How ecommerce businesses can thrive during a recession | Acro Media
Miles J. Adrian


Miles J. Adrian

, Guest Writer

Posted in Digital Commerce

June 9, 2020

How ecommerce businesses can thrive during a recession

Recession is not a new phenomenon. Still, whenever it occurs, companies panic and many go into a hibernation mode — slashing operating costs and battening down the hatches to try to survive. However, history bears witness to the fact that slowdowns have led to many of the same disruptions ruling the global market today, and businesses that stay active during slower economies are more likely to come out on top when things pick back up.

Here, we explore a few of the measures and improvements that an ecommerce business can undertake to withstand any slowdown and emerge in a position of strength. 

Staying financially afloat is a number-one priority no matter what is happening in the larger global economy, but staying profitable during a recession is even more crucial. This means taking a proactive approach to reducing overhead costs and pivoting your sales and marketing strategy. Here are a few places to start:

Automate wherever possible 

Still learning? Find out more about business automation.

According to a report by McKinsey, companies can automate half the activities for which they pay their employees $16 trillion in wages by adapting their technology. Though expensive upfront, automation can raise productivity by 0.8 – 1.4% annually. It can perform the daily tasks that employees often find tedious and demotivating, and boost human productivity by reducing bandwidth spent on coordination, collaboration and switching between tasks. So take a hard look at your operation to identify areas that you can bring automation in

Optimize your tech stack

Even the leanest companies are likely to have some redundancies within their tech stacks, so do a careful inventory of all of the tech you use to make your company run. You’ll likely find services you no longer need and identify contracts that you may be able to negotiate down to a better rate. 

You should also take this time to evaluate your ecommerce platform and architecture. Do you have all of the tools you need to succeed? Are you employing too many tools that are confusing the customer journey or reducing the productivity of employees? If so, a period of slower business can be a great time to refresh your ecommerce system

Leverage third-parties efficiently 

In many business ecosystems, duplicative costs between suppliers and retailers can go unaddressed for years, quietly draining profit margins. So do a deep and detailed analysis of the third parties you currently use across your supply chain and inventory, marketing efforts and independent product development — is there any redundancy you can eliminate? You may also identify a few areas where tasks currently handled in-house can be more efficiently and effectively managed by third-party vendors. This type of analysis and realignment can unlock profits by making business easier, more affordable and effective. 

Be prepared to pivot

After the SARS outbreak in 2002, Alibaba became a known name in the world of eCommerce, challenging the likes of Amazon and eBay. Four years later, the financial crisis of 2007-08 provided a unique opportunity for new business models capitalized on by the likes of Airbnb and Uber. During a recession, a market or region may respond better than others — so it is essential to explore new markets while conducting an in-depth analysis of emerging trends. 

Once you’ve identified areas of opportunity, be prepared to make shifts to your digital presence and ecommerce strategy and identify the minimum viable product you’ll need to capitalize on them. Ecommerce companies that can adapt themselves to rapidly changing customer and market trends can walk out of the recession stronger than those who are reluctant to invest in new tools and technology. 

How to ensure long term success

Once you’ve buttoned up a game plan to protect profits and stay afloat in the short term, it is time to take a look at your business’s longer-term goals. As mentioned above, recessions often breed disruption and innovation in the business world, so now is not the time to lose the bigger picture of where you want your business to be in the next 5 to 10 years. 

Prepare a roadmap

Document your 2 to 3-year plan with a roadmap. It’s essential for the companies to maintain a roadmap as a centralized tool to track everyone’s strategic role, clarify what you intend to achieve, and in how much time. If you already have a roadmap, pull it back out to reassess it in light of the current economic climate. You may spot areas where you need to shore up your branding or adjust your sales strategy to continue to keep your audience active and engaged. You may decide that you need to scrap it altogether. If that’s the case, get creative when building your new one and think big. Now is not the time to play it small. 

Build for the future

Then, use that roadmap to think about the tools, platforms and capabilities you need to get to your end goal. This will likely involve you taking a long and hard look at your existing digital presence and ecommerce environment. Think about what you’ll need to most easily and effectively scale your business — is your current system prepared to meet that challenge? It can pay dividends to migrate to a new more robust platform now so you can be as agile as possible later. 

Final thoughts: Ecommerce innovation and disruption

The Great Recession gave rise to many ecommerce innovations and disruptions in the global market. US-based logistics services UPS and FedEx shifted their focus from the U.S. to global providers of parcels and logistics services. In the intervening period following the Great Recession, we have seen companies emerge from nowhere to achieve distinction and their subsequent acquisition by rivals. This resulted from companies adopting new models and exploring new markets. Any ecommerce business can come out of a recession stronger if it focuses on enhancing efficiency, reducing cost and improving productivity.

At Acro Media, we are dedicated to engineering ecommerce systems that allow our clients to both survive in the short term and thrive in the long term. Interested in learning how we can help recession-proof your business? Reach out for a consultation today!

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Miles J. Adrian is writing a PH.D. thesis on corporate blogging. He has been enabling sales of IT/technology products and services for almost a decade. He has a keen interest in eCommerce technologies, including CMS, front-end, and back-end. Miles has written extensively on upcoming technologies like Artificial Intelligence, Machine Learning, Blockchain, Internet of Things, Cloud, DevOps, Microservices, and specializes in writing case studies, white papers, web pages, and blogs.