The fear of an upcoming recession is becoming more and more likely as time goes on. No one knows if/when the economy will crash, but Shopify stores must be prepared. You can use these strategies to strengthen your ecommerce business and keep it from going under. Even after the recession, these are healthy strategies that will benefit your store in the long run.
Here’s what you can do to prepare your Shopify store for a recession.
When a recession occurs, Shopify stores with high overhead costs can have trouble making money, especially if the costs don't lead to a lot of sales and income.
You can save money by thinking about the following:
You need to look at your business critically and figure out how to keep marketing and business operations going cost-effectively without hurting the quality of your products or services.
When the economy is bad, Shopify stores tend to slow down on marketing because they think ads might not be as effective when sales are down. On the contrary, you should keep advertising your store and products. Other businesses might slow down on marketing, giving you an edge in getting the attention of potential new customers. You don’t have to spend all your money on advertising, but ensure you’re emailing, texting, and posting on social media.
Here are some simple marketing tips you can start using right away:
Companies like Amazon and Walmart thrive in recessions because they’re the one-stop shop for customers to get everything they need. Coupled with discounts, the convenience of shopping on a marketplace is too good to pass up for price-conscious consumers during recessions.
If you want your Shopify store to become the go-to store for the products you’re selling, consider setting up Cross-Store Selling.
With Cross-Store Selling, you add products from other Shopify stores to your store to create a marketplace. With this kind of sales channel, your brand suddenly becomes the go-to destination for products similar to Amazon. Turning your store into a digital mall keeps customers returning and lets you build a high-quality marketplace with products that Amazon doesn’t have. Cross-Store Selling has you covered if you’ve ever wanted your store to become the lifestyle brand for your niche.
Even with the deserved hype around SMS marketing, email marketing has always been the best way for ecommerce businesses to sell their products. Send those emails even if there’s a recession. You have to stay in touch with your customers and keep them interested.
To protect your business from a recession, you need to send emails that teach and raise awareness. The goal is to get them to act and build brand loyalty so they will buy from you again.
Set up nurturing sequences, automate your email campaigns, personalize your marketing to build deeper relationships with your customers, and segment your lists for better marketing and results.
During a recession, the goal should be to spend less, not more. Sometimes, you need to keep an eye on your finances and the time you spend on marketing. The time you spend on marketing could be used for other essential business tasks. Instead of making big changes, use automation software and tools to take care of tasks you do repeatedly in your ecommerce business.
With automation, you can keep doing important business tasks without hiring more people. There are plenty of Shopify apps that can help with automation without needing to hire expensive developers.
Amazon became the biggest online store in the world by putting the customer first, and you should do the same thing in your own business. If someone likes buying and using your products, they are likelier to stick with you for the long haul. Not only that, but they are also more likely to leave good reviews and tell their friends and family about it. During hard times, you need this kind of natural support to keep your business going.
You can do many things to make customers stay with you longer. One thing you can do is focus on making your sales funnel and customer touch points as good as they can be. Since it can take up to twelve points of contact to get a customer to buy, you want to make sure that each one has an impact and makes your potential buyers want to buy. You can use A/B testing and online focus groups to back up your gut feeling with hard data about what your audience likes.
You should also ensure that email and SMS flows are turned on so you don't leave money on the table. You can reach out to people who have abandoned their carts and offer them irresistible discount codes to get them to finish their purchases.
Make subscriptions more appealing by upselling them by putting them in bundles and giving discounts. Instead of monthly subscriptions, try to get your customers to sign up for at least a year. This will increase their lifetime value.
Use a service like Klaviyo or Postscript to send email and SMS messages. In a bad economy where most ecommerce businesses are struggling, your ability to use data and personalized marketing to keep customers can set you apart and make all the difference to your bottom line.
When sales are slowing down, it's a great time to look at your website for "low-hanging fruit" and small changes that can be made right away to boost sales.
Start by ensuring your storefront works well on both desktops and mobile devices. Put yourself in your customer's shoes and act out how they might use your store. Do you need to fix any links that don't work? Any problems that need to be fixed? Are your photos easy to see, interesting, and the right size? A little bit of housekeeping can do a lot to boost your conversion rates. These are low-cost ways to get more value out of what you already do and what you already have.
Adding a "Buy Now, Pay Later" (BNPL) tool like Afterpay can also help you make more money, especially if you sell more expensive items. Giving your customers the option to pay for a purchase over time makes it more likely that they will buy something expensive. By giving customers more ways to pay for BNPL services, you can increase the average order value and increase the number of sales.
Shop Pay is another way to make the buying process smoother. It is a service built into Shopify that makes it easy for buyers, especially those who have bought from you before, to place orders automatically during an online shopping session.
It's a checkout system that saves payment information so that people don't have to enter it every time they make a purchase. The required fields are filled in for your shoppers, which speeds up the whole process of buying and selling.
When sales are declining, opening up new ways to make money is often the best way to fix the problem.
You can make a paid community with discounts and extra offers. In the same way that sites like Patreon let content creators make money off of their fans by selling them exclusive content, you can use your email list to reach out to your brand's most loyal fans and create your own inner circle. Make your customers feel like they are part of a club, and give them benefits that are worth the price of membership.
You might want to offer digital downloads of ebooks, product guides, and branded content right on your website. Say you sell weight lifting equipment. The next step would be to offer paid, supplemental exercise videos that customers can download and use with your physical products. Try to think outside the box and offer extra resources that your current audience will find useful.
At the end of the day, running a business is all about making the customer happy. If your customer has a five-star experience with you and an average experience with a competitor, they will likely choose your storefront in the future.
As much as possible, include your customers in making a new product. Use polls on social media or SMS to find out what your audience thinks, and ask them what would make them buy new products in a recession. Find out more about how things work and how much they cost, as well as what design ideas stand out the most.
Use this feedback to make your prototypes and the whole process of making them better. When it's time to give what you've made to customers, you'll know that what they see and get is the result of many rounds of feedback and criticism.
You don't want to launch products without much thought during a recession. Since there isn't as much room for mistakes, you want to be sure that what you bring to the market will do well.
If you have items on the shelves that aren't moving, get rid of them. It's okay if you only get back what the item costs you at wholesale. Cash in the bank beats dust on the shelves any day. You can leverage analytics tools to find out which products aren’t selling well and are ripe for removal from your store.
Here are the reasons why you should leverage Carro if you want to recession-proof your Shopify store.
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
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
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.