ast year proved to be a much more challenging year for the e-commerce industry than 2021, with the economic recession, inflation and political uncertainty influencing slower growth in many industries and more cautious shopping behaviour.
Despite the crisis, the market has not come to a standstill and industry experts have to ask themselves: how do we retain customers in these difficult times? In this article, we will discuss some effective techniques to increase sales.
3 strategies 8 ways to retain customers during the crisis
Strategy: E-commerce good for the crisis
It is natural for sales to decline in the face of a consumer financial downturn, but some channels are more resilient to change than others. As the report by the Chamber of Electronic Commerce showed, the crisis has caused 71% of those surveyed to take measures to optimise their spending. 58% of those surveyed have decided to move a significant part of their shopping to the Internet, and 79% of online shoppers consider e-purchasing to be the most attractive, rational and optimal. Moreover, 31% of customers intend to buy everything possible online.
64% of consumers believe that when buying online, it is easier to compare offers, think more about the purchase and make more rational choices. 72% appreciate in online shopping better control of their costs thanks to the available purchase and spending history. The data thus clearly show that, despite the general recessionary trend, e-commerce remains an attractive distribution channel for customers and is key to maintaining sales. (Report: In crisis to e-commerce, Chamber of Electronic Commerce, 2022)
→ Improving UX
96% of e-customers know exactly why they buy from e-commerce and, on average, indicate more than 2 digital shopping perks that determine this. (eCommerce Report, 2023). One of the leading assets is invariably price. In recent years, consumer reviews have also become increasingly important, helping to verify the quality of the offer and good substitutes at a lower price. Promotions, available forms of payment, fast delivery, free returns and delivery to pick-up points are also playing an increasingly important role (e-Izba Report: A decade of Polish e-commerce, 2013-2023). Despite the growing interest in e-commerce, 50% of consumers leave online shops due to illegible website navigation (Accenture, 2018).
→ Subscription model
During the pandemic, the subscription model has grown in popularity. In this model, customers are guaranteed delivery of regularly used products at a favourable price, while retailers can more easily anticipate demand and more accurately plan production and distribution. 47% of Polish customers choose to subscribe because of the financial benefits in the form of attractive product prices and order conditions, e.g. free delivery on purchase or product return. Another argument is convenience (35%) and access to a premium offer (27%). 59% of Poles started to spend more on a particular service or product after purchasing a subscription (Deloitte, 2022). 80% of people intend to keep the subscriptions they bought during the pandemic (McKinsey, 2021).
Promo-hunting means fishing for shopping bargains, usually created around the communication of a favourable price. Already two-thirds of the respondents believe that the prices offered online are more attractive than those offered in stationary shops. Respondents also point to other arguments in favour of e-commerce: more frequent (34%) and more attractive (24%) promotions, promotions for purchases with conditions (25%), easier comparison of offers (32%), greater choice of brands (32%) and products (27%). E-stores have a huge scope here to use the crisis consumer needs and behaviour as their opportunity. (Report: In crisis to e-commerce, Chamber of Electronic Commerce, 2022)
The cross-selling strategy is based on offering customers additional products that can gain their interest. Cross-selling in an e-commerce company increases sales by 20% and profits by up to 30% (McKinsey & Company, 2020). Offering promotional and outlet products as part of the cross-selling mechanism fits perfectly with the needs of bargain hunters.
In order to suggest the best possible products, market leaders are introducing advanced learning algorithms as a basis for recommendations based on customer behaviour in e-commerce. For example, Zalando's Fashion Assistant suggests specific colour and style combinations among its 1.8 million assortments, while Wyborcza.pl's 'selling' content algorithms segment Wyborcza's readers into approximately 100 different groups using 20 mathematical models.
→ Promoting a larger shopping basket
In Poland, from January to December in 2022, the average value of the shopping basket in the 13 largest retail chains in Poland increased by approximately PLN 30, or 12.5% (Report, ASM Sales Force Agency, 2022). Customers, faced with rising prices, are getting used to spending more and more, but at the same time they are looking for the best deals. The higher value of the shopping basket is, of course, desirable for retailers, so it is worth exploiting this mechanism for mutual benefit - to show customers that larger purchases simply pay off.
Example of a mechanism to increase the value of a sales basket (company Badabak.co.uk):
0.2 kg - PLN 15.10 (PLN 75.50 / 1 kg)
0.5 kg - PLN 34.79 (PLN 69.58 / 1 kg)
1 kg - PLN 63.90 (PLN 63.90 / 1 kg)
5 kg - PLN 303.00 (PLN 60.60 / 1 kg)
Strategy: Low-risk purchases - with easy returns and deferred payments
One of the main reasons for the increase in popularity of e-commerce, is the possibility of free and hassle-free product returns and the option of deferred payments (19% and 21% of indications). Others are: low delivery costs, long return period and low prices. 71% of respondents appreciate the possibility to return without giving a reason, which reduces the risk of e-commerce purchases. (Report: In crisis to e-commerce, Chamber of Electronic Commerce, 2022)
→ Friendly return and complaints policy
At a time when Poles are spending their money more carefully, they need reassurance from e-commerce that if they make a purchase that does not meet their requirements, they will be able to send the products back easily and the money spent will come back to them safely.
According to InPost, up to 40% of shoppers expect a convenient option to return goods (Rzeczpospolita, 2022). 52% of online shoppers declare that the form of return most encouraging for online shopping is the possibility to send the product back free of charge by courier (door-to-door), and 45% of respondents indicate the possibility of shipping by parcel machine (Gemius, 2020).
→ Deferred payment methods (BNLP - Buy Now - Pay Later)
Buy-now-pay-now payments are becoming increasingly important. They make it possible to buy products in stock or take advantage of attractive promotions without straining a fixed budget. BNPL was used by 38% of online shoppers last year, including 42% of those making transactions via mobile devices (Report: 'Omnicommerce. I Buy Conveniently, Chamber of the Electronic Economy, 2022).
Currently, the largest operators of fast electronic payments: PayU, tPay and Blue Media provide a form of deferred payment. The largest marketplaces such as Allegro and Zalando are also implementing a similar service. The target customer for this payment method is mainly consumers from generation Z (21-25) and Millenials (26-40).
Strategy: Tightening the belt - or shopping thriftily
Poles are making increasingly thoughtful purchases. 78% of consumers have decided to transfer at least part of their shopping to e-commerce due to the worsening economic and financial situation. They check products online and compare promotions in 2-3 places (23%). 57% of consumers are of the opinion that in times of crisis it is best to buy cheaper products and 59% are in favour of a belt-tightening strategy, i.e. postponing all unnecessary spending. (Report: In crisis to e-commerce, Chamber of Electronic Commerce, 2022)
→ Marketplace sales
In times of crisis, when there are fewer customers in your own e-commerce implementation and the value of the shopping basket often becomes more modest, a presence on a marketplace offers new opportunities. It enables you to quickly establish yourself in a new market and reach a huge market of potential customers with a relatively low investment.
In 2022, as many as two-thirds of consumers buying online regularly used sales platforms. The most popular in order were: Allegro, OLX, Zalando, Amazon and Aliexpress. Domestic Empik is also growing in strength (Report: E-Commerce in Poland, Gemius 2022).
→ Cross Border , or online international sales
As with the marketplace, cross-border is the perfect solution for times of crisis and belt-tightening strategies. In return for a margin, it allows you to develop new sales channels and reach new markets, which is important when fewer products are entering the cart and shop performance indicators are falling.
A way out of the crisis with a shield
The crisis in our market has settled in for good and is not letting up for the time being. And Poles are looking more pessimistically into the future. Only 16% of Polish respondents assess the situation of their household as good or very good. A change for the better in the near future is expected by 12%, while as many as 36% of Poles expect a change for the worse (In crisis to e-commerce, Chamber of Electronic Commerce, 2022). As it turns out, Poles do not have savings, and if they do, their level most often does not reach PLN 10,000.
However, despite worrying market forecasts, thanks to the fact that Poles have opened up to online shopping en masse during the pandemic, the crisis is handling e-commerce more gently than other industries. Currently, despite the difficult economic situation, one in four companies expects a significant increase in the share of revenue generated by e-commerce within 12 months (e-Izba Report, 2022). Success here depends on understanding the current needs of the consumer, who has gone through a lot in the last few years and values, above all, a sense of security, comfort and time.