Recession, Boon or Bane for Online Retailers?

Recently, majority of economists (Wall Street) agreed that we are already in a recession (according to the survey), and predicted that economy will continue to deter further. This obviously is a very bad news for everyone, but not so for online retailers. Recent survey concluded that online shopping has increased in this period (recession). Internet usage has increased tremendously in a short period of time (it’s reported that 80% of the current population has broadband, and more than 70% of the population is online), there is no more a question or debate on whether retailers should start investing in online shopping stores.

With the help of internet, customers are getting more options to choose from various online shopping websites, and they are also cost effective (saving gas prices to drive to the store, free shipping), than walking into a regular store. What this means to online retailers? They should anticipate this shift and now look at other opinions to attract customers than online ads alone. It’s not a viable option for them to cut down the quality and reduce prize to attract customers. Customers are not only looking at the price but also learning more about the product and the company through reviews of the product, and read blogs about the company. Even the slightest error by the online retailers can create repel effects to the product and company. Apart from that, customers have lots of choices to choose from as everything is on the internet.

From brick-and-mortar retailers to the “mom and pops” stores, virtually everything is available on the internet. Anyone who is in the online retailing business has to follow two fundamental rules, “Maintain quality & don’t over promise” and “keep a close eye on the pricing”. If product is not up to the quality or standards claimed by the retailer, then it can ruin his business in a short span of time. Customers are quick to share this information in form of reviews, blogs or networking groups, which are readily available to everyone on the internet. Online shopping has given customers many more options to choose from than any regular store where they have limited options to choose from what is available in that store. There are different websites that give price comparison of the same product, which makes customer to visit different online stores in a matter of seconds. Online retailers need to be vigilant all the time to make sure that they are not losing customers, and have come-up with a pricing model that very competitive.

Compared to the previous US recession, this recession gives some relief to consumers as they can take advantage of internet to shop around. Inspite the recession fears growing, online retailers are still seeing new customers who are interested to shop online to manage their shrinking budgets.