In this instalment of our eBay Elevate webinar series, retail expert Catherine Erdly shares advice to help small businesses prepare in the best way you can to manage online retail during a recession.
Managing online retail in a recession
Recessions are challenging for businesses of all sizes – and it’s perfectly natural to feel uneasy about the uncertainty surrounding today’s economy.
In this eBay Elevate webinar, created in partnership with Small Business Britain, Catherine Erdly explores the current economic climate and its impact on business performance – and her top tips to help you navigate this difficult period.
If you missed it, fear not! You can watch the webinar on demand below. We’ve also summarised the key takeaways from the session in this blog post.
What is happening to the UK economy right now?
In short, the UK has entered a recession. The combination of soaring inflation and declining consumer confidence has hit household incomes and retail sales, which has seen the country’s overall economic output decline.
It’s perfectly natural to feel concerned during this time. However, recessions are an unavoidable movement of any economy - and things will get better. There are also some positive steps you can take to navigate online retail in a recession.
1. Delight your customer
Customer retention is more important than ever. It’s widely recognised that retaining customers is a lot cheaper than acquiring new ones - so businesses are doubling down in their efforts to keep consumers coming back. Some of the ways you can strive to achieve this include:
Surprise and delight: can you include any extra touches or unexpected upgrades with orders, such as a small gift or upgraded postage to next day delivery?
Great communication: keeping your customers informed can help to inspire consumer confidence. For example, providing regular updates about disruption to deliveries during the Royal Mail strikes.
Incentivising repeat purchases: can you include a printed coded coupon in orders to encourage repeat purchases?
2. Value for money as a key focus
During times of economic downturn, value for money - not just the lowest price - becomes top of mind for customers. So, emphasising the longevity or cost per use of your items and clearly communicating this in product descriptions can be a powerful way to appeal to consumers.
Can you also provide value with a multi-buy promotion, to encourage your buyers to order multiple quantities of the same listing by clearly displaying the unit savings they will make?
3. Diversification
Recessions are the perfect time to try new things. Can you be scientific and objective by using data to look for fresh opportunities? For example, can you expand your offering, refresh your products, or expand into new markets?
Terapeak is a great tool to help you see how certain brands and products are selling on eBay, so you can invest in top-performing inventory. This eBay Academy course also tells you everything you need to know about expanding your business internationally.
4. Staying nimble
To support your business in 2023, make sure you’re looking at cost savings and being as lean as possible. Some of the ways you can try and achieve this include:
Review your costs: look at direct debits from your bank account and make sure there aren’t any unnecessary payments. Also review your fixed costs - can any of these be reduced or re-negotiated?
Manage stock: try not to overcommit up front. Also have a stock target and stick to it, and liquidate slow moving or aged stock, where possible.
Invest in efficiencies: look at where your internal operations could be made more efficient with technology. For example, could investment in bookkeeping or stock management software save you money in the long run?
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