quick and agile.
Sophie: Expect the unexpected. That’s my golden nugget of learning from the year.
Will Lynch (Content & Partnership Manager): I agree with the webinar fatigue syndrome that everyone seems to be having. We’ve worked closely as a team to make different types of content that are hopefully more engaging than what everyone else is doing. For example, a couple of quick-fire, four-minutes videos. I suppose the learning point is: don’t be too long in the marketing that you put out. Keep it short.
What challenges do you think ecommerce faces in 2021?
Gary: It’s boring, but for me it’s about hiring wisely. I’m enjoying working with the team we’re putting together and feel we’re building something that’s got legs. For me that’s what I want to increasingly get involved in.
Sophie: I think the biggest challenge will be digital transformation. In the past six months, we’ve experienced years’ worth of growth in the ecommerce space and I don’t think that that’s going to slow down. Even when we have the option to go back to the high street, I think brands are going to realize the opportunities in ecommerce and the speed of that widespread transformation will continue.
For us, as an agency, that poses a challenge in making sure that the team is constantly upskilling, because there’ll be new technology, new trends, new ways to implement things, new business models. It’s about making sure that we’re at the forefront of what’s innovative in the Shopify world and the subscription world.
Will: From an ecommerce perspective, accessibility is probably going to be a big challenge. Ecommerce was very much limited to a certain age demographic — but this year my dad started shopping online for the first time. He struggles with some of the user experience. Going into 2021, with more older generations shopping online, the challenge will be ensuring sites and apps are accessible for all. But there’s a big opportunity there as well.
Beyond 2021, what do you think ecommerce and the wider economy will look like?
Gary: All bets are off.
Jennifer: It depends on what industry you’re in. If you’re in food and drinks, I think it’ll be all about innovation. How can you make something fun? Take subscriptions. How can you make a fun subscription experience, like wine and cheese Friday night boxes.
In the fashion vertical, I think sustainability will be an increasingly important topic. Just look at what H&M is doing. They’ve got a garment collecting campaign. I’ve seen luxury ecommerce brands do things like repairs for life where you can return your product and get unlimited repairs.
Sophie: Yeah, I think sustainability’s a big one. We’ve got a couple of brands in the luxury space. I can think of three off the top of my head. Two out of those three are looking at subscriptions.
One is a kind of rental service, which completely plays into the sustainability piece, and the other is something a little bit more mainstream. Brands being innovative about subscription models will be a big thing.