Political friction, inflation, and layoffs influence the e-commerce sector. Entrepreneurs don’t always know how to approach supply chain challenges and often figure it out too late. Speaking at the Insaka virtual e-commerce summit, Shopify’s partner growth manager, Neha Revankar, briefly explains how business owners can make changes to benefit their finances.
Politics impact e-commerce
The e-commerce industry anticipated some form of stabilization in the supply chain industry in 2023, four years after the COVID-19 pandemic. Shopify says raging wars have had a crucial impact on supply chain disruptions. More recently, there is the Read Sea and Israel-Gaza conflict. The impact on businesses varies, notices Revankar. “The brands still need to recognize the vulnerability of their supply chain and prepare for uncertainty, especially as 60% of global consumers expect same or two-day delivery.”
Shopify warns brands to be “quick on their feet” to rethink supply chain processes to ensure stability. “Even if it is at a higher cost, we have seen brands working on holding higher inventory to ensure a steady supply,” says Revankar. Companies are also now working with multiple sources to produce the product. Basically, ensure they don’t keep all their eggs in one basket.
Price strategy is essential now
With little money to spend and increasing living costs, brands focus on their price strategies to keep customers and attract more. Shofify says that with inflation at an all-time high, 81% of brands it spoke to indicated that they plan to increase their prices or have already done so.
“Price strategy is critical. Some brands are changing prices weekly if not daily, keeping ahead of inflation,” says Revankar. But not everyone sees it this way. There are other brands who are trying out the opposite. “[Some are trying out] price freezing. Price freezes are a long-term investment in customer loyalty, but not every brand is in a position to absorb the cost.”
But what about the things business owners can control? You can manage your shipping costs or offer free shipping options. There are other options to explore, like local pick-up and delivery. “This leads shoppers to order more often, more expensive items and up their average order value discounts,” suggests Revankar.
Social selling is changing e-commerce
Being authentic and personal on social media is more important than ever. According to Shopify, user-generated content is 8.7 times more impactful than influencer content. “Reviews, posts, videos, blog posts, comments, shares, and likes are seen as three times more authentic than brand-created content. And almost six times more authentic than official influencer content,” says Revankar.
She believes in getting ahead of the trend; brands put their customers at the center of loyalty programs. Although it’s not very popular yet, Shopify anticipates it to be extremely popular over the next few years.
Revankar says by the end of 2023, one in every five retail sales will be made online. “Social selling is changing the buying pattern.” Using artificial intelligence to enhance a better social shopping experience is also increasing.
“Turning to a chatbox is one of the ways to appease 41% of the consumers who want to live chat while shopping online,” says Revankar. She believes that if you want more lifetime value from your customers, you have to start thinking of incentivizing them to buy in on brands, not just the product.
About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand. Do you have a story you would like her to expose, report on, or consider? Please send your request to Newsdesk@locate2u.com.
