Yuliia Khmelevska

Tech and Marketing Writer

How to recession-prof your eCommerce business

How to Protect Your eCommerce Business During an Economic Recession

As the global economy is shaking, small to medium eCommerce businesses are the first to feel its impact. In addition to the ever-green challenges of increasing competition and changing customer preferences, now eCommerce companies have to weather the storm of economic recession. While there is no silver bullet against it, there are some strategies to future-proof your eCommerce business and create a solid revenue stream in the long run. You are welcome to discover them in this article.

What Is an Economic Recession and How Does It Affect eCommerce Businesses?

Simply put, a recession is a state of the domestic or global economy when industrial production, retail sales, and customer solvency decreases significantly, while the unemployment rate is growing. The most common reasons for such economic decline are growing interest rates, decreased customer confidence, political instability, and armed conflicts. Regardless of the reason of the economic recession, generating revenue amid such conditions becomes significantly more difficult.

An economic recession creates a kind of vicious circle for eCommerce businesses. While consumer solvency decreases, the supply costs grow meaning that the final price tags for customers rise in response. Since customer spending is low because of unemployment and growing prices, there are few to no sales. But instead of falling into despair, let's find out how to recession-proof your business amid its times.

10 Actionable Ways to Recession-Proof Your eCommerce Business

Recently, big eCommerce corporations like Amazon, Walmart, and Groupon suggested an easy way of protecting a business during the recession — and fired unprecedented 27,000 employees (by Amazon only). Fortunately, there are other, no less viable recession-proof practices to protect your eCommerce business, so let's discover them one by one.

Optimize the costs wherever you can

The first thing businesses always do in response to the crisis is optimize the operational costs. While there are some factors that you can't influence (for example, the price of raw materials or the amount of taxes you have to pay), there is still some room for cost optimization. So, pay attention to the next expense items.

  • Payment processing costs. For instance, PayPal charges $2.9% + $0.30 per transaction but if you sell thousands of items per month, the final sum spent on payment processing will be huge. So, revise the fees of payment processing services you use, consider removing those your customers don't use too frequently, and/or add a "Cash on delivery" option.

  • Shipping costs. 66% of customers expect free delivery when shopping online. Indeed, meeting this expectation may cost a fortune for an eCommerce retailer, so consider implementing more flexible shipping policies or enrolling in more advantageous partnerships with delivery services. By the way, raising the pricing for your goods to pay off free shipping isn't the right tactic in this case, since the customers' solvency decreases during the recession.

  • Return costs. According to different data, the average return rate in eCommerce is 16-30%, which costs retailers up to 66% of the item price. Think about optimizing your return rate by providing more detailed descriptions of the items and adding high-quality photos with every detail and color shade clearly visible. Gathering customers' opinions about the item and shooting a real-life product video are also good tactics to help customers make fully-informed choices and decrease the likelihood of a return.

Improve customer service

Providing exceptional customer service despite the recession is an opportunity to create a strong competitive edge for your business. 96% of customers say that customer service is one of the most important factors that impact their brand loyalty, so missing it is a crucial mistake regardless of the economic environment.

Now, you may wonder — how to improve customer service when there is a pressing need to optimize operational costs? Consider an outsourced customer care center instead of running it on your own. In this way, you will be able to save rental costs and cut employee training expenses, since it will be the responsibility of your BPO vendor. The only task remaining is to choose a trusted company to help you build an outsourced customer service center.

Use eCommerce marketing automation tools

Automating your core marketing processes enables you to increase sales by up to 14% and decrease marketing overhead by 12%. Leading marketers worldwide also agree that using marketing automation solutions allows for improving customer experience and team productivity, helps gather customer data and make well-validated decisions, improves lead capturing and personalization in eCommerce, and most importantly — enables smarter use of marketing budget. To improve sales efficiency, focusing on sales automation is a great strategic move.

Consider getting started with the simplest possible marketing automation tactic and automate your email campaigns. For instance, with the help of Yespo, you can create deeply personalized marketing messages and send them automatically, in response to your customer's behavior. You can also create highly-converting AMP emails (the ones customers may interact with directly, for instance, order your products right from the mailbox), use ready-made automated workflows (for welcome or abandoned cart emails), and re-engage your customers by sending them personalized letters after an abandoned browse.

Discover the full power of marketing automation now!

Observe changes in your customers’ behavior

Customer behavior analysis is a well-adopted practice in eCommerce. If early it was the tactic to make a thriving business even more successful, now it opens up a way to survive the economic recession. So, if you have never used a customer data platform, now is the right time to start.

With the help of Yespo, you can observe changes in customer behavior and respond accordingly. For example, if the customer browses a certain product or category on your website, asks questions in chat, and reads other buyers' feedback but still leaves without a purchase, it means that they need a kind push. Our system analyzes customers’ behavior patterns and predicts the right time for a personalized incentive, for instance, free shipping or a discount. Next, you will be able to upsell related products or offer complementary ones.

Develop a Unique Value Proposition (UVP)

This task becomes more challenging since you have to take a specific economic environment and changing customer spending patterns into account. For example, during a recession, customers are unlikely to buy new and expensive items. Instead, they prefer repairing those they have. So, if such an idea suits your business niche, consider adding a recession-specific service, in addition to the items you sell.

During the recession, your customers may also face new challenges, so their pain points will change as well. That's why you have to put double effort into understanding your target audience and researching their needs deeply. As an option, you can run customer surveys or opinion polls, using Viber or SMS communication, and adjust your value proposition accordingly.

Improve personalization

48% of customers spend more when their shopping experience is personalized, and 83% of modern users don't mind sharing their personal data to get highly-relevant offers. At the same time, personalization in marketing is not just about using someone's name in an email; it's about creating a unique and personalized experience that resonates with each individual customer on a deeper level.

Here are the basic steps to improve personalization on your eCommerce website.

  • Segment your target audience. For example, you can segment them depending on the average check, purchase history, and frequency, product categories they are interested in, or geographic location.

  • Personalize your product recommendations. Next, you can use data analysis to recommend products based on customers' previous purchases, browsing history, and real-time behavior.

  • Run retargeting campaigns. You are also welcome to run retargeting campaigns in mobile apps, email, SMS, and instant messengers to keep both conversion rate and customer engagement high.

Start personalizing your customers' shopping experience with Yespo!

Consider an eCommerce subscription box business model

If your eCommerce store sells such products that your customers need to re-supply frequently, for instance, health supplements or pet food, the next tactic to recession-proof your business is for you. Recently, the eCommerce subscription box business model became popular.

With its help, your customers can subscribe to a monthly delivery of a personalized product set. In this way, they shouldn't spend extra time placing an order every time they need to replenish their home stock, and your business has a stable and predictable income stream.

Here is an example of how it may look:


Focus on Customer Lifetime Value (CLV)

Indeed, most of the strategies in this article are aimed at increasing the customer lifetime value (which is the amount of revenue the customer is projected to generate for a business during their relations with an eCommerce brand). For instance, improving your customer service is just one of the ways to increase CLV, in addition to other tactics.

So, below are some more tips to grow your customer lifetime value, and establish a more solid revenue stream for the long run.

  • Pay double attention to customer feedback. This tip sounds easy and intuitive but listening to the opinion of your customers, and most importantly, improving your products or services accordingly, allow you to create a strong competitive edge during the recession.

  • Identify high-value customers. Analyze customer data and identify those who bring the most value to your business. Next, segment these customers and create personalized campaigns to encourage them to make more purchases. At the same time, keep in mind that this customer group is likely to be the most loyal to your brand, so instead of bombarding them with offers and discounts, take special care of them.

  • Cross-sell vs upsell. Upselling and cross-selling are ever-green tactics to increase the average check and CLV. Yespo's data-driven engine gives it an easy way, allowing you to configure flexible recommendation settings without the need to code or hire a professional programmer. Your customers will get deeply personalized recommendations based on their previous behavior, shopping history, responses to your campaigns, and personal preferences.

Leverage AI algorithms to future-proof your business!

Diversify your products and services

When consumers are cutting back their spending, it's important to have a broader offering. In this way, you can reduce reliance on a single eCommerce product or service, create a new revenue stream and distribute the possible risks across several markets.

While there is no one-fit-all diversification strategy, keep in mind the product and services that become most in-demand during the recession. Perhaps, some of them are in line with those you sell now and may be interesting for your target audience. So, here is a list:

  • home self-care and affordable beauty products

  • nutrition products and meal replacements

  • sport and home fitness equipment

  • inexpensive entertainment services and repair services

  • kitchenware and spare parts for almost everything that can be repaired.

Consider entering a new market

In addition to diversifying your product and services offering, you may also want to consider entering a new market. For example, if you have a product retail business, you can start selling on eCommerce marketplaces like Amazon, eBay, or Rakuten. It can be a good tactic in terms of retail marketing. If you have a mobile app, think about localizing it and offering it to foreign users but pay double attention to legal compliance before investing in mobile app development and launching a mobile app on a new market.

While the idea of reaching new markets may sound risky during the recession, this is just the main benefit of this tactic. Expanding during a recession usually means less competition, more opportunities to negotiate rental and labor costs (for businesses establishing a physical presence in new countries), and long-term eCommerce growth potential.


By implementing the strategies outlined in this article and using a customer data platform like Yespo, you can protect your eCommerce company during tough times. We would be glad to help you run data-driven, deeply personalized, and automated marketing campaigns, stay in close touch with your customers, build their loyalty, and create a recurring revenue stream in the long run.

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Yuliia Khmelevska

Tech and Marketing Writer

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