As digital commerce brands prepare for this year’s holiday season, many are adjusting their strategies and playbooks to respond to the overarching sentiment felt across the globe: a recession is upon us.
With inflation rising and consumer wallets tightening, every business leader is faced with making tough decisions about where to invest and how to drive growth amidst uncertain economic conditions.
Not only do decisions need to drive positive short-term results, they also need to support the long-term vision of where the business is headed.
At Apply Digital, we’ve worked with many different types of digital commerce businesses over the years. In reflecting on what makes some businesses thrive in challenging environments while others stumble, here are six areas of focus we’ve seen surface time and time again. As you place your bets on which activities to double down to drive growth, consider what role these tactics are playing in your own business.
1. Invest in your brand
At its core, investing in your brand means putting your customers first and being intentional about the experience you’re providing them. This includes having a rich understanding of who your customers are, their preferences, and what drives purchase decisions. Only with this deep level of insight will you be able to craft brand engagement strategies that truly resonate with your target audience.
A key thing to realize here is that as the economy and social climate shift, so will your customers’ preferences, fears, and aspirations. Don’t make the mistake of thinking that the persona exercise you did a year ago is sufficient to inform your strategies in a market that continues to shift drastically. Everything from the content on your site and your end-to-end product experience should be informed by rich, timely, customer insights.
One of the biggest mistakes we see companies make here is dismissing branding activities as something that can be cut with no consequences during an economic downturn. Many executives simply default to pouring more money into performance marketing or short-term demand-generation tactics. This is a mistake. While branding and content marketing activities might not have the most measurable and direct path to short-term ROI, they act as one of the biggest drivers to succeeding in a competitive market long term.
If you study economic cycles and how businesses perform, it is often the companies that maintained or increased spending around their brand activities that come out on top. As soon as the economy begins to head back into expansion mode (which it inevitably will), the teams who invested in creating differentiated experiences and offerings will see the fastest growth. Companies that default to the same cost-saving strategies as their peers are the ones left playing catch up.
2. Prioritize retention tactics
As inflation continues, consumers are becoming more discerning and selective about what they spend their hard-earned money on. For businesses, this means it’s paramount to engage and retain your current customer base.
Industry benchmarks for digital commerce report that acquiring a new customer costs five times more than retaining an existing customer. So if you’re looking for opportunities to maintain bench strength and have a high degree of confidence in your ROI, retention strategies could play a powerful role.
Brands that proactively look for ways to instill confidence in their product quality, and provide exceptional customer experiences, will be well-positioned to retain their current customer base.
There are many ways to do this. You could invest in building highly personalized site experiences, experiment with retargeting marketing strategies, offer timely promotions, or create helpful product guides for your best-selling products or services. Any way that you can tap into your customers’ insights and encourage them to stick around your site is a positive path to increased retention and conversion.
3. Invest in a good CRM before performance marketing
One of the easiest (and laziest) approaches to driving more sales is to pour money into performance marketing. While it has an important place in your marketing plan, it’s often what everyone else in your category defaults to. Advertisement-led marketing won’t provide a competitive advantage for your brand long term.
On top of this, performance marketing programs are becoming increasingly more expensive to maintain. With ad platforms monopolized by industry giants Meta, Google, and TikTok, you’ll continue to pay more for customer acquisition with fees continuing to rise, and data restrictions tightening.
Rather than leaning too heavily on performance marketing, consider the role that a well-configured CRM platform can have on both your customer acquisition and retention efforts.
Great CRMs enable you to engage your current customers in a highly personalized way. This gives you more control over the messaging you’re pushing out and provides a rich feedback loop of customer insights that you can act on in the future. There are many CRM tools to choose from, including Klaviyo, Voyado, and DotDigital.
Investing in a CRM strategy provides a cost-effective way to engage with people who you know are already interested in your product since they’re visiting your site. Tracking customer behavior such as the products they’ve viewed, purchased, or saved in past, gives you a ton of data to use when personalizing copy and creating sticky customer experiences.
4. Audit and improve your site ‘table stakes’
In today’s competitive eCommerce landscape, there are some elements to site performance that are now ‘table stakes’ when it comes to capturing and keeping the attention of a prospect.
Things like your site speed, device responsiveness, and ease of navigation have major impacts on whether a person will spend time on your site and the opinion they form about your brand. For a quick check, compare your bounce rates and conversion rates against industry standards to see where you stand.
Taking the time to do a simple site audit can make a huge difference in your overall site performance and overall business KPIs. Here are a few questions to ask in your audit:
Is there accurate and consistent product information available across all digital channels?
Does the site provide a smooth checkout process along with multiple payment options?
Is the load time of the site under 2.5 seconds?
Do product pages appear cohesive, and include consistent visuals that are high quality for all items?
Have you offered helpful content for those not yet ready to purchase, to keep them engaged?
5. Focus on providing an amazing UX
Truly connecting with your customers comes down to having an acute sense of who they are, their pain points, and their preferences. By harnessing these insights, you can create a compelling site experience that accounts for every touch point in the customer journey.
For example, consider serving up region-specific content, or presenting a curated product bundle based on the browsing history of a user’s last site visit.
We worked on building a custom site experience for one of our clients, Dr. Barbara Sturm, to create a highly personalized feel on their site. The company sells luxury skincare products around the globe, and wanted to recreate the bespoke feel of their in-person clinics on the web.
To do this, we created a customized beauty ‘routine finder’, where site visitors could answer a series of questions to arrive at a personalized skin care regimen and a suite of recommended products. The quiz included questions like age, skin tone, lifestyle habits, and problem areas. After launching the skin quiz, the site saw a 4.2% conversion rate for those who used the routine finder, compared to a 1.6% average conversion rate for the rest of the site visitors who didn’t use the tool.
We see this principle play out again and again on our clients’ sites. Those who take the time to create amazing site experiences see both direct and indirect benefits for their brand.
6. Use SaaS platforms to minimize development costs
Another impact of an economic downtown is the cost of maintaining top talent. Skilled developers are key to any innovative digital commerce company looking to thrive in an uncertain environment.
As you work toward new site features, experiences, and experiments, you must keep your developers focused on high-impact activities. Not only is this cost-efficient, but it also keeps your team engaged and thinking critically about what activities will advance your business, rather than maintaining the status quo.
One way you can free up developer time is by choosing a SaaS platform that helps you perform automatic system maintenance and upgrades. This gives you the peace of mind that you’re operating with the most updated features and tech, and lets your developers focus on more revenue-generating innovative projects instead. There are many affordable, multi-tenant SaaS options available that easily integrate with other best-in-class technology to keep you agile as you grow.
As teams wind down this year and set sights on the one head, there are many strategies you can use to strengthen your competitive position and even grow during an economic downturn. From investing in a great CRM to automating system updates with a SaaS platform and performing foundational site fixes, these activities will drive both short-term results and provide long-term benefits.
If you’d like to learn more about how to create personalized site experiences and align your technology updates to your larger business strategy, reach out to someone on our team and we’d be happy to discuss your needs.