What a difference a couple of years makes.
When the COVID-19 pandemic forced people around the world to stay home and shelter in place, shopping habits changed overnight. Suddenly, ecommerce retailers found themselves on cloud nine: U.S. consumers spent $1.7 trillion online in 2020 and 2021, a whopping 55 percent increase from the previous two years.
Fast-forward to today, however, and it’s a whole different ballgame.
A confluence of factors — including rampant inflation, persistent supply chain issues, and consumers’ preference to return to brick-and-mortar stores — means ecommerce companies now find themselves staring at a scarily bleak near-term future.
In April 2022, for example, U.S. consumers spent $5.8 billion less online than they did the previous month. Even that perennial ecommerce juggernaut Amazon saw retail sales dive 3 percent during the first quarter.
With inflation showing no signs of slowing down and a recession all but inevitable, it’s safe to say that unprepared ecommerce companies will have their work cut out when it comes to surviving the coming storm.
The good news is that virtually every ecommerce business has access to data resources that can be harnessed to defend profit margins, increasing resilience when toughing it out in volatile markets. It used to be the case that profit optimization technology was complex, costly, and a burden to manage. The very latest systems are even more sophisticated in their ability to analyze big data and tune margins, but they are as quick and easy to use as a social media app.
Profit optimization: The foundation of a robust ecommerce strategy
Years ago, ecommerce retailers chased growth at all costs. But as the ecommerce landscape has matured, growth is no longer the holy grail. In today’s increasingly competitive, fast-moving ecommerce landscape, profit is rapidly becoming the top priority.
Striking the right balance between prices, costs, and margins is a fundamental challenge for ecommerce retailers. Set prices too high, and you risk alienating customers who can quickly find substitute products — resulting in lost sales that few ecommerce retailers can afford in today’s challenging economy. But set prices too low, and those sales may not earn the business enough money. Without a solid profit base, there can’t be confidence that ecommerce retailer can withstand the coming economic storm.
Finding the perfect price — the highest fee you can charge while still winning customers — starts with using artificial intelligence and machine learning to make data-driven decisions. With the right optimization solution in place, you can rapidly analyze every corner of your ecommerce strategy, including inventory, promotions, pricing data, and customer behaviors, and leverage predictive and prescriptive recommendations that make it easy to get that balance and make more money every day
Instead of trying to draw insights from multiple systems, employing expensive analysts, or resorting to gut instinct, the future is technology that’s simple to use daily to continually optimize your business to make it more financially sound.
With a powerful profit optimization engine helping you to manage your ecommerce business, you’ll be able to boost your margins and best placed to weather the gathering storm. Then, once the storm has passed, you’ll be on incredibly solid ground — and well-positioned to thrive when the economy begins to accelerate once again.
To learn more about the easiest way your ecommerce company can maximize margins in today’s difficult economic climate, request a demo of Hypersonix today.