From one challenge to the next, brands and customers alike are entering 2023 in the face of an economic downturn. With inflation continuing and a recession looming, the big question on everyone's mind is, how do we contend with whatever this year brings?
As gloomy as some predictions can be, many online merchants are finding ways to adapt to meet shopper demands, desires, and constraints. Like them, here are some of the trends you should stay on top of in 2023 to remain competitive in the online retail space.
Concentrate on customer retention
A longstanding rule of thumb for selling is that you have a 60-70 percent probability of selling to an existing customer compared to a 5-20 percent probability with a new prospect. With the way e-commerce has exploded, it's worth a new round of research, but the principle holds water.
Acquiring new customers is, of course, paramount to growing your business and revenue, but selling (and upselling) to existing customers is generally less expensive, less resource-consuming, and can be even more lucrative. That's why more brands are investing in customer retention, showing their existing customer base how much they value them and appreciate their continued support.
This can be done with something as simple and economical as a personalized note, or with material offerings such as free gifts, coupons, or personalized discounts. Free perks programs, like Grubhub's, reward loyal customers with free products and services that can be redeemed at any time. This program is more strategic than simply showing its customers appreciation; it drives them to redeem rewards with restaurant partners, potentially bringing them more business from new and existing customers.
Maintain accurate, real-time inventory visibility
In 2023, a consumer who is searching online for an item wants to know everything about it as soon as possible--not at checkout. It includes what it looks like, what colors or varieties it's available, what it costs (including shipping fees), and when and where it can be picked up or delivered. In other words, brands need to provide online shoppers with immediate transparency into inventory and availability.
Unless your product or service is truly unique, all it takes is one strike--empty search results, needing more inventory, etc.--before a consumer moves on to another website or brand. One tactic for rescuing an unsatisfactory search is to automatically present available replacement options similar to the item a customer is searching for.
Implement stricter inventory management
Many brands and retailers contending with excess inventory--a result of over-ordering during the pandemic e-commerce boom--are attempting to offload with sales and steep discounts. The impact this is having on cash flow has brought to light the importance of good inventory management.
Excess stock is a problem for many reasons. Most items depreciate over time, and depending on the retail category, products can perish due to shelf life, age out of the season, or go out of fashion. When your warehouse is filled with slow-moving products, in addition to paying unnecessary storage costs, you also lack space and funds to bring in new items. If you need to clear out the old to make room for the new, the best method will depend on your business, but the most common solutions are clearance, liquidation, and donation.
In 2023, rightsizing your stock is a critical, financially sound strategy to not only maintain a healthy cash flow, but to ensure your customers can get the items they want when they want them.
For online merchants, staying competitive requires a cohesive, targeted, aggressive strategy across the supply chain, from sourcing to sales and marketing, customer service, online merchandising, inventory--every link in the chain. To achieve truly sustainable business and revenue growth, though, it is these types customer-centric initiatives that will allow you to indelibly weave your brand into the fabric of your customers' worlds.
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