E-commerce in flat lining economy, how to beat the odds

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Writuparna Kakati | 20 Feb, 2009
What has been the impact of the current economic slowdown on your e-commerce business? Needless to say, all business feel it and e-commerce businesses are suffering in the same way as the brick and mortar businesses. Even giants like eBay are reporting decrease in revenue which reflect the trouble within the global e-commerce industry.

What should e-businesses do in this situation? It seems that the negative trends of the slowdown will be over in the coming months, but instead of waiting for good times, e-businesses need to start acting now. It is just the right time to start the recovery pocess undertaking some basic strategies like-

Add value to your product- The economic weakening has pummelled consumer confidence. People are shopping less and has become more choosy than ever before. In this situation, e-businesses should look for enhancement of their products or services. In other words, they need to offer more value to customers' money. Free gifts with purchase, discount coupons, extended service duration - this type of measures often turn very effective at harder economic times.

Focus on customer service- What does a customer normally do when he is treated poorly? He just approaches another seller. It is true in any business but in e-business it probably happens most frequently. E-business offers a virtual marketplace where customers tend to be more sensitive than in the real world of brick and mortar business. Therefore, e-businesses need to be more customer focused, especially when there is surge in pessimism during a bad phase of economy. Good customer services can easily draw shoppers to visit your e-commerce site.

Continue advertising & keep marketing fresh- In e-commerce, like in any other business, advertising and marketing play a very crucial role during an economic slowdown. But often, business owners do the opposite to what they should do. They cut their marketing and advertising budgets. As a result, their current and future sales are jeopardized. Besides continuing with their marketing and advertising efforts, e-businesses should also keep in mind that they need to keep these efforts afresh to win consumer confidence in a flat lining economy. They should, for example, upgrade their e-mail marketing strategies.

Price Cutting! Don't make haste- No marketing technique can be more effective than price-cutting. But beware, it is not a good solution to fight difficult economic times. Instead, effective marketing will do much more for your bottom line than price cuts will. In e-business environment, it is not easy to convince your customers. If you lower the price of your products now, how will you justify selling them at normal price in the future? Customers might question your honesty.

Don't magnify your failure- Your sales and profit have decreased, but still you are making profits! You business is in loss, but still you exist! Be positive and changing your attitude. Don't be a contributor to the growing sense of gloom. Of course, you are in your business to grow and make profits but good and bad times are a part and parcel of businesses. The economy will bounce back and the world of e-business will be stable as well.

The bottom line? E-commerce is being affected by the weakening global economy. But hopes are still there. Bringing change into their strategy and attitude can help e-businesses to minimize these worrisome effects and pave a smoother way for the coming days.