Earlier this week, Amazon announced plans to lay off nearly 10,000 employees, making it one of the largest job cuts in the company’s history. With the holiday season just around the corner, it’s supposed to be a period of high demand and sales. But mounting losses and slow growth have forced the eCommerce giant to trim its workforce.
The latest development adds Amazon to the league of established tech companies, including Meta and Twitter, that had to let go of employees to cut costs.
With rising inflation rates and consecutive interest rate hikes by the Federal Reserve, there have been speculations of an impending global recession. Many experts also believe that the US economy is already in recession.
That, in turn, will skyrocket commodity prices and take a toll on consumer spending. People will focus on essential purchases while cutting back on non-essential and luxury items. Worldwide supply chain shortages will make it even more challenging for eCommerce companies to weather the storm.
How do you ensure that your business stays afloat during such a period of low economic activity?
5 Smart Strategies to Recession-Proof Your eCommerce Business
The good news is that recession-proofing your eCommerce business isn’t rocket science. Here are a few strategies to help you get started:
Minimize Overhead With Automation
Running an eCommerce business gives you plenty of opportunities to embrace lean operations. However, you can take things up a notch with the help of automation tools. From marketing, sales, and customer service to inventory management – you can automate various routine tasks to reduce spending on the workforce.
For instance, you can use a feed management tool like Channable to create and publish product feeds on multiple platforms, including your website and social media profiles. In addition, the tool will automatically update the feed across all platforms whenever the product details or stock information changes.
Similarly, you can use an email automation platform like Mailchimp or Constant Contact to trigger relevant emails based on user actions automatically. These tools come in handy at every stage of the sales funnel, from welcoming new customers to sending cart abandonment reminders.
Another clever use of automation includes implementing chatbots on your website to answer common customer queries. That, in turn, gives your customer service team more time to focus on improving the purchase experience.
Focus on Customer Retention
Retaining existing customers requires less effort and money than attracting new ones. That makes it a clever strategy to adopt during declining consumer spending.
Start using a customer relationship management (CRM) platform, like Zoho or Agile CRM, to identify your most active customers. Next, look at the products they usually purchase to design personalized rewards. Besides offering a discount on their next purchase, you can provide free samples of similar products.
You can even introduce a loyalty program to let them collect redeemable points after every purchase. Make sure you personalize every email, text message, push notification, etc., you send with their name and other details.
Also, build a proactive customer support team that can quickly resolve and address customer issues. Finally, follow up with first-time customers and ask for their feedback.
Optimize Cash Flow
Despite your best efforts, your company’s sales and revenue will take a hit during a recession. That, in turn, can result in limited cash flow, making it difficult to pay salaries or invest in marketing campaigns.
You can overcome cash flow challenges with a growth planning platform like 8fig. For example, using 8fig, you can input past sales, cost, and revenue data to predict your cash flow needs during an upcoming recession.
It can even integrate with eCommerce platforms, like Shopify and BigCommerce, and retrieve relevant sales data from there. That, in turn, will help you implement suitable preventive measures to cut costs and maximize efficiency. In addition, it’ll help you utilize available funds better so that you have enough to sail through the recession.
Additionally, you can decide when to reach out to investors for more funding. 8fig also offers dynamic funding solutions that adapt to your company’s changing needs. Access to such flexible cash injections can come in handy when you’ve exhausted your reserves.
Ensure Frictionless Checkout and Returns
Consumers will try to curb spending during a recession. In such times, the last thing you want to do is lose potential customers to a complex checkout process. Instead, offer a hassle-free purchase experience by allowing guest checkout for new customers. Also, use pre-filled forms for repeat customers to speed up the process.
Outline clear shipping policies and payment teams on the product page. Ensure customers don’t come across shipping fees or taxes for the first time during checkout. Also, it’s a good idea to give customers the option to pay in installments.
You can encourage new purchases further by providing free returns. Work with a reliable last-mile delivery provider that’ll help you pick up return shipments from customers.
Don’t Stop Marketing
Here’s the thing – just because consumers aren’t looking to make new purchases, it doesn’t mean you should stop promoting your brand. Instead, it’s the right time for you to build a rapport with potential and existing customers and drive brand awareness.
Instead of promoting your products outright, focus on creating valuable content that addresses your target audience’s pain points. Then, use social media platforms, emails, text messages, and your company website to distribute your content.
Identify and use your audience’s preferred communication channels to maximize engagement. You can use tools like Hootsuite to schedule and upload posts on various social media platforms automatically.
Also, remember that many of your competitors might be dealing with a cash crunch and cutting back on marketing. That makes it a good time to refresh your search engine optimization (SEO) strategy with new keywords.
In Conclusion
A recession doesn’t have to be a death sentence for your eCommerce business. Optimizing cash flow and automating routine tasks will help you make the most of available resources. Also, focus on retaining customers with personalized offers and loyalty programs. Lastly, use SEO, social media marketing, and other techniques to stay connected with your customers.
