A recent comprehensive study by World Bank warns that the world might be moving towards a global recession in 2023.
What is a recession?
A recession is a period of economic decline characterized by decreased gross domestic product (GDP), employment, and trade.
How does a recession impact retailers?
During a recession, consumers tend to spend less money and prioritize necessities, which can negatively impact retailers. This can lead to decreased demand for non-essential items and decreased sales and profits. Retailers may respond by reducing their inventory, cutting costs, and potentially laying off employees. Some retailers may also go out of business due to decreased consumer spending and increased competition.
How can retailers survive a recession in 2023?
During a recession, customers are looking for ways to stretch their budgets, and they are more likely to choose retailers who offer them the best value. To mitigate the impact of a recession, retailers may need to adjust their business strategies and focus on providing essential and value-priced goods and services.
Here are six tips to help retailers weather the storm and come out stronger on the other side:
Tip 1: Embracing technology
Tip 2: Adapting to changing consumer habits and preferences
Tip 3: Cost-cutting measures
Tip 4: Diversify product offerings
Tip 5: Focusing on customer experience and building customer loyalty
Tip 6: Start selling on social media
Tip 1: Embracing technology
Technology is changing the way how retailers do business. Staying up to date with modern business technology would help retailers to improve their operational efficiency and win over their competitors.
For example, SiteGiant Smart Scan Mobile App is a new technology that retailers could consider using to cross-check their orders. With only a smartphone, pickers and packers can scan the items’ barcodes to verify whether they have picked the correct item for the order. It would help retailers in increasing order fulfillment accuracy and customer satisfaction.
Tip 2: Adapting to changing consumer habits and preferences
Retailers need to be flexible and adapt to changing consumer habits and preferences. Customers nowadays like to compare both online and offline store promotions. Therefore, establishing an online presence through a webstore can help businesses reach a wider audience and grow their customer base.
You can now easily do this with a webstore builder. SiteGiant webstore builder comes with pre-set content blocks that are simple to use, even for those without coding knowledge. Check out here to see how you can build a professional webstore for your brand.
Tip 3: Cost-cutting measures
Retailers need to take a hard look at their operations and find areas where they can reduce expenses. This can include reducing inventory levels, streamlining processes, and cutting back on non-essential expenses. Retailers can also make it a habit to analyse their sales and profit reports continuously.
With SiteGiant ERP, retailers can reduce labour costs by streamlining the operation process. The ERP system also allows you to fulfill orders, manage product information, and also update and unify multichannel inventory without the hassle of logging into multiple seller centers. Retailers can also quickly generate different types of reports, such as item performance reports, gross profit reports, and order reports to understand their business performance better.
Tip 4: Diversify product offerings
Diversifying your product offerings can help retailers reach a wider customer base and increase sales. For example, retailers can offer a mix of essential items and more luxurious products. In addition, retailers can also introduce bundle deals by setting discounts for a group of items bought together.
You can use an integrated system like the SiteGiant POS system in your retail shop to manage the inventory better in your online and offline stores. A system like this can sync all your sales data and stock inventory count accordingly after every sales purchase made offline and online across all integrated platforms.
Tip 5: Focusing on customer experience and building customer loyalty.
A positive customer experience is important in building customer loyalty. Retailers should focus on creating an environment that is welcoming, easy to navigate, and tailored to the customer’s needs. This can include providing excellent customer service, offering a user-friendly website, and creating an engaging in-store experience.
To build a strong customer base, retailers can use SiteGiant customer management tools to classify and categorize customers into different groups based on their amount of spending. This can help retailers to tailor suitable marketing promotions for different customer groups.
Tip 6: Start selling on social media
Social media emerged as a hub for virtual interaction, providing access to news, entertainment, and shopping. People have always relied on word-of-mouth recommendations for their purchasing decisions. Therefore, besides webstore, retailers can also sell products on social media such as Tiktok, Instagram, and Facebook. It can be a profitable growth strategy to sell on social media.
In conclusion, the predicted recession in 2023 may present challenges for retailers, but with the right strategies in place, retailers can survive and even thrive. To be successful during the recession, retailers always have to be flexible and look for good opportunities to sustain their business.
