May 11, 2023
Reading time: 9 minutes

How to Build Inflation and Recession-Proof eCommerce Business

As the economy roller-coasters, businesses are left scrambling to keep their customers happy and loyal. According to the IMF, economic inflation has reached a 40-year peak in some countries.

It’s no secret that tough times tend to make consumers more cautious with their spending. This can result in a high churn rate for businesses.

Proven Strategy for the Inflation & Recession Proof eCommerce Business

However, fear not! There are several eCommerce customer retention strategies to beat churn in times of economic instability. We’ll reveal these strategies in this article.

So buckle up and get ready to ride out the economic storm with these tips for beating churn and retaining your customers.

Understanding Economic Inflation

Inflation is a macroeconomic phenomenon that measures the rate at which the general price level of goods and services in an economy increases over time. Money supply, consumer demand, and economic policies are just a few of the variables that can affect it. 

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What is causing inflation?

Inflation is on the rise due to multiple factors, including increased food and energy costs following the COVID-19 pandemic and disruptions in global wheat exports due to the Russian invasion of Ukraine. Additionally, pent-up consumer demand post-COVID has caused a surge in oil prices.

 How Do Inflation and Recession Affect Your eCommerce Store?

  • Reduces the purchasing power of money
  • Increases the cost of borrowing
  • Encourages people to spend and invest money quickly, before prices rise further
  • Redistributes wealth from lenders to borrowers
  • Can cause uncertainty and instability in financial markets
  • Can lead to wage-price spirals, where workers demand higher wages to keep up with rising prices, leading to further inflation.

Inflation vs Recession – Which is Worse for eCommerce?  


DefinitionGeneral increase in prices over timePeriod of economic decline with negative GDP growth
Impact on eCommerce businessesCan lead to increased prices of goodsCan lead to decreased consumer spending
Shopper behaviorMay reduce purchasing power of consumersConsumers may prioritize essentials over non-essential purchases
eCommerce industry impactMay lead to increased demand for fast-moving consumer goods (FMCGs)May lead to decreased demand for luxury items or non-essential goods
eCommerce business strategyMay require re-pricing of products or shifting focus to lower-priced itemsMay require cost-cutting measures or focus on value-added services
Government responseMay need to take measures to control inflation such as raising interest ratesMay need to implement stimulus measures to boost spending and reduce job losses

When it comes down to which is worse for eCommerce, determining the answer isn’t clear cut. Both eCommerce recession and inflation can significantly impact the industry (and the economy as a whole) in different ways.

What is eCommerce Recession?

eCommerce recession is a period of economic decline lasting from several quarters to several years. During a recession, eCommerce businesses experience a decrease in the following and more:

  1. monthly sales
  2. new customers
  3. repeated purchases
  4. the average order value
  5. available suppliers
  6. customers’ confidence

What is the Difference Between eCommerce Recession and Inflation?

eCommerce recession is a period of economic decline where the Gross Domestic Product (GDP) is negative. It can affect the eCommerce industry by reducing consumer spending and demand. It may also require eCommerce businesses to shift their focus towards lower-priced items, cost-cutting measures, or value-added services.

Inflation, on the other hand, refers to a general increase in prices over time, which can lead to increased prices for goods that eCommerce businesses sell. It can impact consumers by reducing their purchasing power. It may cause businesses to re-price the products or services they offer or shift towards fast-moving consumer goods (FMCG).

Both recession and inflation have significant impacts on the eCommerce industry and the economy, but in different ways.

Proven Tactics to Make Your eCommerce Business Inflation and Recession Proof

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eCommerce businesses face the challenge of staying afloat during times of economic instability. Inflation and recession can have adverse effects on consumer behavior and the industry. However, there are proven tactics that can give you a recession-proof eCommerce business.

Here are three anti-inflation eCommerce tactics for you:

  1. Improve Your Online Presence

A strong online presence is essential to attracting and retaining customers, especially during times of economic instability.

The following tactics can help improve your eCommerce business’s online presence:

Make Your Website User-Friendly

A user-friendly website can increase trust and sales. Ensure your website is easy to navigate with mobile optimization and high-speed loading times.

Below are best practices for making a user-friendly website:

  • Clear Navigation
  • Responsive Design
  • Readability
  • Concise and Engaging Content
  • Clear Call-to-Action (CTA)
  • Search Functionality
  • Error-Free Experience
  • Accessibility
  • Social Proof
  • Minimize Distractions
  • Contact Information
  • Clear Branding
  • User Testing

Optimize for Search Engines

By optimizing for search engines, you can reach a broader audience. Optimizing for search engines can benefit your business by improving your website’s visibility and organic search rankings.

This leads to increased website traffic, broader brand exposure, and more opportunities for potential customers to discover and engage with your products or services.

Use keyword research, high-quality content, and metadata to improve your search engine ranking.

Leverage Social Media

Social media is a powerful tool for building brand awareness and engaging with customers. Platforms like Instagram and Facebook offer excellent opportunities for eCommerce businesses to showcase their products and engage with potential customers.

During a recession, leverage social media for your ecommerce business by focusing on cost-effective marketing strategies such as the following:

  1. Targeted advertising
  2. Engaging with customers through interactive content
  3. Offering exclusive promotions
  4. Utilizing user-generated content to build trust and foster customer loyalty
  1. Diversify Your Product Line

Diversifying your product line can help your eCommerce business stay afloat during tumultuous economic times. Here’s how you can diversify your product line:

Identify Trends

Keeping your finger on the pulse of emerging marketing chalenges and trends can help you identify new product opportunities.

During a recession or inflation, consumers may prioritize essentials, so consider branching into fast-moving consumer goods (FMCG) or necessities.

You can also find out the latest marketing trends and use that knowledge to update your strategy.

Explore New Markets

Expanding into new markets can help you reach a wider audience and mitigate the effects of a weak economy. Consider selling internationally or entering a new product category.

When it comes to eCommerce in recession, competition can increase due to the dwindling demand. This can lead to price wars or other strategies that may hurt businesses in the long run. You can learn how to outsmart your competition in our recent post.

Offer Customization

Customizing your products can help differentiate you from competitors and increase brand loyalty. Give your customers the opportunity to personalize their purchases.

Here are some ways to do that:

  1. Unique Branding: Stand out with a distinctive brand identity.
  2. Personalized User Experience: Tailor experiences for each customer.
  3. Flexible Product Options: Offer customizable choices for products.
  4. Customizable Pricing and Discounts: Create personalized pricing and discounts.
  5. Localization: Adapt to different languages and regions.
  6. Customized Shipping and Delivery: Provide tailored shipping options.
  7. Interactive Product Visualization: Enhance product experience with interactive visuals.
  8. Social Media Integration: Engage customers through social media features.
  9. Seamless Checkout Process: Simplify the checkout experience.
  10. Responsive Customer Support: Provide prompt and personalized customer assistance.
  1. Focus on Customer Service

Providing excellent customer service can help your eCommerce business stand out from the competition. It can also lead to increased customer loyalty and retention, which are essential during tough economic times.

Here are some tips for improving your customer service:

Be Responsive

Responding quickly to customer inquiries and complaints can increase customer satisfaction and prevent negative word-of-mouth.

To ensure responsive customer service:

  • prioritize timely communication
  • offer multiple channels
  • clearly display contact information
  • establish service level agreements
  • empower support staff
  • utilize automation
  • proactively communicate with customers.

Offer Flexible Payment Options

Providing multiple payment options can make it easier for customers to purchase items and give them greater flexibility. Consider offering payment plans or financing options.

Personalize the Shopping Experience

Personalizing the shopping experience can increase customer retention and loyalty. Consider offering recommendations based on past purchases or creating personalized product bundles.

How to Run Your eCommerce Business During Recession and Inflation 

When the economy is unstable, businesses have to go out of their way to keep their customers. High churn rates can spell disaster for any business, but there are eCommerce customer retention strategies you can implement to keep your customers coming back for more.

Here are eight tips to keep you successful in eCommerce during recession:

  1. Prioritizing the right metrics

Businesses must prioritize metrics that reflect customer satisfaction and engagement. Below are some common metrics:

Net Promoter Score (NPS)

This is a metric that measures customer loyalty and satisfaction with a company’s product or service. It is calculated by asking customers a single question. “On a scale of 0 to 10, how likely are you to recommend our product or service to a friend or colleague?”

Customer retention rate

It measures the percentage of customers who continue to do business with a company over a given period of time.

Customer lifetime value (CLV)

This is the amount of money a customer is expected to spend on a company’s products or services over the course of their relationship with the company. It takes into account other metrics:

  • average purchase value
  • frequency of purchases
  • duration of the customer relationship

By monitoring and improving key metrics, you can build strong relationships with customers. You will also increase your chances of retaining them.

  1. Marketing with empathy and encouragement

During difficult times, customers are looking for empathy and encouragement. Businesses can do this by putting an emphasis on messages of support and positivity in their marketing.

Take a look at this example of empathetic marketing by Milepro. 

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Start by highlighting the ways in which you can make a positive impact in their lives. Include these highlights as part of your brand message. They should resonate with your customers and help build deeper connections.

  1. Implement a rewards program

Rewards programs can be a powerful tool for retaining customers. Businesses can encourage customers to stick with them by giving them discounts, special deals, or early access to new products or services.

Rewards programs can also provide valuable data on customer behavior and preferences. They can help you tailor your marketing efforts to better meet their customers’ needs.

  1. Product discounts or freebies

Discounts or freebies can be a powerful way to keep customers coming back. They show that you want to help them beat the current economic problems.

This simple gesture can get people to buy from you again and again. You also get free word-of-mouth marketing if your discounts are juicy enough.

  1. High quality products or services

Providing good products or services is, of course, the best way to keep customers coming back. Focus on quality and customer satisfaction.

They will help you build a good name and keep customers. Even when times are tough and people have less spending power, your business will still stand out.

  1. Being there’ for customers in challenging times

In times of economic uncertainty, customers may have questions or concerns about their purchases or the future of the business.

Being available and quick to answer questions builds trust. That is how customer service can foster customer loyalty in economic instability.

You can try the following techniques:

  • Optimize communication channels
  • Streamline processes and procedures
  • Implement self-service options
  • Use automation and AI technology such as chat bots
  • Train and empower employees
  • Continuously gather and analyze customer feedback for improvement opportunities

If you run an ecommerce business, you can gather feedback after every delivery using Trackmage. Do this to improve the post-purchase experience for your customers.

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Want to learn more? Check out our post on ways to boost customer service.

  1. Deepen your personalization

Personalization is key to retaining customers. Tailor marketing messages to the specific interests and preferences of individual customers.

You will create a more engaging and meaningful experience that way. This can lead to higher satisfaction and, ultimately, higher retention rates.

The following tools can help:

  1. Customer relationship management (CRM) software
  2. Marketing automation software
  3. Data management platforms (DMPs)
  4. Content management systems (CMSs)
  5. Personalization engines
  6. Artificial intelligence (AI) and machine learning tools
  7. Website and mobile app analytics tools
  8. Customer feedback and survey tools
  9. Social media management tools.
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  1. Be flexible

Finally, businesses must be flexible in the face of economic instability. This can mean any of the following:

  • Adjusting prices
  • Pivoting to new products or services
  • Finding new markets to target.

When the economy is bad, businesses can survive and even do well if they can adapt quickly to changes in the market.


eCommerce and recession will remain relevant talking points for years to come. Now that you know the impact of inflation on the economy and your business, you can come out on top.

To maintain customer loyalty in economic instability, you have to put yourself in the client’s shoes. Understanding their situation will help you make better decisions. So, when you use the tips in this article, keep your customers’ feelings in mind.

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