Over the last year, as the world adjusted to the pandemic, we have seen a dramatic shift in user preference from in-person to online shopping. Consumers have started relying more on the digital medium, and businesses were prompt to establish their digital presence.
As this behavioral shift continues to stick around for the foreseeable future, businesses need to align their growth strategies and business model to match pace with shifting customer needs, and more importantly, to stay ahead of the competition.
Taking a cue from the behavioral shifts of previous year’s data (where they dealt with a sudden change across several dimensions – category consumptions, shopper trip frequency, media consumption, etc.) will provide a reasonable basis for their upcoming plans to bank on.
Below are some aspects where businesses can formulate strategies out of their experience during the pandemic and remain profitable.
Revised products recommendations:
Studies estimate product recommendations to account for 26% of the revenue. But the catch here is to make the right recommendations that are in line with the current trends and make them as personalized as possible.
Retailers can analyze the products preferred (both essentials and non-essentials) over the most recent periods and incorporate the change in demand (using weighting function) for their all-time best-sellers to formulate recommendation strategies.
Retailers can segment their customers based on predefined parameters (price point of products, age, gender, location) to test out strategies working in their favor.
Listing Page Re-Arrangement:
80% of the visitors are known to bounce-off after the first three scrolls on a listing page. If the first few products seen by users are not in-line with their expectations, retaining them becomes impossible. This problem becomes even more pronounced with other players persistently innovating with their UX strategies and impressing the consumers.
Retailers can tackle this issue by segregating their user base depending on their origination source and work-around with the mix of products listed on a page.
Additionally, retailers can use metrics like trending score (revenue generated per impression) at the category/sub-category level to determine the preferred products in the current scenario and list them in the top spots to catch customer attention.
Dynamic/Competitive Pricing:
Pricing is the deal-breaker for customers. With lower prices, retailers compromise with the brand image, whereas with higher prices, they cannot achieve acquisitions or sales. Hence retailers need to identify optimal prices and strike a balance between customer satisfaction and the firm’s profit.
Retailers can establish a dynamic pricing model (using competitor pricing data and internal sales data) where prices change in response to real-time supply and demand. It helps stabilize the product price fluctuations and customer retention.
Product Switching strategy:
Research highlights that 30 to 40% of consumers have been trying out new brands/ products throughout the pandemic – some due to the unavailability of desired products, and some due to the inclination for cheaper alternatives.
Retailers can identify the specific switches (supplements) that happened within their product portfolio and promote them to attract new customers – to compensate for the other products which lost the share of sales.
Demand Forecasting:
The pandemic has rocked the retail world with unprecedented consumer demand surges alternating with no-demand periods. Many retailers have grappled with balancing the customer demand with supply-chain logistics in the last few months.
To accommodate the continued new normal business activity, retailers should account for the possible surges to recur alongside cyclical forecasting and promotional analytics while planning for the upcoming seasons.
They should also strategize to avoid out-of-stocks by differentiating actual sale declines from decreased sales due to unavailability.
Re-allocation of Advertising Budgets:
The landscape of social media and advertising has changed tremendously in the new normal situation. Marketers have many more channels/modes available (IGTV, Instagram Store, Stories, Nano- and Micro-Influencers) to interact with all/any types of customers.
Retailers should identify the channels that helped them engage customers effectively in the past few months and re-allocate their budgets accordingly to maximize their ROI. They should also not shy away from exploring the new modes which both customers and competitors are preferring.
How can Halo Help Businesses in Formulating Growth Strategies?
Halo allows businesses to leverage data and generate valuable insights (as below) that they can use to alter existing strategies to suit prevailing situations:
- Tracks hot and cold products – helps in optimizing the product portfolio performance and capitalizing on selling opportunities
- Provides information on seasonal trends and emerging buying patterns – helps in managing inventory and selling smartly
- Measures the effectiveness of marketing efforts – helps in tracking performance, identifying opportunities, and driving profitable growth
Conclusion:
E-commerce has been evolving tremendously for the past decade. Additionally, pandemic has accelerated the shift and impacted both businesses & consumers in a significant way. It is more important now than ever for E-retailers to reinvent themselves and formulate growth strategies to match the ever-changing customer behavior and stay on top of the competition. But planning a long-term strategy is not a wise choice reckoning the volatility of the present situation. Hence, businesses should keep evolving their plan of action from time to time based on the insights from consumer purchases and ad campaign results over the course of the pandemic as past performances pave the way for the future.
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