September 6, 2022
Between layoffs, hiring freezes, and rising prices, an economic downturn can put people on edge. Consumers become more cautious about spending their money, leaving busy retailers scrambling to stay top of mind. But recessions aren’t permanent, and there are steps you can take to ensure success even before the economy rebounds. In this post, we offer some insights on how to stay competitive and resilient as an eCommerce business in a challenging economic climate.
One of the first things you can do is critically assess your operational efficiency. This includes having a clear understanding of your overhead costs. For example: Which processes are essential, and which can be streamlined or even eliminated?
Using a feed management tool will help you optimize and automate all of your product feeds without having to invest extra time or resources.
You won’t have to add prices and inventory stock changes manually, for one thing, and you’ll have control over the product information you share online. By creating qualitative feeds, you’ll be able to easily promote your products on thousands of advertising platforms, marketplaces, affiliate networks, and price comparison websites.
When a recession is looming, retailers often respond by slashing their marketing budget. But actually, it’s important to make sure you’re marketing your products strategically – and that means spending differently, not necessarily less.
As Harvard Business Review suggested during the last recession: “Take a scalpel rather than a cleaver to the marketing budget.”
Remember: People don’t stop spending money during a recession – they simply spend less. By allocating most of your marketing resources to your best-selling products, you’ll be able to maintain their strength for your core market.
The key is to make every dollar in your budget go further and work harder. That includes investing in the right analytics tools to help you get a clear picture of who your customers are, what they’re buying, and why a seamless shopping experience matters more than ever.
Using behavioral analytics, for instance, can help you understand exactly how a customer interacts with your business. You’ll learn how they first found you and what parts of your website they like to visit.
You’ll also be able to track the ad campaigns they’ve seen and responded to; the products they buy (and how often); and the total amount of money they’ve spent with you in the past and will likely spend in the future.
According to one recent study, 65 percent of business comes from repeat customers. So rather than casting a wide net to attract new customers, you should target the shoppers who have been consistently returning to your site.
Begin with a review of your product offerings and pricing models. You can identify the items with the highest profit margins and then automate your feeds to advertise and showcase them. Similarly, determine which channels have performed best and then include them in a multichannel advertising strategy.
With the right data insights in place, your sales and advertising tactics can hit your targets with greater precision. As we mentioned previously, behavioral analytics can give you valuable insights about your customers.
Real-time data on product performance will also give you a clear view of your highest- and lowest-performing products so you can automate product segmentation. Data insights can also help you optimize your ad campaign goals based on ROAS or CPS rates.
Have you ever clicked on a Google Shopping ad, only to land on the business’s webpage and discover the product is out of stock? Nothing frustrates an online shopper more than discovering the item they want is no longer on sale – or even worse, no longer available.
An obvious solution is to manage your inventory and keep your product feeds up to date across all channels. By updating your feeds multiple times a day, you can adjust your prices in relation to your competitors, add promotions for select products, and ensure your inventory is always accurate. To increase your online reach, you can also use feed templates to build high-quality data feeds.
Now is the time to prioritize an excellent customer experience (if you haven’t already), especially for your most loyal shoppers. This requires being proactive and creative about customer incentives.
For instance, why not reward shoppers with exclusive membership programs and discounts? You can use automation tools to waive shipping fees to avoid the possibility of cart abandonment. As Amazon has taught the eCommerce industry, it’s essential to pay attention to every little detail related to consumer behavior.
The world’s largest online retailer leverages behavioral analytics to create targeted ads, special savings, and customized recommendations, resulting in more and happier customers who keep coming back. In 2022, there are almost 160 million Amazon Prime users, and that number is only expected to climb.
To deliver highly responsive service, you can prioritize customer favorites and maintain a customer wish-list. If someone wants to buy a popular item that’s currently unavailable, save their contact information and get in touch as soon as it’s back in stock.
As a general practice, don’t rely solely on automated mass emails to stay connected with your customers. Sure, they want to know about upcoming sales and limited-time offers. But they also appreciate a personal touch. Consider surprising them with an eye-catching email to wish them a happy birthday or to thank them for being a valued customer.
Are you a boutique online shop for women’s shoes? Does your business offer the internet’s best selection of household products? Your customers should know what makes your brand stand out.
To strengthen your brand presence, leverage the power of social media. The idea isn’t necessarily to sell something, but to interact with customers, remind them who you are, and give them a glimpse of the values behind your logo. Social platforms are a great way to share fun facts, helpful tips, clever videos, and even lighthearted slice-of-life storytelling.
Not only can reinforcing your brand help you navigate a challenging business landscape, it might help you emerge even stronger. Take Patagonia, for example. The California-based retailer is well known for both its sustainable outdoor clothing line and its ardent environmental activism.
Because corporate social responsibility is an integral part of Patagonia’s brand identity, customers who visit the retailer’s website can read in-depth stories about environmental advocacy.
With a few simple clicks, they can also donate to one of over a thousand causes. Brand consistency has played a role in Patagonia’s success, even during a disruptive pandemic. Named one of Time’s most influential companies for 2022, the company is expected to exceed $1 billion in sales revenue this year.
How customers experience your brand is shaped by the many interactions along the way, from your ads and merchandise display, to the number of clicks on a page, to the checkout process and beyond. So don’t take your brand for granted – it’s one of the most powerful ways you can create an emotional (and enduring) connection with your customers.
When it comes to riding out an economic downturn, you want to leverage your strengths and commit to playing the long game. That way, when the economy does recover, your online business will be well positioned for sustainable growth.
Founded in 2014, Channable mobilizes next-generation technology to connect retailers and advertisers with customers throughout the world.
We offer a unique combination of data feed management and pay-per-click automation tools within a highly intuitive platform. Our tools are user-friendly and empower customers to create the campaigns they need, manage their feeds with ease, and seamlessly integrate their marketplaces.
If you want to learn more, reach out to one of our eCommerce experts.