The ongoing financial crisis has affected businesses across industries, and eCommerce businesses are no exception. The current economic uncertainty has resulted in a decrease in consumer spending, leading to a slowdown in sales for many eCommerce businesses. Additionally, the rise in unemployment rates has also contributed to the decrease in consumer spending.
However, it is worth noting that eCommerce has become an increasingly popular way for consumers to shop, especially during the pandemic. With brick-and-mortar stores closed or operating at reduced capacity, more people are turning to online shopping as a convenient and safe alternative. This shift towards online shopping may help eCommerce businesses weather the financial storm.
How to make your eCommerce business thrive in this financial crisis
Invest in your cash cows
Investing in “cash cows” refers to investing in businesses or assets that generate a steady and reliable stream of cash flow. Cash cows are often mature and established businesses or products with a strong market share and little competition. They provide a stable and predictable source of income, which can be used to fund other investments or projects.
Investing in cash cows can be a smart strategy, as they provide a source of stability and security in uncertain economic times. Additionally, the steady cash flow generated by cash cows can provide a cushion against potential losses from other investments.
Cut down your costs by improving operational efficiency
If there’s one thing that everyone needs more of during these tough times, it is patience! When budgets are tight and money isn’t flowing as freely as it once did, it can be tempting to shoot in the dark and try every trick in the book. But the most effective techniques are sometimes right under your nose.
Step back and look at your operations. Identify areas that can be improved and areas that could be optimized. For example, if you have employees who don’t do anything but answer phones and handle customer service calls, they could be doing something else that would give you more value for their time — like managing customer service on your social media accounts (which is often neglected in eCommerce businesses). The only way to survive a recession is to make sure that you have all hands on deck.
Leverage the power of outsourcing
Outsourcing is the practice of hiring an external company or individual to perform tasks or services that are typically done in-house. It can be a powerful strategy for businesses looking to streamline operations, increase efficiency, and reduce costs.
Leveraging the power of outsourcing can be a valuable strategy for businesses looking to streamline operations, increase efficiency, and reduce costs. By tapping into the expertise of specialized companies and individuals, businesses can focus on core competencies and improve overall efficiency.
Reduce excess inventory
Financial crises mean there is always a chance that something will go wrong and you might lose money on your existing inventory or have to let it go at a loss because you don’t have the space to store or sell it.
Too much inventory is not only harder to manage but also very expensive to house. Therefore, it is advised that you try reducing your inventory by offering discounts or pushing products in combo deals as soon as you can.
Focus less on customer acquisition and more on the existing customers
Focusing on existing customers, rather than solely on acquiring new ones, is a valuable strategy for businesses looking to build a strong and loyal customer base. Existing customers are not only easier to retain but also more likely to make repeat purchases, provide positive word-of-mouth referrals, and offer valuable insights for improving products and services.
Invest in SEO more than paid marketing
Investing in Search Engine Optimization (SEO) and paid marketing both have their benefits for businesses, but which one a business should invest in more depends on its goals and resources.
SEO is the practice of optimizing a website to improve its ranking in search engine results pages (SERPs). It involves a range of tactics, including keyword research, on-page optimization, link building, and content creation, all aimed at making a website more visible and appealing to search engines. SEO provides a long-term, sustainable benefit as it increases a website’s visibility and can lead to increased organic traffic and leads over time.
On the other hand, paid marketing, such as pay-per-click (PPC) advertising, involves paying to have your website displayed in front of a target audience through ads. Paid marketing can be an effective way to drive traffic and leads quickly, but it can also be expensive, and the benefits can stop once the advertising budget is exhausted.
So, which one to invest in more? If a business has limited resources and wants to see immediate results, paid marketing may be a good option. However, if a business wants to build a strong, long-term online presence, investing in SEO may be a better choice. In many cases, businesses choose to invest in both, as combining the two can help maximize their results and reach.
Keep your social media pages active
Keeping your social media pages active is crucial for businesses that want to maintain an online presence and reach their target audience. Social media provides a platform for businesses to engage with their customers, share information about their products and services, and build brand awareness.
It is important to note that maintaining an active social media presence can be time-consuming and requires a consistent effort. Businesses should consider creating a content calendar, scheduling posts in advance, and dedicating resources to managing their social media accounts.
In conclusion, while the financial crisis has had an impact on eCommerce businesses, there are still opportunities for growth and success in this sector. By being agile and responsive to the changing market conditions, eCommerce businesses can not only survive the financial crisis but emerge stronger on the other side.