Six Ways E-Commerce Development Can Take the Edge Off the Recession

Amid the gloomy news of a weak 2008 holiday retail season, there was one shining light. Leading online retailer Amazon.com reported record-setting sales in December, despite the deepening recession. Rather than being viewed as an aberration, Amazon.com should be viewed as the bell cow of e-commerce development--a leading indicator of where things are going.

Indeed, there were indications that online retailers generally held up better than their brick-and-mortar counterparts during December of 2008. This is a clear sign that even during a recession--or perhaps especially during one--it makes sense to put money into e-commerce development. By investing in everything from e-commerce site design to promotion, a company can help take the edge off the recession.

Here are six ways an e-commerce Web site can help during a recession:

1. Expanding Geography without Increasing Costs. Expanding geographic sales reach is one way to offset slowing sales, and with an e-commerce Web site this is possible without the drastic increase in costs that would be associated with a physical expansion.
2. Improving Tracking of Marketing Results. Traditional marketing methods such as print or broadcast advertising represent a leap of faith that a company just cant afford during a recession. Search-driven promotion and other Internet advertising can deliver more quantifiable results.
3. Reducing Personnel Costs. An e-commerce Web site allows a company to maintain a robust retail presence with far fewer staffers than an equivalent brick-and-mortar presence would require.
4. Reducing Real Estate Costs. E-commerce savings also extend to real estate costs, including rent, utilities, and insurance. Replacing retail outlets with an increased emphasis on e-commerce development is a way of cutting costs without cutting sales capacity.
5. Reducing Weather Sensitivity. As if the recession wasnt bad enough, freakishly bad weather throughout much of the country put a further damper on 2008s holiday sales. However, the snow is never too deep for someone to get to an e-commerce Web site.
6. Improving Inventory Management. Retailers practicing just-in-time inventory management techniques face the dilemma of how much to cut back when the sales forecast is weak. In an effort to avoid having excess inventory, retailers risked not having enough product on the shelves when shoppers came through the stores. E-commerce makes inventory management both simple and cheap.

Capturing the E-Commerce Development Opportunity
With the recession-easing effects of e-commerce in mind, here are some things a company can do to ramp up e-commerce development:

• Benchmark Leading E-Commerce Web Sites. E-commerce is rapidly evolving, so standing pat means getting left behind. It is important to regularly monitor the most successful e-commerce Web sites, to keep up with emerging trends in e-commerce site design.
• Invest in E-Commerce Site Design Upgrades. Having identified the most successful e-commerce site design elements through benchmarking, a company should not delay making upgrades to incorporate those elements. A key metric for e-commerce site design should be the conversion rate--i.e., the goal of design upgrades should be to increase the number of visitors to the site who actually purchase something.
• Direct Marketing Dollars toward E-Commerce Development. Spending marketing resources on measurable promotional techniques increases the concentration of dollars spent on the most successful techniques.

Sources
E-Commerce Times
NY Times