7 Ways for Ecommerce Businesses to Survive and Thrive During the Downturn
Image source: TechCrunch
There is no denying that we are now facing a COVID recession. In fact, this corona-virus induced downturn has caused some parts of the economy to stop. A lot of us are facing a quite uncertain reality.
But let's get to the brighter side first. Sooner or later, everything will have a rapid rebound once a vaccine or other solutions can be found.
Second, this will provide businesses a window of opportunity to reflect and think of ways to adapt and thrive in these trying times.
In this post, we will outline the seven ways how your e-commerce business can survive amid crisis:
1. Find One Small Thing You Can Do Excellently, Daily
During the depths of the great depression, when Conrad Hilton was losing his hotels and his marriage due to a crushing mountain of debt, he found small ways to stay positive and affirm to himself, his customers and his investors that he would survive.
Even though he had no money for food or fare, and had to borrow a dollar here and a dollar there to get from one city to the next, trying to save his hotels, he always did the following three things:
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As a man of faith, he started each day on his knees in prayer
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He always made sure the few guests who still came, had clean linen and towels. They served half pats of butter and cut down on all the other luxuries but on this one thing he would not waver. It represented the excellence Hilton Hotels was known for.
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He looked at the clipped picture of the Waldorf Astoria hotel—the greatest of them all--in his wallet, resolving to buy it some day and turn it into a Hilton hotel.
Conrad Hilton: Image source: Wikipedia
Doing these things was a way of flying his flag each day, in the face of adversity. He eventually regained control of his hotels and bought the Waldorf Astoria. By the 1970’s he was a billionaire. All this is recounted in the book Be My Guest , Hilton’s autobiography.
You and I are not Conrad Hilton so pick just one thing; NOT three! A 20 year study of excellent performers across sports, business, entertainment and many other industries shows that they pick only one thing at a time, to change or improve.
At Capital & Growth we continue to invest in our content and publish a new original article every Monday and Thursday, without fail. To ensure this happens, Jasper (the founder and editor) writes for 30 minutes each day, come hell or high water! Our Alexa rankings are rising steadily and readership continues to grow, as a result.
What is your one thing? Please comment below.
The last thing that you want to do is to hunker down and wait until the whole thing is over.
Also, always keep your eyes open for opportunities should they arise. Think of it this way. Recessions like these are a great time to capture the market share especially when most businesses are distracted.
The key to successfully pursuing these opportunities is knowing your business strategy from the inside out. That will help you in making the right decisions as you move forward.
A more recent example is Lego. The recession in 2008 placed a lot of pressure on toy companies ‒ except for Lego. A lot of their competitors were hibernating, but they used it as an opportunity to expand to other markets like Asia while strengthening their sales in Europe.
After the recession was over, Lego came out to the top, boosting their profits by up to 63 percent.
2. Outsource marketing to stay lean
Marketing is one of the first things that you need to tap into when recession strikes. Also, remember that great marketing doesn't just address the demand. It creates it, even when a lot of people are less likely to spend.
Meaning, you shouldn't cut your marketing budget at the event of a downturn.
To stay in shape, you can outsource your marketing, as well as other things like software development and inventory management. That will help you focus on retaining your margin.
3. Observe your funding
Although we're thinking about funding, you need to stop and think where your cash is coming from.
With a fear of a global recession increasing as the weeks and months progress, venture capitalists and investors are more cautious about where and how they invest.
This can cut your expansions plans short, especially if you haven't secured investment before this pandemic started. Careful planning and looking for alternative sources of funding, as well as a back-up plan on what to do when funding dries up, is essential.
4. Maximize Customer Retention
You can't afford to lose your customers and market share at the same time. But the thing is, only a few businesses have well-defined customer retention strategies, with the focus often on customer recruitment.
However, it's more expensive to recruit a new customer than to retain an already existing one.
You can reward customer loyalty in the form of loyalty programs and incentives, for example. Similarly, you need to have a customer service team that's empowered to help solve people's problems.
5. Keep Your Customers Happy
Keeping your customers happy and satisfied is vital. Not to mention that is easier than gaining the trust of new ones.
Positive word of mouth is always helpful, so give your customers a chance to talk to others, whether it's your impeccable service, a quick turnaround time, or asking them to be a case study on your website.
6. Identify Your Most Valued Products
Identify your most valued products. Usually, these are your highest value customers are buying regularly.
Once you know what those products are, sort them by the highest margin and focus on optimizing your website experience around these products.
Utilize data-driven optimization to make sure these high-margin product pages have the highest conversion rates. Over time, this will lead to more profits and a stronger bottom line.
7. Continue to Invest in Technology
With everything happening in the world today, you might be forced to tighten up your budget to survive. Yet, one of the best ways to prepare is investing in technology and service offerings that are right for you.
This will give you a better chance of coming out ahead from your competitors as soon as everything goes back to normal.
This might involve supporting a warehouse team that has better systems. Apart from making an e-commerce site, you can also utilize business analytics to help you get a better picture of what's driving your business.
When a downturn happens, your best bet is to provide your customers with the best service possible.
Do not let this recent economic downturn stop your business. Companies that are more prepared and pro-active despite this crisis will find themselves in a much better position afterwards and will find themselves rising to the top, once the economy starts to pick up again.
About the author: Jake Rheude is the Director of Marketing at Red Stag Fulfillment, an ecommerce fulfillment warehouse that was born out of ecommerce. He has years of experience in ecommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others. Jasper Kuria contributed the Conrad Hilton story.
