How to recession-proof your online retail business

by Cheryl Ingram. We are seeing local retailers innovate and update their offerings and approach daily – and that bodes well for the future.

by Cheryl Ingram. There’s no denying that Eskom challenges aside, a multitude of worldwide issues are affecting our economy. The rise in fuel prices and food costs are a common topic of conversation throughout South Africa and retailers and consumers alike are feeling the pinch. That’s not to say that our ability as a society to tough things out has waned – in fact, we are seeing local retailers innovate and update their offerings and approach daily – and that bodes well for the future.

The e-commerce environment didn’t exist 15 years ago and it is thoroughly mercurial in nature – last week’s campaign may be yesterday’s news and the ability to keep on top of trends and changes as they happen is an intricate art with some science attached to it. If there is one thing we know about e-commerce, having weathered the past three years, it’s that it is always possible to make a plan – it’s just knowing what needs to be done and being brave enough to change tack if it doesn’t work, that’s the beauty and the extraordinary challenge of the online retailers environment.

The South African economy has been on the receiving end of a recession since the euphoria of the Soccer World Cup in 2010 and we’ve struggled to regain the buoyancy of the years pre that period. That said, the early days of COVID19 were dark days indeed with many business owners left reeling at the prospect of stores closing and online sales coming to an abrupt halt. This reactive response is not that dissimilar to what we see when we head into a recession and certainly, for some of our global clients impacted by the growing economic uncertainty that’s currently fast spreading across the western world, a tightening of the belt and a pulling back on marketing budgets is something we’re starting to hear of more frequently.

Keep marketing

That said, in order to recession-proof your business we would encourage clients to be bold and to keep on marketing. In fact, if we take lessons from those that adopted this mentality going into Covid – merchants who embraced the unknown head-on and maintained their marketing spend rather than recoiling in fear, saw unprecedented growth during this period. Those that took a more cautious approach or pulled back on their spend struggled to play catch up. Maintaining your marketing during testing times does two things – it reduces the likelihood of customer churn and opens the door of opportunity to acquire new customers when your competitors pull back on their spend. “Some of the top clients in our portfolio are investing six figures plus, monthly on Google, and the same across social media, and they are showing no signs of slowing this down.

More attractive offerings

Recession-proofing your business also requires a change in ways of working. This is especially true with regards to how customer-centric your business wants to be during testing times, and in the e-commerce space, this is actually something that is easily addressed through innovations made in the payment and loyalty spaces. Deals and discounts have become part of consumers’ daily language and it is certainly a way of attracting curious customers and rewarding loyal ones. The Buy Now-Pay Later payment option, an alternative solution that doesn’t simply add to the debt trap, is proving to be a robust one for many online retailers. These solutions are showing no sign of slowing down and adopting this payment solution is one way for retailers to easily achieve the stamp of approval from their consumers.

Loyalty is gold

Implementing a loyalty program that incentivises repeat consumer purchases with value pricing, rewards and additional loyalty benefits, is an excellent way to continue to drive traffic to your online shop and to reward your loyal customers. This tactic works very well for customer retention, improving the lifetime value of the customer and building longer term personal relationships with your customers.  Loyalty also gives you an added reason to communicate more frequently with your customers ensuring that you stay top of mind; and those businesses that manage to retain that top of mind position during times of recession, will undoubtedly emerge victorious when things ease up again.

Subscribe and win

Subscription services are another way to deliver innovation to your consumer during testing times – this might mean reduced pricing for ongoing commitment, but what it does is lock in sales making your revenues more predictable during unpredictable times. A really good example of this is the way in which Kauai initiated their 30-day smoothie and coffee subscription offer during the pandemic – the savings were deep and consumers loved it. In all likelihood, few actually redeemed it daily, but it created a fixed revenue line for a food outlet hit hard by the restrictions of lockdown.

Short term pain vs long term gain

While recession and economic dips are frightening, we believe that it is possible to survive and thrive. I always advise clients to maintain their agility (and to be open minded to change), be ready to pivot, keep on marketing and plan ahead. In fact – every business should have a crisis management plan ready to go in the event that a recession hits. Pre-planning will help you navigate the tough times. We always say, plan for the worst and hope for the best.


Main image credit: Supplied.



Cheryl Ingram is the founder and managing director of one of South Africa’s leading e-commerce development agencies, The Digital Media Collective (TDMC), with a client base of some of the country’s leading online retailers. As one of only four accredited Shopify Expert Partners in Southern Africa, the innovative Durban-based outfit is also a Google Expert Partner and Meta Business Partner – no mean feat for a company started at Cheryl’s dining room table nine years ago.


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