The current cost of living crisis is having a global impact and consumers are feeling the pinch of the highest prices they've seen in a generation, with energy bills soaring, food costs rising, and mortgage interest rates reaching 15-year highs.
As a result, inflation hit a 40-year high of 11.1 per cent last November and is currently having a dramatic effect on people and businesses. Supply chain and labour shortages are also significantly impacting eCommerce stores, contributing to higher manufacturing costs and fewer products in production.
Yet, that doesn't mean it's the end of the road for businesses operating in online sales. According to Melanie Vala, COO, Deko, eCommerce might see a slight slowdown in growth, but there are still opportunities for online stores to meet consumer demand. For many, it's a case of rethinking strategies and refocusing to align with a changing consumer mindset.
Businesses across all industries see less appetite for their products and services during an economic downturn. For that reason, companies need to pay extra attention to the details and craft a service that customers highly value. Online stores can do this in several ways, including:
Re-examining your conversion funnel
Moving your customers along their purchase journey through a conversion funnel allows them to make small actions that lead to a purchase. Think of it as a diagram paving the way for your buyers to make a purchase.
Maximising special occasions
Even during times of recession, companies can still maximise special occasions. Now, more than ever is the time to double down on promotions and advertising around special days in the calendar.
Focusing on customer service
By establishing yourself as a brand known for its customer-centred approach, you can build loyalty with customers. When it does come to spend, they'll be more inclined to shop with your store thanks to its heightened level of customer service.
Increasing retention rate
You want consumers to keep coming back and buying your products or services. Increasing the percentage of new users who return to your store can compensate for the lack of first-time and one-off customers.
Reviewing your value proposition
While the internet provides the perfect platform to obtain new customers, it's also the ideal distraction and can be hard to keep people's attention. Know your target audience and refine your message, so it resonates with them and positions your online store as the best place to get what they need.
Creating a sense of urgency
Create a feeling of exclusivity around your products and services, whether by offering exclusive access, creating the fear of missing out, or building strong word of mouth by constricting supply to stress a sense of urgency.
Involving your customers (UGC)
Allow them to be brand ambassadors by encouraging your shoppers to submit content you can use in marketing materials. Ask them to post images on social media using your products with the relevant hashtag or run competitions that require them to use content with themselves and your products.
Making the checkout experience seamless
Cart abandonment is a genuine concern for online stores, with about 70 per cent of shoppers dropping off at the checkout stage in the UK. Does your checkout offer a fluid experience for shoppers? Can they easily enter their information, and do you remove friction from the methods used for paying?
Offering alternative payment methods
Giving people the option to use different payment methods is arguably the best way to combat a complex financial landscape. An increasing number of customers prefer to pay with alternative payment methods, such as buy now, pay later (BNPL).
The role of retail finance
Providing finance to your customers gives them a choice, something that takes on even more important during an economic downturn. Retail finance gives them more financial freedom and helps them feel more confident about making a purchase. Other products such as digital credit accounts have a similar effect.
The economic landscape is heading into an uncertain space, with consumers feeling the pinch and evaluating their spending. This poses an issue for eCommerce businesses, which are yet to face long-term consumer decline.
To ensure you stay relevant and in the mind of shoppers, you'll need to diversify your approach and focus on the core elements that really matter to customers. From offering an excellent service to providing retail finance and the payment options they desire; your business can remain relevant and flourish in these difficult times to see vital business growth.