The global economy is volatile, and many businesses worldwide are feeling the effects of an upcoming recession. As a Shopify store owner, it’s important to be aware of and prepared for economic downturns to survive them.
In this ebook, we’ll explore how you can recession-proof your Shopify store so that it continues to thrive regardless of the economy. With our tips and advice, you’ll be able to ensure an economic recession doesn’t negatively impact your business.
We’ll cover strategies such as cultivating customer loyalty, diversifying revenue streams, finding operational efficiencies, and leveraging technology to stay competitive in a market with fewer customers and tighter budgets.
Being prepared for a recession is essential for any business owner but especially those running a Shopify store. By following our advice on recession-proofing your business, you can ensure that any economic downturn won't ruin your plans for success.
Putting measures in place like cultivating customer loyalty, diversifying revenue streams, finding cost savings through operational efficiencies, and leveraging AI technology will help guarantee that your business remains strong despite what's happening with the broader economy.
With these strategies in place now rather than later when conditions worsen economically, you'll already be ahead of the game when weathering any stormy financial times that may come along in future years!
How to prepare your Shopify store for a potential recession
Recession-proofing your Shopify store starts with understanding the economic risks associated with downturns. When sales slow down due to a recession, businesses often find themselves struggling financially. This means that actions such as reducing costs must be taken to ensure the long-term viability of your store.
It’s also important that you maintain customer loyalty during these times, as loyal customers can help carry your business through tough times. Additionally, diversifying revenue streams can provide increased stability; if one stream of income is reduced due to economic conditions, another may remain viable. Finally, taking advantage of technologies such as artificial intelligence (AI) can help you reduce costs while still delivering better customer experiences than your competitors.
Keep fixed costs low
Shopify stores must look for ways to reduce their fixed costs to recession-proof their business. One way to do this is to examine which tasks can be automated and make the switch from manual labor to automation as necessary. Automation can reduce the time and energy it takes to perform mundane tasks, freeing up more resources for other store areas.
Additionally, Shopify stores should consider renegotiating contracts with vendors in order to obtain discounts or lower prices on products and services. This can help reduce costs associated with goods or services that are used on a regular basis and can have a big impact on the bottom line.
Finally, Shopify stores must closely monitor their financial statements to identify areas where cuts can be made without hurting the business’s growth potential or profitability. This could include cutting back on advertising spend, implementing cost-saving strategies in production processes, and looking for opportunities for savings within the supply chain.
By closely monitoring expenses and being proactive about finding ways to keep fixed costs low during an economic downturn, Shopify store owners can ensure their business remains resilient no matter what challenges come their way.
Concentrate on your best marketing channels
It’s more important than ever for Shopify stores to focus on their best-performing marketing channels to maintain and even build growth.
One of the most effective methods for optimizing the user experience on their store website. This should include making sure that the right products are highlighted and easy to find, which will increase the likelihood of someone making a purchase or being interested in learning more about other products.
Additionally, social proof can be utilized through online posts or advertisements to create a sense of trust and credibility from potential customers. This can be done through customer reviews, testimonials, social media endorsements, or influencer collaborations.
Cross-Store Selling with other brands can also help Shopify store owners maximize their growth potential while in a recession. By building an internal marketplace within their store that includes different partner brands, they can expand their product selection and meet the needs of consumers who may have limited resources during a recessionary period. Additionally, these partnerships can provide cross-promotional opportunities that can help drive increased traffic and sales to both parties involved.
Shopify store owners need to choose partners carefully, as they should be aligned with the same target audience to reap mutual benefits from the partnership.
Finally, Shopify stores should take advantage of digital marketing tools such as search engine optimization (SEO) and pay-per-click (PPC) advertising techniques to reach potential customers during a recessionary period.
By targeting keywords related specifically to their products or services, stores can get organic traffic from search engines and paid traffic from campaigns organized through PPC advertising platforms like Google Ads or TikTok Ads. Utilizing these tools correctly can go a long way towards helping Shopify stores successfully grow despite any potential economic downturns they may face.
Leverage Cross-Store Selling
Shopify stores should consider leveraging Cross-Store Selling with other brands to recession-proof their store. By partnering with well-known, established companies, store owners can increase their brand awareness and reach a larger customer base. This in turn leads to increased conversions, higher average order value (AOV), and greater customer retention. Partnering with other brands also helps Shopify stores build trust and credibility as customers are more likely to purchase from businesses they recognize and trust.
Furthermore, partnering with other brands helps Shopify stores diversify their product offerings, allowing them to tap into new areas of the market that otherwise wouldn't be accessible.
When creating partnerships with other brands, it’s important for Shopify store owners to keep in mind that the quality of the experience should be high. After all, customers will not come back if they have a bad experience.
Therefore, it’s essential that when Shopify stores create partnerships with other brands they ensure that the quality is better than what Amazon provides. This means ensuring that there’s clear communication between both parties about expectations and delivery timescales, delivering products on time, providing customer support quickly and efficiently, and investing in high-quality customer service tools like chatbots or virtual assistants to make things even smoother for customers.
Every touchpoint along the user journey needs to be considered carefully so customers are consistently presented with a cohesive experience across channels. This includes everything from logos and colors used in branding materials to how orders arrive at a customer’s home – all must align perfectly between both parties if the partnership is going to succeed long-term.
Investing some time upfront in creating a comprehensive strategy for how these touchpoints should look will help ensure success when working together on campaigns or products down the line.
Email marketing always survives a recession
In a recession, email marketing is an excellent marketing channel for companies to use. Email remains one of the most effective ways for businesses to reach out and engage with their customers, providing them with targeted content that resonates with their interests. Email campaigns can be personalized to each customer’s preferences, allowing marketers to focus on creating content geared towards the specific needs of their customers.
Additionally, combining email campaigns with SMS can create a powerful combination that helps businesses stand out from the competition and deliver relevant messages straight to their consumers’ inboxes or phones.
When it comes to crafting email campaigns, timing is everything. Knowing when to deliver emails versus SMS messages can make all the difference regarding how successful a campaign will be.
During a recession, customers may not want to receive too many emails in fear of being bombarded by one-off sales offers during a time where finances may already be tight. On the other hand, using SMS messages as reminders or quick updates on deals or promotions can be beneficial in helping keep customers engaged and informed without necessarily having to commit large amounts of money.
Overall, email marketing provides businesses with an effective and cost-efficient way to stay connected with their customers during a recession. It allows companies to send more personalized messages tailored towards each customer’s interests and needs while also being able to easily track metrics such as open rates and click-through rates so they know what strategies are working best for them.
When used correctly, it’s been proven time and again that email marketing is an invaluable tool in helping companies stay top-of-mind even during difficult times financially.
Automate your store and operations
Automation is an incredibly useful tool for optimizing time and money, especially during a recession. By automating certain processes, such as customer service, product fulfillment, sales and marketing tasks, retailers can save on labor costs while also ensuring that the customer experience remains consistent and high quality.
Shopify has embraced automation by offering a multitude of apps in their app store, making it easy to find solutions with automated features. These apps range from payment processors, email marketing services and customer service systems to shipping integrations and inventory tracking tools.
Automation not only helps you save money by reducing labor costs during lean times, but it can also improve customer service quality. Automated services can quickly respond to customers’ inquiries without requiring them to wait for human assistance. Additionally, automation can streamline sales processes by helping to target the right prospects with personalized messaging that resonates with each segment of your customer base.
Automation is also extremely useful for maintaining accurate inventory levels so you don’t overstock or underserve customers when sales fluctuate due to current economic conditions. Shopify offers numerous integrations between its platform and many popular third-party automation apps to make this process simple and straightforward.
Maximize Customer Lifetime Value
Customer Lifetime Value (LTV) is an important metric for any Shopify store. It measures the total lifetime revenue that a given customer generates for a business over their entire relationship with the company. Maximizing LTV helps ensure that businesses are getting more value out of each customer, while also making them more resilient in times of economic difficulty, such as recessions.
In particular, having a higher LTV means that businesses can weather downturns in the economy with fewer losses, as their loyal customers will be more likely to stick with them even if their spending power declines. As such, it's a great way for Shopify stores to recession-proof their business by investing in long-term customer loyalty and retention.
There are various ways that Shopify stores can maximize Customer Lifetime Value and create more resilient businesses during recessions. For example, offering discounts or promotions specifically targeted at loyal customers can be effective at increasing LTV.
This could include things like offering special loyalty rewards or free shipping on orders above a certain value. Additionally, providing excellent customer service is a key part of increasing LTV – when customers have good experiences with a brand they are more likely to remain loyal and keep coming back in the future.
Therefore, investing in good customer service practices is essential for any shop hoping to increase LTV and make their store better able to withstand economic downswings.
Finally, data analysis tools such as predictive analytics can help Shopify stores get even better insights into how they can maximize Customer Lifetime Value and stay resilient during times of recession. Predictive analytics allow companies to identify which customers are most likely to stay loyal over time and target them specifically with offers or discounts designed to further increase engagement and thus LTV.
This targeted approach allows companies to reap maximum benefit from their current customer base while also attracting new customers who may be willing to become loyal longer-term customers during periods of economic instability or uncertainty.
Use smart bundles to get more money out of each order
Bundling items together is a great way for Shopify stores to increase their average order value (AOV). By grouping related products together, stores can offer an irresistible package of items. This creates an incentive for customers to purchase multiple items as part of one single transaction.
In addition, bundles make it easy for customers to purchase multiple items at once instead of spending time adding several individual products to the cart. Bundles also provide convenience and value-for-money opportunities that customers simply can’t find elsewhere. This makes them ideal for boosting AOV and driving more sales.
Amazon is a great example of how powerful bundling can be when used properly. It uses bundles, upsells, and helpful recommendations throughout its website and mobile app to drive additional purchases.
For instance, Prime members have access to exclusive deals on bundled products, making it more attractive for them to shop with Amazon instead of other retailers. Additionally, Amazon’s “Frequently Bought Together” feature provides customers with personalized recommendations based on their past browsing history and buying habits. All these tactics help Amazon increase its AOV significantly compared to other online stores that don't use bundling techniques as effectively.
Shopify stores should consider implementing bundles in their own marketing strategies in order to take advantage of the same benefits enjoyed by Amazon. First, owners should brainstorm ideas on what kinds of bundles they can offer that would be appealing and useful for their target audience. It’s important here not only to think about what kind of bundle will attract customer attention but also what kind of bundle makes sense from a business perspective, such as offering discounts on bulk purchases or free delivery when certain bundles are purchased together with certain conditions apply etc.
Once ideas have been identified, owners should create effective product descriptions that highlight the various features included in the bundle and make sure it stands out from the rest of their offerings so shoppers will be drawn towards them during decision-making moments.
Finally, owners should track metrics such as conversion rate and AOV before and after introducing bundles to assess whether any changes have been successful or not. This approach helps ensure that Shopify stores are utilizing bundling effectively, leading to higher AOVs over time.
Focus on conversion optimization
For Shopify stores to recession-proof their businesses, it’s important to focus on conversion optimization. This means improving the customer experience and journey in order to increase sales. This can be done by optimizing the website's speed, making checkouts easier, and getting the right traffic.
A faster website can reduce customer frustration, encourage repeat visits, and prevent shoppers from abandoning their carts. An easy checkout process will improve customer satisfaction by eliminating unnecessary steps, lengthy forms or extra pages that could deter people from completing their purchases.
Conversion optimization also requires analyzing data to better understand customer behavior. By looking at website analytics such as pageviews, bounce rates and customer journeys through your store, you can get insights into how users interact with your website.
This data can identify areas of improvement such as where people are dropping off in the checkout process or which pages need more attention in terms of design and content.
Additionally, utilizing A/B testing can be a great way to optimize certain elements of a page such as call-to-actions or headlines, to ensure visitors convert into paying customers at an optimal rate. This helps Shopify stores increase revenue even during periods of economic downturns.
Find creative ways to make money
One of the most creative ways for Shopify stores to make money during a recession is by leveraging TikTok. TikTok has become one of the most popular social media platforms, with millions of users around the world, and it can be an incredibly powerful marketing tool for businesses.
When used correctly, Shopify stores can use organic reach on TikTok to get their products in front of potential customers and increase sales. Additionally, TikTok offers limited advertising opportunities for Shopify stores, so it's important to focus on organic growth through content creation and engagement.
Another great way to make money during a recession is by running local events that cater to their target audience. Events are a great way to engage with customers and introduce them to your products in person, build relationships with influencers in your industry and build brand awareness.
Additionally, hosting local events is a great way to build a community around your business and build relationships with customers who may not have heard of you before. Furthermore, these events can be monetized through ticket sales or sponsorships if done correctly.
Finally, setting up a resale program can be an incredibly effective way for Shopify stores to make money during a recession. These platforms allow businesses to list items for sale at discounted prices and generate revenue from consumers looking for good deals on quality products.
Additionally, businesses can use these platforms not only to generate income but also as another avenue for marketing their products by engaging with potential buyers and building relationships with them over time. By leveraging these platforms' features, Shopify stores can create an additional revenue stream that is recession-proof and easy to maintain over time.
Try to get rid of products that aren't selling well
Shopify stores, for the most part, have limited resources. Keeping a large inventory of products can be expensive and is not always necessary. It is important to focus on what is selling well and optimize stock levels accordingly in order to recession-proof your store.
One thing that is often overlooked when it comes to dealing with unsold items is the option of Cross-Store Selling. By partnering with other brands, you can create a virtual inventory that allows you to add and remove items quickly without having to deal with costly freight and storage fees.
This arrangement also allows you to stay up-to-date on trends to ensure you’re stocking products that are likely to sell well. Additionally, Cross-Store Selling is often accompanied by marketing opportunities such as cross promotions or influencer collaborations which can help drive traffic and sales to your store during tough economic times.
In addition to Cross-Store Selling, there are several other ways for Shopify stores to reduce their inventory level and cut costs in order to recession-proof their business. For example, running promotions or discounts on certain products can encourage customers to purchase more items at once and thereby reduce the amount of unsold stock in the warehouse.
Another option is using third-party marketplaces such as eBay or Amazon which can help move excess stock quickly without having to pay upfront listing fees or long-term storage fees associated with them. Finally, stores may also choose to explore consignment models where they send out their products with predetermined sale prices but don’t incur any monthly expenses until the item sells.
Overall, there are many creative options available for Shopify stores that allow them to manage their inventory levels while still making money during difficult economic times. By being strategic about what products they sell, how they promote them and where they list them, businesses have a much better chance of surviving during challenging periods like this one.
Why you should use Carro to recession-proof your Shopify store
Here are the reasons why you should leverage Carro if you want to recession-proof your Shopify store.
Get discovered by customers from other brands
With Carro’s focus on Cross-Store Selling, your products become part of a highly-curated marketplace, but unlike Amazon’s bloated SKUs, your products are much more likely to be seen. Use Carro to connect with other brands to co-market each others’ products to create a win-win situation.
"In addition to a nice contribution to the bottom line, it was also one of the most highly-engaged social posts for the year."
David Krimper, Director of Ecommerce, Manduka
Fulfillment is handled for you
The beauty of Cross-Store Selling is that you don’t have to house the products for other brands in your warehouses. Orders are automatically sent to the brands so they can handle fulfillment themselves.
“Before we joined Carro, we had put our company on the market. We thought we needed capital to expand our traditional wholesaling. Now, we’re able to meet our goals without having any cash come out of pocket. We’re tripling and quadrupling the numbers of units that we move because we have access to so much more inventory.”
Amy Richardson-Golia, June & January
Grow AOV, LTV, and retention
One of the most exciting reasons to use Carro is that it’s the best strategy for growing your Shopify business in the long run. By working collaboratively with other brands, your brand will set itself up for success. Your Shopify store will become THE destination for your niche. If you sell beauty products, Cross-Store Selling allows you to grow your product listings so your customers keep coming back for more.
One of the best reasons to shop on Amazon is convenience. Being able to buy everything you need in one place is a powerful motivator. Wouldn’t you love it if your Shopify store was the go-to place for your customers’ needs?
"Take my word for it, if you install Carro, you are going to see what I’ve seen. Which is a dramatic increase to average order value, especially on orders that contain Carro products, which for us is over 80% increase to AOV. "
Ryan Pamplin, Founder & CEO of Blendjet
To learn more about how Carro can help your Shopify store grow, check us out on the Shopify App Store.