E-traders, 10 tips for adapting to the economic crisis

According to Prestashop*, France's leading CMS (Soledis is Prestashop Expert***), 70% of e-tailers are affected by the economic crisis. What are the signs of this economic crisis on the web, and what can be done to limit the damage?

"The end of abundance and carefree living" on the web

After two years of pandemic-driven euphoria, market giants scale back ambitions

Apple had to close factories in China because of Covid-19, and its production is impacted by the shortage of Silicone. Sales at Intel, the US semiconductor giant, fell by 22%. Shopify laid off 10% of its staff. Netflix lost 1 million subscribers between the end of March and the end of June 2022. Ad revenues at Google, Meta, Snap and Twitter are hit by advertiser budget cuts. To be very concrete: Meta saw its quarterly sales fall for the first time in its history, and Google recorded the lowest annual revenue growth rate since the (temporary) collapse in July 2020, at the start of the pandemic.**

These are no longer weak signals, but a real slowdown in the growth of the web sector.

Prestashop has also made this observation among its e-merchants in all sectors*.

For the first half of 2022, e-tailers are also feeling the wind shift. Prestashop has analyzed the results of Prestashop merchant sites with more than one million VBM*. After a particularly successful 2021 (a 9% increase in sales), it would seem that the effects of the Covid-19 crisis (not over), the war in Ukraine, the energy crisis and global warming are beginning to be felt on the web. 46% of e-tailers are recording a drop in their conversion rate, and 42% of them a loss of customers.

On the one hand, orders are slowing down due to inflation and the resulting loss in customer purchasing power. And on the other, costs are rising due to inflation (for 62% of the French sites in the Prestashop study) and the difficulty of sourcing raw materials (for 58% of them).

The resilience of French e-tailers

Many e-merchants have already begun to make changes to limit their decline in activity and loss of sales, but also to contribute to a more virtuous, less energy-intensive e-commerce sector. Here are 10 best practices to ponder if you're an e-merchant yourself.

1. Passing on higher costs to the end consumer

According to the Prestashop* study, this is already the choice made by 41% of e-tailers. It can also be a strategy for redirecting sales to high-potential activities.

2. Control expenses to boost profitability

According to the Prestashop* survey, 34% of e-tailers have made this choice. Now let's take a closer look at the levers of action that can be used to more or less discreetly involve the end consumer in this inflation, or to switch to less risky, more controlled management?

3. Review your delivery costs

Have you reviewed your pricing structure in light of the rising costs of your carriers? Prestashop has noted a real surge in transport costs (+4.9% for DHL, +2.8% for UPS, +3% for Colissimo) and considers an increase in delivery charges "unavoidable". This is Amazon's position.

4. Charge for product returns

Boohoo, Uniqlo and Zara chose to charge for their returns, betting that the entire e-commerce market would follow. Will you be taking part in this revolution? It's a risky gamble, and the rates applied are symbolic compared to the real cost of processing these returns. If you do choose this option, make sure you measure its impact in terms of customer satisfaction and number of sales, so you can take stock in a few months' time.

5. Limit product returns

It may be wiser to try to reduce the gap between the customer's expectations and the reality of the product:

• Improve your product description by paying close attention to keywords and contextualization. Writing your product descriptions is a key step in optimizing your e-commerce site. Our copywriting packs can help you do just that (here).
• Enrich your database with photos, videos, 3D images, contextual settings... Soledis has developed a Prestashop module to integrate 3D images into your product sheets (here)
• Advise on sizing, going into the details of measurements to avoid sizing errors.

This will not only save you money, but also lower your carbon footprint!

6. Optimize web marketing costs

This isn't necessarily the time to cut back on the things that help you make sales - just make sure you stay competitive. On the other hand, it is time to delve into the details of your partner agency's reports. Some of your Google AdWords or Retargeting campaigns certainly deserve to be abandoned in favor of more profitable ones.

7. Optimize emailing costs

Here too, it's an opportunity to reduce your carbon footprint. Did you know that each e-mail sent costs 4g of Co2-e? I'll let you do the math by multiplying by the number of e-mails you send per month...

Most of these newsletters don't get opened, do they? So restrict your follow-up scenarios to contacts who have opened your emails, who are already customers of yours, or who are qualified as having strong purchasing intentions.

Acquiring new customers is more expensive than retaining existing ones, so perhaps it shouldn't be your priority. Instead, work on your existing customer base.

8. Reinforce your guarantees to encourage trust-buying.

In times of crisis, consumers are looking for reassurance. If they already know you, you'll start out with a capital of trust that's sure to make the difference between you and some of your competitors. For other customers, don't hesitate to minimize the risk of error by emphasizing your guarantees. The most sought-after at the moment are: made in France, eco-design, guaranteed for so many years, various and varied labels, but also customer reviews, press coverage or blogs...

9. Focus on the 20% of products that make up the bulk of your sales and margins

Improve product pages, create additional content (video, blog posts, media campaigns, micro-blogging, etc.), cross-promote, encourage cross-selling on parent products, etc. some of our modules can help you

10. Get a detailed analysis of your data for targeted actions

By looking at the gap between the products most consulted on your website and the products purchased, you can identify interesting opportunities for progress. Some of your products are interesting but don't convert! Review your product sheets and note the progression of sales on your dashboards.

Whether this economic crisis is anecdotal for your e-business, helps you accelerate certain transformations, or represents a real upheaval, you can count on us to support you with the same ROI logic in each of our recommendations.