All of us know that we are in a recession period and wondered what we should be doing to shape up our businesses. Let us look into the fundamentals of what does the recession mean. We know that the economy has two facets ie demand and supply. Whenever there is a surplus in supply and the demand is fairly low we call it as a recession. A deaf recession is called as depression. What do we mean from the above is that there is a surplus-finished goods available in the market although there are not many buyers to by the product. In this scenario the size of the market comes down or the growth projections which were speculated for the future will not be met. In fact the overall size of the market may come down from the previous year as well. In each segment there are many players and in a normal situation, they operate in a model where each player would like to capture a certain portion of the market share. In a recession this gets converted to the steep competition to get the share of fairly small market size. This is a period, which defines the survival of the fittest.
The ecommerce arena is not an exception during the recession. A good thing out of the recession is that once we hit the bottom, there would be period where we will recover, because of the stimulus packages and then slowly we will proceed towards the situation where the market will over heat. The consumer sentiment will again drive towards creating bubble, which would outburst again to drive the economy towards the recession. The market will take some time to heat up from the bottom of the recession and the market players should be positioned to take advantage of this situation.
In a recession, the established players always have the cost advantage over the small players or the start-ups. In this situation, the start-ups or small players should be breaking even and building volume to get a share of the overall business. It would always be advisable not to get into the price war with the established player in the market place. The ecommerce service providers also should be focusing on the customer satisfaction because the word of mouth is the ultimate way of advertising the service offered. Many businesses to consumer portals do not hold any inventory. It would always be advisable to carefully observe the segments that would have sold and have an inventory of the goods to get a discount which can be passed on to the customer.
The next big thing happening now is the social media, which has gained acceptance in the society. There are B2C players who have integrated social media as well to increase their market share. Finally it is the innovative way of providing service to the customer which will be differentiating the players in the market place. One of the simple ways to keep customer in the loop is to update the customer in every step of the order from procuring the material until the package is shipped because the customer will be expecting to know what is happening with his order once the order is placed on the net.
