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7 tips to stay relevant as an online business with inflation
Since July of 2021 e-commerce inflation has continued, with prices online rising more every year, this information is provided by the Latest Adobe Digital Economy Index report.
Adobe's report says that prices were up 3.2% in July compared to 2020, which outpasses the 2.3% year-over-year increase in June. The report shows that it has been a dramatic reversal of a five-year pattern of annual price decreases which has increased prices online, causing supply chain shortages making price increases the new normal.
In the words of Adobe "Online inflation remains high and shows no signs of slowing down,” concluding its July report.
Covid 19 came with the rising of online stores which has made price tracking a more important factor to measure inflation, according to Adobe lead analyst, Vivek Pandya.
Regardless of bad news, the survivors are always the ones that are ready for tough times, so check out these 7 tips to stay relevant as an online business with inflation.
With inflation comes labour shortages and ballooning labour costs, which forces companies to determine what activities and labours are indispensable in the working force.
While having a full team of professionals specialized in each little task when hard times come sometimes the best solution is to shorten your process by taking out what is not necessary for your business. This doesn't mean firing a bunch of workers, no, in fact, there is a better way to optimize your workflow and this is...
Investing in technology
Investing in technology will help you with automated tasks that may be a bunch of workers are doing, and so, you are wasting money and resources on something that could be done by machines.
Just as it happens in the first industrial revolution, machines are coming to make our lives easier and more productive, so, in inflation times, and also to stay relevant, is a good idea to invest in machines and analytic tools that help your brand evaluate all your metrics and statistics automatically.
AI is coming with a bunch of innovations and nowadays machines are capable of doing things that only humans could. You have everything from chatbots to automated publications and software that help you identify what your target audience wants in just a few seconds.
Technology is evolving to make our lives easier, so, it will help you stay relevant and spend fewer resources on humans that could be doing something more significant for your business.
Differentiate between strategic and nonstrategic spending
In tough times businesses have to modify their long-term strategy, nevertheless, sometimes we make decisions that aren't aligned at all with our objectives and because of this we don't perceive the return on investment we expect. We can fix this by establishing the differences between what is a strategic and nonstrategic spend to protect our signature customer and employee experiences.
We can do this using consistent and accessible financials to prioritize higher ROI investments.
When you implement a sustainable cost management system it should sustain your business' strategy and enable your company to out-invest competitors on strategic costs.
Is the manager's task to identify where you could pull back on costs; the areas where you could lower costs without damaging the business process and where you should put a little more investment to get better results.
Inflation forces companies to evaluate where they should be investing more wisely and where they should cut costs without making damage to their company, in this way you stay stable and relevant for your customers.
Rethink your pricing strategies
Customers will pay what the market will bear, so if you want to keep up in this fight against inflation it's important to price your services fairly.
To do this wisely it's good to evaluate competitors and check how things are going for your industry taking an eye on any news that affects your business model.
If your prices are too high you are going to lose customers, instead, setting your price and then figuring out what you can do to optimize processes and lower costs through your operations will be better for your business.
Change from a global market to a hyper-local one
While all marketers want to conquer the world with their business and be the most successful all around, chances are that is better to be the best in a shorter location to then, after inflation apocalypse happens, conquer other regions and finally the world.
If you try to global this could get you far, but your connections won't be strong. Instead, when you go hyper-global you can deploy targeted global campaigns that react much quicker and are more cost-effective.
Try influencer marketing
Nowadays influencers are more relevant than ever, in fact, 92% of users trust a recommendation from these individuals.
When you ally with an influencer of your niche you can have for sure that their followers will likely believe in their recommendations - this is the main reason why they are called "influencers - and so this helps you to reach new markets and customers, while you are staying relevant with latest trends of social media.
Now, there is something we have to point out. There is a huge difference between a celebrity influencer, which tends to have over 1 million followers, and a macro or micro-influencer, which tends to have from 5K to 20K. What happens with the number of followers is that it will make their services more expensive, but, in this case, there is something that helps you to deal with inflation.
Now, you may think that your best option is to pick a celebrity influencer because they have more reach? Well, let us tell you that you are wrong.
Customers tend to engage more with influencers because they look like normal people, like a friend someone they could consider a social media friend. Now, the closeness is different from a 1 million follower influencer to the one who only has 10K, these are more relatable and spend more time interacting with followers.
Micro and macro-influencers have a deeper connexion with followers which makes them the best allies for your brand if you want to find customers.
If you are wondering how you can find the best influencer for your brand check this article where we give you a complete guide for this.
Revisit your investments
The idea is to invest to diversify your acquisition channels and don't rely just on paid. Proprietary acquisition channels will be even more significant for 2022, so, if your business only obtains customers through paid chances are that it will be harder for you to raise funding.
As an online business you have to know that retention is primordial for your business, so it is better to have the same loyal customers for your brand in these times of high prices than a bunch of new ones that could abandon your brand at any time. For this is a wonderful idea to invest in product, brand and Customers Resource manage to keep your customers up to any news from your brand.
When hard times come, we can do nothing but adapt to the new waves of the economy, however, as an online company, making use of these strategies will give you oxygen throughout the economic tidal wave that may be approaching.
Technology will be our best ally to be relevant and save on expenses, so it is essential to continue learning about all kinds of innovations that software specialists bring us.
We must plan our expenses well to achieve optimal management of our resources, and thus, we do not generate so much debt with high inflation.
At CodeDesign we continue to help you make the most of your online business, contact us to advise you on your process!