How will the cost-of-living crisis affect ecommerce?

09 November, 2022


The cost of living crisis couldn’t come at a worse time. The after effects of coronavirus are still being felt for many and just when you think there might be some sunshine on the horizon, another something out of your control threatens to reduce your sales and make running your business a bit tougher. 

While in some areas coronavirus did make online sales increase, much of this was simply because people couldn’t shop in a traditional manner, but with energy prices rising and increasing the cost of almost everything, this is a different ball game.

So, will the cost-of-living crisis affect ecommerce, and how can you counteract its impact?

First of all, how exactly is the cost-of-living crisis affecting ecommerce? Well, depending on who you talk to, it might not be as bad as you think.

An annual Direct to Consumer report by Consumer research platform, Attest, suggests that a quarter (25%) of the shoppers they spoke to have spent less money online in the last six month.

However, that report was back in July. A more recent report by the ecommerce payment and marketing company Digital River found in August that in the UK, 33% of respondents have shopped online more frequently in the past six months, and 22% are expecting to shop online more frequently in future.

They also found that while 58% of UK adults have reduced their spending on non-essential items in the last six months, 47% continue to make at least one online transaction a week.

In fact, only 8% of respondents said that they were looking to shop more in-person.

So, at the moment, it seems like ecommerce is still maintaining a strong position in people’s shopping habits when compared to bricks and mortar stores.

That doesn’t mean you can rest on your laurels though, and as is the case in any business scenario, you must never be complacent.

Reporting on Digital River’s findings, Enterprise Times highlighted how 41% of online shoppers would cut online shopping if they needed to reduce their spending.

So what can online retailers do to help prevent people from shopping elsewhere?

Thankfully Digital River has asked that question for us and found:

  • Half of UK online shoppers say they want more help from retailers to deal with rising prices
  • 32% highlight delivery pricing as a barrier to online shopping, with 48% saying free or cheaper delivery would offer the most help with the cost of living
  • An increase in online vouchers would be a big factor for 38% of respondents and
  • The ability to see easier price comparison would encourage 31% of respondents to continue shopping online or more

In a statement, Ted Rogers, Chief Revenue Officer at Digital River, said that while their research “has shown the pace of online spending isn’t expected to slow down despite the squeeze on finances,” online retailers must not take things for granted.

He said: “Brands must ensure they have optimised their digital stores to make the shopping journey as transparent and friction-free as possible. This will ensure consumers are not surprised by any extra costs.”

Top tips to combat the cost-of-living crisis

As already highlighted by Digital River there are a number of clues in their research that you could use to give keep your sales flowing and maybe even entice your customers to use you more.

The free independent online news publication,, has taken these ideas and made some excellent suggestions.

Don’t sacrifice excellent fulfilment

While shoppers might be on a tight budget, they’ll still expect fast and efficient delivery, especially if they have had to think twice before purchasing the item.

As we’ve already written about, getting a customer’s orders to them fast and safe is the highest priority.

SoundCloud back this up. They found around two-thirds of UK consumers (65%) said they wouldn’t order from a marketplace if they didn’t offer a convenient delivery option.

Whoever you’re using at the moment, do feel free to drop us a line to see if we can help cut your costs and make the fulfilment experience for you and your customers even more attractive.

Keep on talking

Making sure your customers are fully aware of what’s happening is key to maintaining consumer-brand relationships during the cost-of-living crisis.

This means keeping them up to day with when their orders have been shipped or offering helpful product information and price drops on their favourite or bookmarked items.

Keeping customers in the dark about their orders means they’ll feel underappreciated and concerned about when they’ll even get their order.

Letting them know you’re also thinking of their budget with special offers can also make the difference between a sale or not.

Offer cheaper alternatives

Naturally people are now looking for cheaper alternatives to their regular or one-off purchases, and this could lead them to a competitor.

Instead, make sure you show customers that you have more than one option available, so they continue to spend with you. You could even see an upturn in sales as consumers spend longer browsing to see if they can get a cheaper deal elsewhere.

You could even offer a loyalty scheme for repeat purchases, giving your customers a reason to come back that really does make a difference to their own pocket.

The last point brings us nicely to mailing sure your promotions are relevant. Think back to the times of COVID, you may well have created promotions that made sense back then, so it’s time to do that again.

You might find there’s no point in putting a promo on a nice-to-have or luxury item as consumers aren’t going to buy those anyway, but if you have everyday items that are essential, then a bulk purchase deal or even loyalty offer will go a long way to helping them remain loyal.

Remember your promos aren’t just about making sales, they can also help with your brand reputation too.

Keep promotional campaigns relevant

Email marketing is an excellent tool in making sure your customers, new and old, also know what’s on offer to keep them interested, but don’t forget to review the emails you send them.

As reports, research by Treasure Data in November 2021 found that 45% of consumers will unsubscribe from brand communications that are not relevant to them.

It’s likely this figure will increase as low-income families or those tightening their belts are unlikely to appreciate being shown items that are no longer unaffordable.

Keep emails relevant by monitoring the products that are doing well already but think about how those that aren’t could be amended to make them more attractive or highlight something a customer may have missed.

Keep it personal

Shoppers often have limited loyalty when budgets are tight, and they’ll easily go elsewhere if they can find things cheaper, so remind them that you value their custom.

A personalised shopping experience helps your standout and encourages repeat business.

This is crucial if you’re not able to undercut your competitors on the product price, as you are showing instead what paying a little bit more gets the customer above and beyond the value of the product and familiarity, trust and service go a long way.

Cut back where you can

Let’s not ignore the fact your costs are going up too, as well as facing reduced margins thanks to push back from both retailers and consumers.

You may have to make some difficult decisions to reduce your overheads, but you should at least look to see where you can cut your cloth so you’re still in business when the crisis is over, but don’t make rash decisions.

For example, Kevin O’Farrell, vice president at global analytic solutions business Analytic Partners says you must still keep up with marketing.

He told, “while some may feel inclined to pull back on media spend, this can have detrimental effects on the brand long-term,”

“On average, brands that reduced media investment during the last recession suffered a 18% loss in incremental sales.

“However, the brands that maintained or increased their media investment during the recession came out stronger in both the short and long term and saw a 17% growth in incremental sales and ROI.”

Do your own research

Taking a look at these top tips, we came up with one of our own to determine the best way to keep your customers as they tighten their belts. Ask them what they want.

Email your best customers and ask them what you can offer to help them during these tough times.

Not only will you learn if money off vouchers, loyalty reward programmes, or other services offered will help, but they’ll also feel like you really do value them as customers and that might just make the difference when deciding if they should stay or go.

Don’t forget Asendia is not just a mail fulfilment service, we’re partners to business of all sizes across multiple sectors the world over. If you think we might be able to help reduce your overheads and provide fulfilment services that will build better relationships with your customers, drop us a line.



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