Having only just recovered from the impact of COVID19, e-commerce businesses are again being forced to rethink their strategy due to rising inflation.

Research has shown that the average person is 3 times more concerned about inflation than the coronavirus, which directly affects their online shopping behaviour and thus online business.

What should businesses do in 2023 to tackle this problem and still thrive online?

This article will guide you through a clear action plan with practical tips & tricks.

Have we got your attention? Great! Now let’s get to business:

Action 1 – Focus on raising customer loyalty

In the last year, 35% of Shopify businesses have seen cart sizes shrink and 50% are seeing less traffic to their website, lower conversion rates and rising acquisition costs for new potential customers. This however makes sense, keeping in mind the changing marco-economical environment which brings uncertainty upon customers.

What can you thus do as a business to change the online behaviour?

The answer lies in building loyal customer relationships. Did you know that the probability of a sale from a new customer is between 5 and 20% versus 60-70% for a returning customer? Did you also know that almost 40% of loyal customers will buy your brand’s products even if they have cheaper options? Yep, we know, mind-blowing!

Keeping this in mind, here are two strategies for building up customer satisfaction:

  1. Price strategically but keep shipping free by:
    • Expanding free local pickup and delivery
    • Offering discounts via product bundles
    • Adding subscriptions or memberships

⇒ This way, shoppers will order more often, buy more expensive items and increase their average order value!

  1. Reduce overhead costs with automations. Simplifying the processes within your business will reduce the risk of human errors and free up resources for your business. For example: instead of having a team of multiple employees for handling customer service on all platforms, look into the possibility of an all-in-one CRM tool. This way, only one person can be in charge of this tool and the other team members can be used for other tasks.

Action 2 – Accelerate long-term growth plans

Worldwide, brands expect supply chain issues to get worse this year due to:

  • The Russian invasion in Ukraine and therefore forcing transportation via longer routes oversea instead of via trains through Russia
  • Lockdowns in the ports of China
  • Rising inflation

Because of this, brands are battling unreliable and pricey supply chains. 

Pivoting your strategy now to invest in logistics will help meet customer demand and lead to stronger networks in the long run. How can you future-proof your logistic networks?

  1. Hold more inventory if you can afford to and/or diversify product sources to reduce reliance on individual partners. Finding new suppliers, sourcing products from multiple suppliers or countries and sourcing products and raw materials closer to home are all ways in the right direction!
  1. Reduce return rates by increasing customer confidence.
    Did you know that customers, worldwide, return on average 20 to 30% of their online purchases versus only 8 to 10% for in-store purchases?
    Instead of just starting by charging your customers for returns, why not try one of these simple tactics?

    • Provide detailed product descriptions on your website
    • Provide 360° product views, on both desktop and mobile
    • Include customer reviews 
    • Make use of Augmented Reality
    • Try out livestream shopping

Action 3 – Experiment with brand collaborations

With rising privacy regulations, brands are realising the power of first-party data to offer more relevant and personalised content to their customers. By sharing audiences through collaborations, you can easily reach new customers, earn their trust quickly and tackle rising acquisition costs within paid channels.

How can you bring collabs to life in 2023?

  1. Build collabs with brands as well as with individual influencers.
    1 in 3 shoppers say that recommendations from influencers matter more to them than recommendations from friends and family. But remember that your actual customers can be your influencers as well. User-generated content can be almost 9 times more impactful than influencer marketing.

  2. Rethink your loyalty program together with other brands.
    Here are 4 steps to start a collab-driven loyalty program, which can easily be set up via our favourite email marketing platform, Klaviyo:

    • Identify brands that resonate with your customer base and offer complementary products.
    • Invite another brand’s fans into an offer, special discounts or early access to a drop or collab.
    • Determine how customers can prove that they are a fan of your brand so that they can access the exclusive opportunities.
    • Expand your collab network regularly to encourage repeat purchases and give customers a reason to stay in the program.

Source: Shopify plus 

We hope to have given you the right motivation and tips to move forward in 2023 and keep on scaling up your online business!

Any specific questions or wondering how The Dotters can help you with a tailor-made online strategy? Get in touch!

This post is also available in: Dutch