If you’ve been paying attention to the news (or your wallets), you’ve probably noticed that the price of commodities has skyrocketed. Thanks to inflation, consumers are spending $445 more per month buying the same items they did a year ago.
With the highest inflation rise since the 1980s, many consumers are buying less, causing a notable impact on profit margins due to a decrease in website (and in-store) traffic, smaller average cart sizes, and a drop in conversion rates.
In order to remain competitive, e-commerce stores will need to adjust their consumer approaches to make sure they’re still delighting shoppers at a time when they’re already feeling financial pressure. In this article, we’ll take a closer look at five ways to combat rising consumer costs and keep your customers happy through an unpredictable 2023.
Give Customers the 411 on Your Products
With inflation comes more shopping around for the right product and the best price. Having the right product information on your pages is pivotal in streamlining your customers’ research process and nudging them in your direction.
To achieve this, ensure you provide these important details:
Include detailed product descriptions.
This should include everything from size to cost to warranties to product recommendations for similar or complementary items.
Feature a variety of product images.
Showcase products from different angles. If possible, include images of people using your products to showcase their benefits better.
Ensure your site has easy navigation.
Your website should provide clear product categories and menu items, plus a search bar to find products quickly. There are even tools you can use to create personalized menus for effortless user navigation.
Highlight product reviews.
Adding customer ratings and reviews will not only add credibility to your e-commerce site, but allow your customers to make the informed decisions they want.
E-commerce subscriptions are predicted to generate over $38 billion in revenue in 2023 in the United States—more than $15 billion since 2020.
Online subscriptions are growing in popularity due to the value and ease they offer consumers. To get your customers to subscribe to a recurring delivery from your online store, make sure to highlight the long-term savings by signing up and emphasize this messaging at every touchpoint.
If you want to make your subscribers really happy, reward them with personalized offers as a thank-you for their membership.
Reduce Shipping Costs
Here’s a fact: 93% of online shoppers will buy more if free shipping is available.
E-commerce retailers already know that shipping is one of the most critical components of the online shopping experience. Besides decreasing the number of abandoned carts and increasing sales, lower or complimentary shipping is a game-changer in persuading shoppers to buy.
If possible, offer free shipping on purchases, as long as it’s not adding strain to your bottom line. Otherwise, try one of these options to encourage your shoppers to cross the checkout line.
Remove shipping costs on specific items only.
This is a great way to appeal to your customers and get rid of unwanted inventory.
Offer free shipping on a minimum order value.
For example, any customer who spends over $50 qualifies for free shipping.
Feature free shipping as a limited-time promotion.
Highlight this incentive on your website’s home page and mail it out to your subscribers.
Present it as a “gift” for first-time customers.
Nothing is easier in attracting new customers than giving them a reason to buy.
Price is a key factor many customers contemplate when shopping. And while it might be a natural assumption to attract visitors to your site by lowering costs, that’s not always the case.
Your best bet? Do your research first, by reviewing real-time data on the retail market and on competitor prices. This information will enable you to price your products in a way that appeals to shoppers, while also earning you a profit.
A few pricing strategies to consider:
Raise your prices.
This may seem surprising, but because inflation rates are so high, most online retailers will have to increase their pricing too. The reality is that even during difficult economic times, the majority of shoppers will actually pay more for products from trusted brands. (It also eliminates the risk of customer churn.)
Freeze your prices.
Rather than lowering the cost of your products, lock them in for a set period of time to showcase that you both understand and support the challenges of present-time spending.
Old Navy showcased this really well last school season with their Price ON-Lock campaign, which locked in prices for kids to make back-to-school shopping more affordable for families.
Many online stores are utilizing automation to adjust prices instantly, based on market insights and other variables. This is especially helpful for shoppers who frequently compare costs from multiple sellers.
Offer timely discounts.
Of course, offering deals is never a bad thing for your customers. Just remember that it’s not necessary for everything on your site.
Instead, provide limited-time offers to encourage shoppers to buy within a specific time frame. You can also use discounts to get rid of unwanted inventory, like seasonal items or other products on your shelf that you want to get rid of. Your customers will appreciate the deals, and you won’t have to compromise your margins.
Successful e-commerce brands know that building trust is the first step to developing long-term loyalty. And at a time when consumer spending is taking a dip, this is more important than ever.
A study by Fundera found that 43% of customers spend more on brands they are loyal to than those that they are not. Getting your customers to trust you begins with engaging them. And the best way to achieve this is through personalization, which allows you to create tailor-made shopping experiences based on a customer’s past shopping and purchase history, product searches, and wish list saves.
Loyalty programs are another beneficial way to reward customers for shopping with you. Much like a subscription, loyalty programs can help you retain your existing customer base and make them more willing to tell others about you. Most importantly, they make customers feel special—and doesn’t everyone like to feel that way once in a while?
Deflating Consumer Concerns
While this year is likely to give the retail industry its share of highs and lows, there is light at the beginning, middle, and end of the revenue tunnel. Yes, the global e-commerce market is facing challenges. But with proactive strategies in place, your e-commerce store can still rise to the top.
The key is to remember that your customers are looking for a soft landing right now. Give them this by delivering exceptional shopping experiences that include plenty of personalized content and loyal-worthy incentives that keep your e-commerce brand top of mind. Because at the end of the day, making them feel confident in their future is the best way to remain confident in your own.
Customer Granified Experiences
We can’t change the economy, but we can help you maintain your conversions through even the toughest of times. That’s because we know exactly what your customers want, and have the tools to deliver it in a way that feels like it was made just for them (because it was).
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