The Changing Face of Retail: Taking the Pulse of ECommerce

The recent news that online retailer made.com has gone into administration has sent shockwaves through the online retail world with its rapid decline.⁽¹⁾ From the highs of lockdown, when the company made profits of £315 million, to the company floating on the London Stock Exchange at a valuation of £775 million, things rapidly went south for the internet furniture store. As panic increased, even ventures into physical flagship stores failed to turn the made.com ship around. While questions absolutely need to be asked of the business and how it was being run, is this a bigger harbinger of doom for online retailing?

Possibly not. Analysts at Global Data see it as more of a perfect storm than a death knell for eCommerce: Made.com was faced with the challenge of online shoppers returning to the high street (link to article on high street shopping), while they had simultaneously overspent on inventory because of supply chain issues (link to previous article) and were spending highly on poorly targeted marketing, with limited return on their investments.

So, while made.com is certainly a cautionary tale, it doesn’t signify a capitulation in online shopping. With that in mind, what should eCommerce businesses be doing to ensure that they thrive in these challenging economic times?

All retailers are feeling the squeeze

This year, we’re seeing Black Friday promotions advertised from the start of November, and many big-name retailers launches their Christmas advertising earlier than usual. These moves are driven by the fact that many consumers are planning to take advantage of sale events such as Black Friday and Cyber Monday for their gift buying this year. While new reports suggest that Black Friday spending may be as low as half of what was seen in 2021,⁽²⁾ consumers are spending what they do have online and are still planning to take advantage of the deals available to them, creating opportunities for eCommerce retailers.

For eCommerce, there is still uptick

In fact, while revenues may be on a downward trajectory across retail, the trend for online spending is positive, with people branching out from being dependent on search engines (named by 31% in a recent survey as their online shopping tool of choice) as their primary online shopping channel. Instead, consumers are venturing into online marketplaces (capturing 34% of shopper’s attention) and over 54% are planning to continue to shop via social media channels, in the hunt for better deals.⁽³⁾

While the post-pandemic spending highs of 2021 appear to have been the peak of spending across both physical and online retail, analysts suggest that online spending is still up by 19.6% from 2020, despite falling as a whole.⁽⁴⁾ With so much uncertainty in the world right now, this can only be seen as a good thing, particularly for those in eCommerce.

Ten ways to optimise your eCommerce sales between now and Christmas:

1. Make sure you’re advertising! If people don’t know about your offers, you’re going to get lost amongst the noise.
2. Start now and end a little later. This isn’t the year to rely on full-price Christmas sales. Make the most of the early bargain hunters to capitalise on the opportunity.
3. Use social media to promote deals – also don’t forget SMS as a tool to reach out to customers. Just ensure that you’re communicating something worthwhile.
4. Make buying as simple as possible for your customers. Be easily contactable. Most website-building tools now offer things like chat functions and even chatbots that can handle basic enquiries on your behalf.
5. Offer different payment options. Affordable monthly payments, though tools such as Klarna and PayPal Credit can help people spread the cost and ensure that Apple pay and Google pay are also enabled, to make transactions as simple as possible. If you sell internationally, make sure you’re primed to accept popular local payment methods too.
6. Ensure your website is mobile-friendly. Not many of us even use desktop computers any more. It’s easy to check if your website is mobile-friendly – most website building platforms include a ‘mobile view’ editing function that you can use to ensure that your web page looks as good on a handset as it does on a big screen.
7. Be smart with your pricing. Make sure you’re offering limited time deals that shoppers can’t say no to. The run up to Christmas (and the January sales) will be highly competitive with deep discounts, so don’t be left behind.
8. Check your inventory can meet demand and use the sales period and Christmas to divest yourself of any excess stock, to free up capital and boost turnover.
9. If you have a shopfront, use it. People love the community element of in-person Christmas shopping, so any bricks and mortar revenue opportunities you have should be capitalised on.
10. Appeal to your audience Your customers are the face of your brand. Online users more so than physical customers, will much more readily give their opinions and general feedback, listen to them and support their requirements

References:

1.Made.com In Administration, Next Buys Brand and Website 
2.Made.com prepares to meet its maker: Online furniture retailer is on the brink of a spectacular collapse, says GlobalData
3.Shoppers spent more online but reined in spending across channels in September: ONS - Internet Retailing 4.PEAK 2022 Black Friday spending set to halve – with online and Amazon set to benefit from those that do spend, study suggests - Internet Retailing