Whether or not the UK will head into a recession or continue to narrowly avoid it, retailers are facing tough trading conditions due to the cost-of-living crisis. To survive and thrive, it’s crucial that merchants have strategies in place to navigate their way through difficult economic times, and that they fully leverage the ongoing growth of eCommerce which now accounts for over a quarter of all retail sales in the UK.

It’s also more important than ever to really listen to what customers want, so to provide valuable insights, we recently commissioned YouGov to survey over 2,000 UK shoppers on how their spending habits are likely to adjust in light of the current financial climate. Here we share some of the key findings of that research, along with actionable advice and strategies for online retailers.

Add more value 

Unsurprisingly, our survey shows that 71% of UK shoppers plan to spend more time looking for the best value before committing to purchases. While some retailers may look to slash prices in an attempt to win over customers, this can be a risky approach - particularly when margins are already tight - however there are other ways to increase value perception that can be just as effective..

Refine all offers across your store - including product bundles and discounts - to make sure you’re well positioned against your competitors, and clearly highlight potential savings to encourage customers to stay on site. Also ensure that product benefits are clearly communicated across your product pages, and where relevant, emphasise how items can save time or resources. As the retail saying goes, sell the sizzle, not the sausage.

Also look at ways you can provide value that goes beyond cost. Ensure you’re delivering a better shopping experience than other stores, make customers aware of what differentiates your brand, and if you’ve got specific expertise that sets you apart from other retailers, share it online to build trust, reputation and customer loyalty. 

Our survey also found that over half of the respondents are likely to rely on delayed payment methods to make purchases, which includes credit cards, split payments, and buy now pay later schemes, so offering broader payment options could help to reduce checkout abandonment. 

Prioritise retention over acquisition

When shoppers are spending less, they often rely on familiar brands to reduce the risk of wasting money. This is reflected in our survey results, where 74% of those who took part confirmed that during a cost of living crisis, they’re more likely to purchase from a store they’ve previously placed an order with. 

For retailers, this means it’s even more cost effective right now to focus on converting and keeping engaged customers rather than allocating the majority of your marketing budget on acquisition. Focus on encouraging lapsed shoppers back to your store by putting in place - or reviewing existing - personalised email campaigns, retargeting ads, and a winning basket recovery system. 68% of the shoppers we spoke to also confirmed that they’re currently more likely to look for voucher codes, so exit intent overlays can be a solid way to boost conversion, especially when paired with unique discounts.

Reward schemes can also build customer loyalty, however only 46% of surveyed shoppers confirmed that rewards can persuade them to place an order, highlighting that there isn’t a one-size-fits-all approach that works for all retailers or customer types. Make sure whatever you’re offering in exchange for repeat purchases is right for your brand and genuinely appealing (and attainable) to your core market.

Stay relevant

Although it may seem like the right time to cut marketing budgets, data from previous recessions shows that brands that stick with campaigns are more likely to stay in business. Instead, review your messaging and targeting to ensure you’re reaching the right people at the right time, and reflecting your customers’ current needs. Also make time to optimise product feeds to avoid wasting spend, frequently review your advertising setups to maximise return, and reallocate spending to channels that are working hard for your business. 

Economical ways to build brand awareness are also worth considering - 46% of the shoppers we surveyed agreed that they’re more likely to make referrals in exchange for rewards, so look to leverage word of mouth marketing where possible. 

By actively listening to what customers want and adjusting your strategies in line with changing needs and expectations, your business can successfully navigate its way through the current climate, and strengthen customer loyalty in time for the economy’s inevitable recovery.