How to make your online store recession-proof

According to the Economist, a recession in 2023 is “inevitable.” The editors indicate that the world is amid an ongoing "permacrisis". In practice, this means a crisis that lasts a long time and has many causes.

Recession in Poland

In the case of Poland, the forecasts are not optimistic. According to OECD information, GDP in Poland is expected to increase by 0.9% in 2023, and inflation is expected to reach 10.8%. A rebound is not expected until 2024 when growth is expected to accelerate to 2.4% and inflation to fall to 6.6%.

Macroeconomic indicators affect the everyday functioning of companies as well as consumers. Apart from inflation, which is felt by absolutely everyone due to the increase in energy and food prices, falling GDP means less willingness to invest and develop businesses.

According to research conducted by Atena Research & Consulting, 51% consumers see the impact of current socio-economic events, such as inflation, tax changes, or the war in Ukraine, on their everyday lives. What's more - 55% try to think more about prices and profitability when shopping and 40% try to save.

For shop owners, this is both a challenge and an opportunity. This is a challenge as users are less willing to spend money. A chance, because smart shopping takes place primarily on the Internet, which means the outflow of customers from brick-and-mortar stores to online ones.

How to survive a recession in e-commerce

To take full advantage of this opportunity and avoid threats, online stores should focus on avoiding threats and using proven techniques.

Cut costs

Many companies operate based on duration, without precise information about where the highest revenues come from and which elements generate the highest costs. Performing a decent inventory and audit allows you to check the real cash flow in the company and look for savings.

To do this, it is necessary not only to map expenses but also to prioritize them. Resigning from some activities or limiting them can bring a lot of benefits, but if done carelessly, it can threaten the stability of the business.

Invest in marketing

Marketing seems to be a cost that is easy to reduce - these are mostly actions that do not bring immediate effect. However, giving up advertising activities only deepens the crisis, as the interest of customers in the store's products is weakening.

In the case of online stores, it is crucial to develop those tools that reassure the user about the rightness of the purchase and its profitability - including customer reviews, examples of product use, and its service.

To make sound decisions in matters related to marketing and promotion, it is necessary to use the right metrics and conduct experiments. Times of crisis and recession is probably the best time to catalog and organize your knowledge of what works and what doesn't when it comes to marketing and redirecting budgets to get the maximum benefit.

Stay in touch with users

Marketing can be targeted at both new and existing users of the brand. The latter group can be a much better source of income because they have already bought from the company once and do not have to overcome the barrier related to trust.

Such a customer can benefit in two ways:

• Buys again - This is the most obvious situation where the user simply makes another purchase. Depending on the company's offer, this may be easier (fast-moving goods, clothes) or less likely (decorative elements, luxury goods). Depending on the niche in which the company operates, many different models and strategies are possible to reach the already acquired customers.
• Recommends to friends - in this case, customer satisfaction and their tendency to attract new buyers are crucial.

In both of these cases, a loyalty program can be a key tool, which will maintain the right temperature of relations with the company's customers through various benefits and incentives.

Automate

Thanks to various automation tools, it is possible to save hundreds or even thousands of zlotys a month. It is now possible to automate many different services - from marketing to customer service to returns.

Feedink is one of the tools that allow you to introduce automation in the daily operations of the company. A product feed is a tool in itself that allows you to automate advertisements broadcast in many different channels. Feedink, on the other hand, is used for automatic feed management, which saves even more time and money in promotional activities.

Measure, study, and optimize

The last, but probably the most important element of looking for savings is collecting and analyzing data. Modern e-commerce, mailing, or CRM systems allow you to collect and process huge amounts of information.

On their basis, the company can look for new opportunities and test the efficiency of all processes. In practice, every business process can be measured - the challenge is to choose the right metrics for the task and the intended goal.

Summary

Online stores are not immune to crises, but unlike stationery stores, they can reach for dozens of tools that will allow them to go through this difficult circumstances. If you want to find out how you can make your store immune to the upcoming recession and what more you can do, contact us!