High energy prices, elevated inflation, rising interest rates and global economic weakness mean the UK economy is expected to be in recession until the middle of 2023. Understandably, many of us, and notably many ecommerce businesses are starting to become apprehensive about what exactly that means for not only their future - but the future of their industry as a whole.
Online sales have seen a huge boom since the 2020 pandemic - and although it was a period of economic uncertainty, many businesses, due to forced closure of physical premises, pivoted into the ecommerce market, seeing a record-breaking surge in online sales.
However, as we know, what goes up must come down, and as such we need to look to future-proofing businesses, no matter what the economic climate! So: how can we adapt our strategy and marketing to provide a stable business plan, and help us to scale and grow?
We’re looking to the future with five essential tactics to adapt and grow your business in a volatile market.
Shopify SEO audit for your online store TODAY ⬇1. Keep on Marketing: Don’t Get Lost In the Crowds
All too often businesses pause marketing campaigns as a way of reducing costs during an economic crisis. But what does this mean for a growing business? Firstly - stopping marketing efforts could result in your business completely dropping off the radar. For many larger businesses, their name and reputation can be enough to keep sales coming. But when it comes to smaller businesses looking to grow, a good proportion of revenue comes from dedicated marketing campaigns which put you ahead of your competition and allow you to stand out from the crowd.
Marketing campaigns allow your business to reach new customers and promote products in new spaces. Scaling up and fine tuning your marketing efforts in times of crisis can actually help to improve sales. Bearing in mind the first thing many businesses do is cut marketing spend, your deliberate efforts to avoid this tactic will mean you’ll have your choice of the market share. Competitors who pull back on marketing will pave the way for your efforts to be seen and allow you to pull ahead of them, making you the ‘go-to’ business for your industry.
2. Internationalisation: Reach New Audiences
Expanding your audience is one of the ways you can adapt your business plans to encourage sales despite a looming recession. Catering for an international audience broadens your scope when it comes to making sales.
Before Shopify launched its internationalisation features, “going global” was reserved for brands with huge budgets and offices around the world. Now, it’s accessible to everyone. If you’re not tapping into the well of new markets, there’s no time like the present. Explore our downloadable internationalisation whitepaper for more information on how to go global with Shopify.
3. Encourage Retention: Use Loyalty Programmes to Promote Regular Custom
As the cost of acquisition rises it is essential to retain existing custom. Existing customers are one of your biggest assets as they are 50% more likely to try new products and spend 31% more. So one of the ways to encourage retention is through loyalty programmes. 79% of customers state that they are more likely to continue doing business with a brand if they have a good loyalty programme. Customers today almost always expect something back from their purchases, whether this is reward points, % off their next purchase, or even a referral code which allows them to recommend a friend giving both parties money off their next purchase.
Customers expect loyalty to be rewarded, but this doesn’t mean that you’re losing out. Though customers expect to be rewarded for loyalty - they are also willing to pay extra for the privilege. We’ve all seen the ‘Spend just £5 more to get free delivery’ message or ‘Spend just £10 more to get 100 loyalty points’ messages when shopping. 66% of shoppers will modify their spend to maximise on benefits. So not only do loyalty programmes encourage repeat purchases, they can also encourage higher value purchases.
4. Subscription Models Allow a More Fluid Shopping Experience
Similarly to loyalty programmes, subscription models can also encourage repeat custom if done correctly. There are so many examples of products which customers will buy over and over again, from skincare products to snacks, period products to grooming, we all use them daily. So it is a no-brainer that these types of goods are offered on a subscription basis. Check out our case studies about subscription brands we worked with, Origin Coffee and Wild Deodorant.)
As we head into more uncertainty not only do subscriptions provide stability for businesses, but they also provide stability for customers. There are some simple tricks which you can put in place to ensure that these subscriptions are both appealing and accessible to all.
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Firstly offer an easy ‘out’ - customers are more likely to sign up to subscriptions if they are able to cancel at any time.
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Second, offer pause options as a substitute to cancelling. Customers' circumstances are constantly changing - whether they’re on holiday for a week, they have too much of your product, or their financial situation has changed - they are more likely to stick with it if they can amend delivery dates or pause their subscription.
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Finally, offer flexible payment options and discounts. Offers such as ‘commit to 6 months and get a 30% discount’ can really help when it comes to getting customers to commit to subscriptions.
Looking for tips on generating a successful subscription business? Take a look at our webinar with Recharge and Relo by Blueprint.
5. Provide Alternative Payment Methods: Utilise Klarna and Let Customers Pay Their Way
In 2021, over 147 million customers used Klarna to complete their online purchases. Using these split payment or buy-now-pay-later avenues opens your products up to a wider audience. This gives people flexibility when it comes to payments and is one of the highest sought after elements on any online store.
These flexible payment options allow customers to indulge in purchases which they otherwise would not have made. In previous recessions we have seen a decline in the purchase of luxury goods, however 59% of online shoppers have stated that due to flexible payment options they have been able to purchase goods that they wouldn’t have previously. And it isn’t just Klarna that’s in on the action.
Many other payment services are now setting up their own variants to allow people to buy now and pay later. These include Apple Pay as well as some banks too. So it is definitely worth adding this into your strategy!
Adapting your strategy to fit a changing market is something which we should all be doing, not just in times of economic decline - but in order to adapt and grow your business in line with an ever-evolving environment. Contact us to learn more about how we can help, and speak with our team.
Looking for more ways in which you can thrive during a recession? Our exclusive ecommerce event featured none other than Steven Bartlett: Dragon, entrepreneur and businessman. Steven was joined by Eastside Co’s own Jason Stokes and Louis Thompson, as well as Shopify’s Shimona Mehta, SellersFunding’s Leonardo Felisberto and EY’s Paul Hunter. The video of the evening is available to watch here in its entirety.