eCommerce in Australia is experiencing major changes, and they’re happening fast. For starters, eCommerce growth has slowed dramatically.
The pandemic was huge for many DTC brands, but Aussies are back to spending the majority of their money in in-store retail and not discovering new online brands as much.
Performance marketing has changed, too. It isn’t been the same since iOS14. The privacy changes, while great for customers, have really raised acquisition costs and lowered the volume of new customers that most of us can find through Facebook or Instagram in particular. Investment in DTC brands has also cooled. Whether it’s due to a less frothy outlook on business, increased cost of borrowing or something else, there’s a lot less investment to go around.
And finally, customers don’t have as much money. Inflation. Rising home loans and rent. Wage growth that doesn’t come close to catching up. While we’re pretty well-off in the scheme of things, retail data is showing that when you account for inflation, spending is slowing down a lot.
Geez, that sounds rough. It’s not all roses, but great businesses that prove their value to customers will be able to retain them.
Here are my biggest pieces of advice to help you retain customers and get through such high inflation:
Invest in subscription flexibility that matches your customer’s needs
Business owners love subscriptions. Customers are increasingly wary of them. My dog food company Scratch has grown into $10M+ per annum of pure subscription revenue, but even we’ve been kept on our toes to prevent churn as we all face high inflation and cost of living pressures.
Even in 2023, most subscription platforms offer really clunky backends to manage your subscription. Every subscription platform should offer the ability for a customer to skip their next order or choose a specific date to move it to. That feature alone is the difference between someone who pauses and doesn’t care enough to re-activate, or someone who skips an order but picks right back up where they left off.
Offer lots of flexibility built into your website, and order reminders, and your active customer base will thank you for it.
Carefully manage price rise communications
Everyone’s prices are rising so I’d be amazed if yours don’t have to as well. Odds are, they’ll have to rise again in the next 6 months. How you deliver this news to your customers will determine whether you get an awful month of churn, or retain happy customers.
When me and my team (begrudgingly) work on price rises, we agonise over our copy to remind our customers of the value they get by feeding their dogs Scratch, give them plenty of notice to get used to the new price and ensure that our website puts their next order will go through at the old price before updating.
Be great
As our customers make line-ball decisions on who to continue with, what substitute products to switch to or where to find a little escapism, businesses that do a damn good job of whatever they sell will be able to weather the storm. Look at it as a challenge to make sure your customer experience is easy, and delightful and that your product works better than people expect.
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