The Acceleration of Ecommerce
With economic uncertainty on the horizon, risk aversion has already started to rise.
Across the country, businesses, investors, and customers alike have stepped back from making large purchases, preferring to save while they wait and see what happens.
For the ecommerce industry, this doesn’t sound like an opportunity. In fact, it might seem like the forecast is full of “doom and gloom”.
However, if recent patterns are to be believed, there’s really no reason for leaders in this space to panic. While layoffs and financial restrictions often come hand-in-hand with recessions…
This isn’t the case for ecommerce.
Rather than joining the masses in restricting your spending and delaying the formation of your new partnerships, now is the time to act. There are opportunities out there just waiting to be seized.
The growth of ecommerce during economic recessions
Don’t believe us? Let’s look at the most recent international market shock as an example… the pandemic.
In late 2019, COVID-19 was running rampant around the world.
Thousands of businesses feared if they could stay afloat and were taking precautions to prepare themselves for a drop in revenue - putting employees on furlough and reducing outgoings.
Many of us shared the same question. How could we ever come back from this?
Yet, despite expert predictions and senior leaders’ (reasonable) concerns… according to a recent census, ecommerce sales increased by 43% in 2020.
That’s almost double that of the previous year.
This was then followed by another (although admittedly smaller) surge in 2021, when life was starting to get back to normal and people were returning to high street stores.
What does this mean? Well, it suggests that the ecommerce industry as a whole stands to gain from economic recessions in the future, not lose because of them.
As long as you have a strong and detailed growth strategy in place and a comprehensive understanding of your customer’s pain points, the next few years could change the face of your business entirely.
Are you ready?
Why does ecommerce thrive in economic uncertainty?
To prepare yourself for the coming months, you need to understand why ecommerce grew over the last few years in order to take advantage of it.
Of course, in part, it was because people physically couldn’t go into stores… but it was also about something more.
Other factors were coming into play.
Ultimately, there’s something special about online shopping that helps customers get past their fear of spending - even during economic recessions.
1. Risk factoring
Somehow, it feels less risky to purchase a product online. When we don’t have to go through the physical motions of handing over our hard-earned cash, we can trick ourselves that we’re not spending “real money”.
2. Comparative goods
When we’re staring at a price tag in a store, it’s hard to know whether or not the product is worth the cost or if we’re getting a bad deal. If we’re online, however, where we are able to easily browse through hundreds of alternative goods, we can choose the best option for our needs. This makes the purchase feel more rational.
3. Information accessibility
Additionally, through online shopping, customer reviews and product information are right there for us to see. It’s convenient, giving us less time to change our minds. Before we know it, we’re clicking the “buy” button… much to the advantage of ecommerce companies.
How to make the most of the growth in ecommerce sales
Throughout the upcoming economic recession, then, you need to consider the thought processes of your customers and cater to their needs.
Oracle Netsuite suggests you should:
Make the most of cheaper advertising costs.
Take advantage of changing purchasing behaviours.
Invest in brand awareness and visibility.
This way, you’ll be able to secure sales even in uncertain climates.
As long as you are smart with keeping your costs low and retaining your qualified and trained employees, there’s no reason why you can’t experience bountiful success during a recession.
“While recessions affect some industries more severely than others, there are opportunities for all businesses to adapt to the changes that normally happen during an economic downturn.
For example, asset prices can decrease, suppliers may offer discounts for necessary equipment and technology, and some competitors may clear out of the market.” - Carolyn Lyden
The year ahead is yours to control.
The secrets to ecommerce business growth
There is one thing you have to remember, though.
As you proceed with your goal to come out of the economic recession stronger than before, there’s one resource that will prove key: your employees.
Investing in a strong and collaborative team for your ecommerce business is going to prove absolutely crucial in your ability to:
Be flexible and adapt to the market.
Identify trends and respond to them.
Maintain relationships with your stakeholders.
Grow revenue and scale your business.
Therefore, retaining your staff (and filling gaps when they arise) absolutely has to be your priority.
If you are unable to respond to complex customer queries or process orders in time, your reputation will take a hit.
Is that a risk you can afford to take?
Recruiting through OHO
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We’re excited to be driving UK and US innovation. Where there’s a plan, we have the people.
We’re an established and respected consultancy that offers a range of specialist services to a broad spectrum of clients and candidates within the ecommerce, IT, electronic engineering, finance and consultancy sectors.