Across the world, countries are facing recession and their own set of economic hardships. Due to the long-term implications of a global pandemic and an ongoing war, inflation in the UK reached its highest figure in 41 years in October 2022.
As people look to cut back on their expenses and tighten their purse strings, many industries find themselves questioning how to navigate through increasingly difficult circumstances. While some sectors remain relatively unscathed by the times, brands within the eCommerce sector may be wondering how best to thrive in a hostile environment.
In this blog, we take a look at how eCommerce brands can ride the wave and survive the recession.
Some brands are hit harder than others
During times of economic difficulty, the first thing to go is ‘nice to haves’. While businesses who supply basic necessities such as food staples, fuel, or electricity tend to feel little impact from a recession, most businesses aren’t so lucky.
Retail is one of those industries. However, not all retail brands will be impacted equally. Typically, in a recession, budget stores tend to see their revenue stay the same, if not increase, and high-end luxury brands have also reported increased sales. Those who fall somewhere in the middle tend to fair worst.
What can retailers do to help your brand succeed?
While thriving in a recession sounds like an oxymoron and is no mean feat, it is possible to keep your business going. The answer? Focus on improving what you already have and strengthening your proposition within your market.
Focus on customer lifetime value
Customer acquisition is expensive and time-consuming. While many brands make the mistake of only focusing on attracting customers, value lies in keeping the ones you already have. In times of financial concern, it’s imperative to ensure that you are keeping those who already buy into your brand happy. Existing customers, on average, spend 67 percent more than new customers, so if you’re not investing in current customers, you’re throwing money down the drain.
The first step? Working out your CLV with a simple calculation:
Average value of purchase x Number of purchases in a year x Average length of customer relationship
The goal? Increase this metric through marketing strategies that create a relationship with your audience and boost their loyalty to your brand.
Use email marketing to build relationships
So, what can you do to increase your CLV? A simple but extremely effective tool that you’ll already have as part of your business plan is good old email marketing. Email marketing has long been used by marketers but are you using it to its full potential?
It’s clearer than ever that personalisation is a game changer for increasing customer loyalty. Your customers want to receive personalised and relevant email messaging, not be spammed with the same email going out to all your subscribers.
Take a look at your existing bank of data: who buys what, how frequently they buy it, and what they abandoned before checkout. Use this information to create tailored emails offering similar products and discount codes. Similarly, do you have customers that only shop with you for certain events like Christmas? Create useful emails surrounding other events and entice them with a 10 percent off voucher to try and turn an ‘every so often’ customer into a frequent shopper who can’t get enough.
Reward your audience with loyalty programmes
Saying thank you is never a bad idea. If you want your customers to come back time and time again, offer them rewards such as points or money off to show your appreciation for their business.
Creating a meaningful relationship with your customer base only serves to increase their loyalty to your brand. Implementing systems such as loyalty programmes helps to boost customer satisfaction and improve the likelihood they’ll shop with you again. The results speak for themselves, with 69 percent of people stating that these programmes are the top method of upping their loyalty to a brand.
Whether you choose to offer money back, exclusive discounts or early access to new products, implementing a reward scheme is a no-brainer when it comes to boosting customer loyalty.
Invest in your site
It may seem counterintuitive to invest in your website during times of economic difficulty, but your site is your storefront and your biggest asset. Failing to put enough resources and money into your site is the quickest way to put customers off your brand and lose money, fast.
While it may not be feasible for you to replatform or make huge changes to your site, there are a number of ways to improve user experience to help boost sales.
Improve the user journey with UX
A clunky site that’s not intuitive to use will turn customers off before they’ve even had time to investigate your products. Make sure your site is easy to navigate and follows a logical journey for your users.
A simple, and free, way to investigate your site is to visit it as a customer. Identify a product you’d like to find and go through the entire shopping experience from the homepage to checkout. Next, compare this to a competitor. What did your site do better and where do you fall short? From this, look at what changes you can feasibly make to your site and implement them as a priority.
While some changes may be easy to do, if your site is miles behind the competition and is a roadblock to increasing sales you may need to consider professional support. Our UX team excels in creating sites that pack a punch and help to boost sales.
Keep your site up to date
Keeping up to date with industry best practices is a no-brainer when trying to keep your customers happy. Your site needs to be fast and efficient and one way to see your sales plummet is through slow page speed. In fact, research has found that with every second it takes to load, your conversion rates decrease. You can optimise your page load time through a few simple steps, such as reducing image size, cutting videos down and getting rid of any unnecessary code.
Some hosting platforms can also be slower than others, so it’s worthwhile investigating whether this is a hosting issue or simply due to your site being overloaded with unnecessarily large files. Although some changes such as image compression can be done internally, if your hosting platform is the problem; it may be time to replatform.
Lean on the experts to help your brand succeed
Understanding where best to place your time and resources during a recession can be a challenge. What things should you prioritise over others?
With over 10 years of experience in the eCommerce game, we know what it takes to help businesses excel. We can work with you to identify which areas of your strategy you should prioritise to support your growth during times of financial uncertainty and show you the best ways to implement these.
Don’t bury your head in the sand, be proactive and get ahead. Get in touch today.