The ongoing recession has everyone in a state of uncomfortable uncertainty. The weak economy has consumers and merchants worried alike. But this very uncertainty represents an opportunity for smart merchants who can position themselves as precisely the TRUSTED, value-conscious, and low-hassle sellers that shoppers seek out during a downturn.
While it is true that qualms about the economy cause some e-consumers to cut back on their online shopping, a recent survey also indicates that other consumers plan to shop more online because of the convenience and greater chances of finding good deals, of course, to save money on gas (see a recent survey of 200 consumers by investment firm Piper Jaffray). So the question is NOT what the macro-trend is, but rather how the smart merchant benefits from this share-shift.
According to this survey, while 33% of online shoppers plan to reduce online spending on discretionary goods, 12% expect to spend more and 55% foresee no change. High-ticket luxury items are most likely to be affected by the decision to delay purchase.
Clearly, tactics for addressing the consumer also change. For example, 67% of consumers polled by ICOM Information and Communications in another recent survey say that they increase coupon use in a weakened economy. 58% of these consumers favor electronic coupons delivered to loyalty cards online.
The U.S. government’s plan to send tax rebates to many consumers this spring has the ability to provide retailers a boost. But while Tax Rebates will inject a wave of expendable cash into the economy, two factors will influence the opportunity this creates for online sellers in the next two quarters: 1 - More emphasis on value and safety, and 2 - Easier access to discounts and coupons. Here’s how:
Both factors have directly to do with the increased importance of ‘value for money’ for every cent that the consumers spend. Both also increase the likelihood of more consumers turning to the Internet to make way through cuts in their personal expenses. We already know that starting with the price of gas, shopping online is just less expensive than driving to a store. Moreover, depending on how and where you shop, it’s easier to find tax savings, coupons and shipping deals online, because there are more and more narrowed down comparison and specialty stores on the Internet than there were a few years ago. This growth, from brick-and-mortar establishments into a host of niche stores that exist only online, definitely contributes to an exciting scenario for the online retailer. And combined with individual sellers on online marketplaces like Craig’s List, eBay (and now Facebook), these all add up to a plethora of choices for the price-sensitive consumer.
Along with the opportunity this brings though, there are certain challenges to be faced by the online merchant. The smart ones are going to take up these challenges and employ them to make the most of the ‘boom’ that recession can bring them.
- Firstly, as the competition grows, it is imperative to play on quality not price. There is only a limit to the consumers who buy solely on price. Broken promises are unforgivable in the choice-plenty world of online shopping. Especially with the kind of influence feedback ratings, blogs and chat rooms carry, anyone who finds fault with your product can easily find an eager audience to complain to. Bad word of mouth travels fast.
- Secondly, show your buyers that they are protected and won’t get ripped off if they deal with you! And there’s no better way to do this than to give the solid assurance of a bond. Protection Seals, bonding, safety from identity theft – show consumers that you care for their safety and that you have taken the extra steps to guarantee their safety. If you don’t take those steps, I assure you that your competitors will!
There are clear signs of a burst of growth in the online economy as shoppers turn to the Internet to better manage their shrinking budgets. It is now up to the smart online retailer to take full advantage of that!
Today’s buySAFE blog was contributed by Madiha Qureshi, who is a part of our Marketing and Communications Team.
We at buySAFE are excited about the upcoming eCommerce Summit in New Orleans starting April 22. If you are undecided about attending, ask any past attendee, or better yet, ask us! For anyone with a stake in ecommerce, this is one networking and business opportunity that is reliably interesting, important, and productive…and a lot of fun.