In the entrepreneurial world, recessions are commonly described as a “reshuffling.”
Money — and whole markets — moves faster than usual. Businesses go under. New ones are born. Some teams contract. Others expand. All of it happens so fast. Impacted by COVID-19, over 100,000 businesses closed their doors for good in the first few months of 2020.
Every person running a business wants to answer the same question: How do I steer my business through this giant reshuffling so our brand comes out stronger on the other side?
In this article, we’ll cover how to recession-proof your eCommerce business.
1. Diversify your marketing
One of the best ways to recession-proof your eCommerce business is to have multiple marketing channels. When a recession hits and the economy is going down, one or two of your normal channels will not perform at its pre-recession level.
At the beginning of COVID-19, we saw this occur in paid acquisition. Advertising started underperforming drastically.
Some of the hardest-hit companies were the ones that over-relied on paid acquisition. The alternative is to diversify your marketing efforts.
How effective is your email? Is your website optimized for search? How effective are your brand ambassadors and affiliates? Do you have strong direct traffic generated from the fame of your brand?
Find new ways to diversify your marketing.
2. Use a modular tech stack
The more modular you can be with your tech stack, the easier it is to reduce costs when the economy decreases.
Modular tech stacks can be scaled up or down depending on your need. They are agile, allowing you to work lean when you need to cut back, and to move quickly ahead when you’re ready for growth.
When the pandemic hit, companies with modular, scalable tech stacks were able to quickly pivot from growth mode to operations mode.
3. Pivot your marketing to meet the changing needs
We made an observation at the beginning of the pandemic. For many eCommerce companies the faster they moved to refocus their website and update their product line to be tailored toward the global and economic shifts, the faster their situation improved.
Health companies that had products that boost immunity could choose to emphasize these product lines on their website. Fast-thinking fashion brands pivoted their marketing to emphasize sweatpants when remote working began to trend.
In other words, things move very quickly during an economic crisis. It pays to make sure your copy and even your products are relevant to the times.
I hope you found this article helpful. Facing an economic crisis is never easy. But learning how to recession-proof your eCommerce business can set you and your team up to potentially come out stronger on the other side.
- Nirav is the CEO and founder of Anatta. Nirav received his engineering degree in 2006 from George Washington University. Prior to Anatta, he served as founder of Dharmaboost, a software company working with Cisco Systems, Hewlett Packard, and New Leaf Paper. He is also cofounder of Upscribe, a next-level subscription software for fast growing eCommerce brands.