The current pandemic has caught the world off guard. It has made us realize how alarmingly unprepared we are when a paradigm-shifting pandemic, of COVID-19 nature, strikes the world. The minuscule virus not only turned the global economy upside down but also the healthcare sector of many countries.
In fact, most of the businesses were forced to go online, overnight, independent of their online experience. This was to ensure that the health and safety of their employees and their families weren’t compromised.
On the other hand, retailers with no online options in place, like clothing stores, saw sales fall by more than 50 percent.
Now, we are almost into the sixth month of the pandemic, and one of the sectors that seem to be showing significant growth, despite the health crises, are the brands with an ecommerce-first approach.
Brands with the ecommerce-first strategy are doing great businesses, thanks to the customer data accumulated over the years, which they are currently leveraging to connect with the customers.
Target, for instance, saw its online sales rise by a whopping 275 percent since April – the quarter is being considered as its best since 2000, despite its in-store purchases declining.
It’s being claimed that even after the pandemic settles, the growth of the ecommerce sector may continue as customers may still find it easier to shop online.
According to Kantar Group’s research, six of the ten consumers would still prefer to buy online post-pandemic. And not just essential goods, all ecommerce categories most likely would witness a significant jump demand.
By the way, such a change in consumer buying behavior was supposed to happen in three to four years. However, according to experts, the corona crises have accelerated this buying trend.
Now, let’s dive right in to find out strategies that will keep your ecommerce business up and running irrespective of the panic situation this pandemic spreads.
#1. Flexible pricing of products
In the wake of COVID-19, some ecommerce companies are experiencing an explosive demand for their products. And these companies are those that are into offering critical products and services such as medical supplies, shipping, and cleaning.
Also, there’s a massive demand for toilet paper, canned food, home entertainment, video conferencing, audio, and headsets. That said, the high demand for certain products has prompted price-gouging.
According to the Mckinsey report, many states in the U.S. have reported several hundred cases of price-gouging in the days that followed lockdown, prompting the U.S. government to undertake a probe against the culprits.
The report further states that the current crises shouldn’t be manipulated by businesses to generate outsized profits as perceptions of price gouging could lead to severe reputational and legal consequences.
Solution
Remember, raising the prices of essential goods or services wouldn’t bode well with the customers, especially in a crisis like the one we are witnessing. So, the best bet is to set an optimal price for essential products or stick to your pre-pandemic costs.
The optimal amount is the price, which would help you sell them at a possible profit. For this, you’ll first have to identify competitors’ prices, market demand, and perceived value of the product.
A pricing software would help you accumulate this info and the competitor data and market analysis, which would help you strategically price your products.
That said, flexible pricing for products doesn’t mean offering products at the lowest price possible.
Sure, the idea of flexible pricing is to ensure sales, and it’s easier to make sales by selling products at the lowest price. However, your goal should be to find a price at which consumer purchasing friction is low, and the profit margin is fair enough.
#2. Build crises-proof inventory management through automation
With COVID-19 disrupting supply chains, inventory shortages have become the new normal. Businesses, specifically the ecommerce ones, have to be super conscious about their inventory needs more than ever.
According to Digitalcommerce 360 report, of the 107 retailers interviewed, 30% are facing inventory shortages.
In fact, as per the report, unavailable inventory is cited to be amongst the top three reasons that are making online shopping more difficult. Other two being, slow websites and no free shipping options.
Ecommerce businesses, on the other hand, need to be always on guard to know which products were ordered verses which got delivered, which could be replenished faster versus what could take time, which products are in excess demand versus those with zero demand.
Solution
Inventory management software is the bedrock of success for modern ecommerce businesses. Unlike traditional inventory management that’s prone to errors, the software could profoundly alter how an inventory is managed.
Benefits of using inventory management software for your ecommerce business:
- Most of the inventory software will automatically upload your products onto your website, Amazon, and eBay.
- Automates order fulfillment and inventory quantity updating. Just enter your inventory quantity once; it then gets automatically updated on all your sales channels.
- It helps you track items that are in shortage so that you could immediately reorder them.
- It helps diversify the supply chain by importing multiplier supplier catalogs and price comparisons to determine the best materials available at the best cost
While you are looking for inventory management software, you need to opt for one that’s specifically designed for ecommerce.
This is important because while Googling for inventory software, you may find an umpteen of them; however, most of them are meant for physical stores. So, nail down the ones that could exclusively be used for your ecommerce store.
Leveraging perpetual inventory management software for inventory accounting is ideal for ecommerce sites. It will keep you up to speed about the sale and purchases of goods and items.
The system keeps track of the real-time movement of inventory and also other additional aspects such as Cost of Goods Sold, Cost of Inventory Purchases, and Cost of Ending Inventory to help you keep a tab on the financial aspects of inventory management systems.
Further, ensure to diversify supply chain network too. A diversified supply chain will ensure that you will never run out of stock; plus, it would help in price comparisons. Through price comparisons you’ll be source products at best rates.
#3. Customize ecommerce security experience for every customer
As it turns out, ecommerce stores are known to offer a one-to-one experience to customers, be it in terms of web content, offers, pricing, promotions, among many others.
The services are provided based on customer preferences and their buying history. That said, they now need to broaden their personalized offering by including account control and security.
Be it a loyal customer or a new customer, ecommerce stores need to ensure that every customer passes through the same authentication steps with no exceptions.
Also, by customizing security experience for each customer, instead of the conventional one-size-fits-all account verification, customers will be able to build more trust in brands.
To this point, the stores will have to put in place a micro-segmentation-based strategy. In other words, online stores will need to have data about the user type, device specifics, geolocation, IP risk, and more, if it has to offer customized account control and security to its customers.
Solution
Employing AI and Machine Learning algorithms could help in this case. For instance, systems such as Kount Control customize every customer experience by identifying and segmenting users based on their characteristic features.
However, the noteworthy part of this system is that it helps identify returning customers even though they may have logged in from a new location or device.
Kount also helps discover and stop credential attacks, and even improve user’s login and purchase experiences. The best part of the system is that it helps identify potentially risky IP addresses and forward them to the Security operations.
Not to mention, they also identify potential users that are under attack and are helped out through customer outreach.