Shopping in a Recession

Tough times mean a savvier consumer—and opportunities for you

Remember when you bought your first new car? Before you signed that contract, you probably did some serious research to help you decide where your dollar would be spent best. Well, research is showing that consumers in today’s recession aren’t just reserving their scrutiny for big-ticket items, they’re looking closely at just about everything they purchase—especially if they purchase it online.

In a new report, “E-Commerce in a Recession: The Impact on Consumers and Retailers,” eMarketer says that online research has become more important in e-commerce. “These consumers honed their Internet research skills during the 2008 holiday shopping season when, in search of savings and memorable gifts, they deftly moved between sites and tried different online shopping tactics,” the report says. It quotes a comScore study that shows that two-thirds of respondents used Internet research to shape their buying decisions during the last holiday season, and that 50% felt research was more important than it was the year before.

Interestingly, just as online research has gone up, US retail e-commerce sales have slowed, albeit just slightly. After years of double digit growth rates, US ecommerce sales (excluding travel) grew by only 4.6% in 2008. So what does all this mean? Consumers are getting smarter about how they shop online. And as consumers grow more savvy about online shopping, e-tailers need to get savvy right along with them. In doing so, they can increase their appeal to shoppers who are becoming more and more aware of the best ways to save online.

So what can advertisers do to keep up with consumers? Here are a few steps you can take:

Lower your prices
The number one thing, of course, is offer the best possible savings. During our current economic woes, every penny counts and consumers are seeking to hang onto as many as possible.

Give them coupons
According to a January 2009 comScore survey, coupon sites have become a vital destination for consumers looking to save. comScore told Advertising Age magazine (subscription required) that coupon sites are now the second most visited site on the Internet (behind job sites). Consumers are hungry for bargains. So if you’re able to offer them some, you should probably do so.

Coupons were a powerful incentive for users even before our current economic crisis, but they become even more sought after as belts tighten. If you offer coupons, be sure to let your users know in your ads. And if you don’t, consider making them available.

Offer free shipping
In addition to coupons, consumers are also seeking to save by purchasing from retailers who offer free shipping. According to Forrester Research (as cited by Internet Retailer), 75% of people interviewed in 2008 said they were more likely to shop with an online retailer who offered free shipping. As we’ve often said here on the YSM Blog, free shipping really makes users stand up and take notice.

If you offer it, be sure to call it out. Be careful to mention any caveats you may have, such as a certain amount users must spend before qualifying for free shipping. While a qualifying dollar amount may not deter users, not finding out about it until the items are in their shopping cart may.

Help them with their research
Other methods of reaching consumers include things like offering shipping confirmation, product reviews, multiple images of your products, live help or 24/7 customer service. Any extra help or guidance you can provide your customers could go a long way towards turning them from spectators into shoppers.

Though we’re in the midst of a recession, online e-tailers have a unique opportunity to reach customers who may be spending a little less, but who are more eager than ever to spend smart. They’re looking for the deals you have, so now more than ever, make sure they can find them.

—Noah Belson, Content Quality Analyst