With the UK currently facing an economic crisis set to last until 2024, I know it’s a challenging time for many businesses across the country, and as shoppers look to reduce their spending, it’s set to be a particularly tough time for retailers.
Powered by the recent findings of Visualsoft, I today will be sharing guidance on how you can meet your customers changing needs and expectations.
Let’s get into it.
A Consumer Breakdown
As I briefly touched upon above, Visualsoft in October 2022 commissioned a YouGov survey of 2,000 shoppers across the UK. This granted the VS team a clearer understanding of the impact the cost of living crisis is going to have on consumer shopping habits. Let’s look at these figures at a glance.
52% of the shoppers surveyed were females, with 17% of the total audience being located across Wales, Scotland, and North Ireland. This was closely followed by the South East (13%) and London (13%). The North East of England sat at the bottom, making up just 3% of consumers.
However, the key takeaways here are those relating to Gross Personal Income. Whilst 20% of those surveyed did not declare their income, 35% of consumers earned under £20,000, with only 5% earning £60,000+.
Now let’s take a look at how these consumers predicted shopping habits across Q4, and how you as a business owner can help support them.
Tightened Budgets
During a recession, shoppers’ main focuses are on bargains, their budget, and lower-cost alternatives to activities such as eating out and holidays.
In previous recessions, the consumption of services has usually fallen faster than the consumption of goods, but, to gain an insight into how consumers planned to spend across the next 12-18 months Visualsoft asked how their habits may change with the current economic crisis. They found that just 13% would be aiming to spend more, whilst 51% of shoppers intend to spend less or place fewer orders.
Naturally, there is a feeling of uncertainty in these times, so around 36% of respondents were undecided on if they would increase or decrease their spending.
Whilst to some businesses this may seem like a negative forecast, do not fret as you can view this in a positive way that 49% of shoppers haven’t yet fully committed to reducing their budget this year. And, you can utilize this.
Visualsofts Top Tips
- Maximize Spending Opportunites
Turn your attention to increasing your store’s average order value through the introduction of product bundles, up-selling, cross-selling, and receiving rewards for spending thresholds.
- Increase Value Perception
Most shoppers will be focusing on making savings this season, so ensure you are highlighting offers and discounts, and highlighting other ways that your products add value (for example, as an alternative to higher-priced items).
Focusing On Preferred Payment Options
It’s known that a large number of online shoppers will abandon a purchasing journey if not presented with their preferred payment option at the checkout, so it’s important to understand your customer’s preferences.
With more financial constraints, it’s possible that some shoppers will be looking for alternative payment methods to help spread out or delay costs. Visualsoft found that 31% of shoppers plan to stick to using a debit card for online purchases, whilst 13% will be using Apple Pay or Google Pay. Unsurprisingly, over half of those surveyed will be relying on delayed payment methods; 27% confirm using credit cards, 18% stated using split payment options and 11% prefer using buy now, pay later options, like Klarna.
Visualsofts Top Tips
- Offer Multiple Payment Options
For a higher checkout conversion rate, offer more than one standard debit/credit option where possible, and partner with a trusted payment gateway provider that supports multiple payment methods.
- Maximize Convenience
With many shoppers planning on using payment methods such as Apple Pay or Google Pay, providing great payment efficiency should be a key priority.
Highlighting Clear Returns
Returns policies are just one of the downsides of the eCommerce industry, with fashion and footwear brands experiencing high return volumes in recent years. But, with online retailers looking to cut down costs and reduce spending in these times, charging customers to return items is becoming the new norm, even if it is unclear how this may impact conversions.
Following the survey, it was found that 54% of shoppers confirmed they will intend to check return policies before they buy, 34% feel like the cost of living won’t increase the chance of them reading them in advance and 12% were undecided. So, whilst some shoppers are now more considerate, it seems some aren’t.
Visualsofts Top Tips
- Review Your Process
In the current climate, having a strong returns process could put you at a greater advantage against your competitors, so review what you currently have in place to ensure you’re not turning away potential buyers.
- Be Clear
Ensure your policy is clear to understand and leaves no stone unturned. Building customer confidence could lead to future purchases.
Offer Diverse Delivery Options
Shoppers are looking for speed, convenience, and value when buying online, and without sufficient delivery options, basket abandonment is guaranteed.
6 in 10 consumers acknowledged that they’d rather pay for a service that took longer and costs less. While 6% still want next-day/named delivery, 22% of shoppers expressed a desire for an annual delivery subscription (a service already offered by retail giants like ASOS, Lush & Pretty Little Thing). 10% on the other hand look toward other delivery requirements. This data highlights the importance of diverse delivery options and giving customers the level of choice they desire and need.
Visualsofts Top Tips
- Provide Varied Options
Offering multiple delivery services to accommodate varied requirements puts you at a higher advantage of retaining customers. Being able to rely on multiple delivery providers also prevents being at risk during periods of peak shopping or industrial action.
Increasing Voucher Availability
Discount codes continue to play a significant role in the growth of eCommerce, and some online studies show that customers will spend more when provided with a voucher. As not only do they feel they are getting a great deal but they feel valued too.
Voucher appeal is universal across consumers, but it’s found that women between the age of 25-34 are more likely to use them. 68% of consumers also confirmed they are likely to look for vouchers when shopping online.
Visualsofts Top Tips
- Utilize Voucher Sites
Having a presence on voucher sites can be crucial when it comes to preventing hard-earned consumers from going to a competitor when making online purchases.
- Use Money-Saving Alternatives
If you prefer to not rely on voucher codes, look towards other alternatives including; utilizing competitions and loyalty schemes. This also removes the desire for customers to leave your site and search for codes.
Other key tactics to use during Q4 and beyond include:
- Demonstrating Value
With more shoppers monitoring spending, demonstrating competitive prices, deals, or productive longevity will help you win sales.
- Recognized Loyalty
It’s found that most shoppers are more likely to return to a store that rewards them after repeat purchases, however, your loyal scheme must be carefully tailored to suit your audience.
- Rewarded Referrals
Word-of-mouth marketing will always carry power, so encourage your customer to spread brand awareness with appealing, low-effort referral schemes.
- Brand Familiarity
Shoppers will always buy from brands they know & love, so focus on winning purchases from those who are already loyal to you.
- Cost-Saving Subscriptions
Most customers aren’t currently looking to sign up for extra financial commitments, so be sure to add more value to subscriptions and reduce the barriers to brand-sign ups.
Finally,
Thank you to Cameron Wood, Visualsofts Enterprise Sales Director for sharing their findings and great knowledge with me. After meeting in 2019 whilst I was a consultant for VS clients, we have since formed a transparent mutually beneficial partnership and continue to work closely to provide businesses with the very best eCommerce support.
If you would like a copy of the PDF report then please also reach out to Cameron via Linkedin and he can send you a copy.
Cameron works alongside those business with an annual £1m online revenue (whether that’s on Amazon, or website) and is diverse when it comes to your sector or line of retail. However, if you generate £1m offline, Cam and VS are happy to be flexible and provide support to you too. As long as you have a credible reputation and are financially comfortable.
If you are an online retailer or wanting to move online with the support of one of the biggest and most tested eCommerce Platforms in the UK then reach out to Cameron Wood today for a free consultation and if you are not the right fit for Visualsoft at the moment I am sure Cameron will point you to me, and, I, myself would be happy to help you through my own Digital Marketing Agency, Myk Baxter Marketing.
Thanks for reading,
Myk Baxter, eCommerce Consultant
The post How To Accelerate Your Business in a Recession appeared first on eCommerce Expert.
