Covid-19 has created a watershed moment for e-commerce, putting it firmly at the forefront of retail in Singapore and the rest of Southeast Asia.
According to the e-Conomy SEA 2020 report by Google, Temasek, and Bain & Company, the pandemic has led to a 30% rise in new digital services users in the region. These are consumers who were not already purchasing, signing up for, or subscribing to digital services, but did so because of lockdown restrictions.
We love seeing business boom for our clients—many of which are small and medium e-commerce businesses. Here are a few tips for growing your business in a post-pandemic world:
1. Drive e-commerce traffic through organic marketing
With growth predicted to be uneven and likely to remain below pre-Covid-19 levels, e-commerce operators will have to continue tightening their belts post-pandemic by finding ways to drive traffic without buying ads.
For example, if you don’t already have a referral programme, now’s the perfect time to get one up and running. According to a joint report by Ogilvy, Google, and TNS, 74% of consumers depend on word-of-mouth referrals from friends, family, and online reviews. You can also beef up your SEO strategy to optimise your product pages for the right keywords.
Where possible, hold off on increasing your advertising spending and decide whether you can scale back your spending on certain advertising channels.
2. Leverage inventory forecasting for your online store
Forecasting will go a long way towards removing some of the uncertainty of your business’s future after the pandemic. By looking at past inventory data and reports and current market conditions, you can come up with estimates of seasonal demand. According to research by the Aberdeen Group, organisations with reliable sales forecasts are 10% more likely to grow their revenue year-over-year and 7.3% more likely to achieve quota.
For best results, we recommend investing in dedicated forecasting or accounting software. While it is possible to create forecasts using spreadsheet programs like Excel, digital accounting platforms like Xero, Fathom, and Futrli will make forecasting fast and easy. More importantly, these platforms lead to more accurate forecasts that use real-time data.
With your inventory forecasts in mind, you can then make informed decisions on how to control your supply chain costs.
Front & Center, a Singapore-based provider of sustainable Stasher bags, used inventory forecasting to weigh the costs of shipping stock via air and sea. Although sea freight was cheaper, longer shipping times meant that stock and working capital were locked for extended periods of time, significantly delaying cash inflow. This analysis of costs and timing led the company to decide that air freight as the better course of action.
3. Double down on digital initiatives such as digital payments
Research by McKinsey estimates that Covid-19 accelerated the economy’s digital transformation by at least seven years—and business leaders are taking note. For one, the pandemic has led to the forced adoption of digital banking in Southeast Asia. Kantar research shows that cash transactions declined from 48% before the pandemic to 37% when lockdown protocols kicked in.
E-commerce accounting teams entering a post-pandemic world will play a vital role in preparing their respective organisations’ readiness for virtual payments, whether through compliance and securing the necessary infrastructure to enable these payment methods.
For one, moving your workloads to a cloud-based accounting platform like Xero allows your sales, income, and purchase data to flow straight from virtual banks to your books. This eliminates the task of manually transcribing that data. You can also outsource functions like accounting and marketing to trusted digital providers that specialise in assisting e-commerce businesses. This will free up time and resources for your teams to focus on growth and recovery.
For example, one of our clients, local activewear brand Trybe Active has participated in several weekend pop-ups along with multiple other online lifestyle brands to promote their goods at a physical space. Banding together and collaborating with other brands has proven to be a trend that has worked well to boost sales during the pandemic for many small businesses. Trybe needed a solution to accept digital on-the-spot payments, and used HitPay to do so. Because their business was already supported on Shopify, Stock & Buy, and Xero, HitPay was easily and seamlessly linked with Xero.
4. Retain workforce changes
The productivity gains and cost savings of having teams working remotely provide a compelling business case for retaining your remote work policy after the pandemic. According to Global WorkplaceAnalytics, roughly 60% of employees see cost savings as one of the main benefits of a remote workforce.
Employee morale is another factor why remote work policies are so important. According to a survey commissioned by The Straits Times, eight out of 10 workers say they prefer to work from home or have flexible working arrangements.
As a business owner, it will be more important than ever to keep employees you know and trust in a post-pandemic world. Training and recruitment of replacing employees is time consuming and another added stress while getting your business running back at 100%
This doesn’t necessarily mean having a fully remote workforce—after all, face-to-face interactions are still arguably the best way to collaborate and build meaningful relationships. Your e-commerce business may be better off with split teams (one working on-site and the other remotely) or hybrid teams that are free to split their time between home and office
5. Create an e-commerce contingency plan for the next crisis
The Covid-19 pandemic is a perfect example of a black swan event—an event that’s unexpected but, in hindsight, was bound to happen at some point. Black swan events are also a reminder for business owners that disruptions can and will happen at some point or the other.
Take the time to look at your processes and plan for the next worst-case scenario or disruption. For instance, if you didn’t have a last-mile partner for cross-border e-commerce, consider looking for potential logistics specialists.
The better your preparations are, the better your chances of not just surviving but thriving during tough times.
Take advantage of “sticky” e-commerce habits
The good news for e-commerce businesses is that Covid-induced online shopping behaviours are unlikely to change even after the pandemic subsides. According to the same report, 94% of new digital service consumers intend to continue using digital services when things go back to “normal.” This is a good sign as the “stickiness” of behaviour changes largely depend on the satisfaction consumers get from the new experiences.
Be that as it may, while the digital acceleration caused by Covid is a boon for e-commerce SMEs, there’s still a lot of uncertainty about what life will look like in a post-pandemic world.
Will things go back to how they were in 2019? Will we continue to work from home after demonstrating that telecommuting works? How will online shopping habits change once we’re free to go back to brick-and-mortars? These are just some of the questions whose answers still evade us.
We’ve assisted with the accounts of many e-commerce businesses, so we know these questions are also in your mind. We hope that these tips will help ease some of that uncertainty so your e-commerce business can stay competitive and grow in the new normal.
Over to you
As an e-commerce business, it’s important to look beyond the chaos of the current market and reflect on what lessons you can learn from and apply in the near future. Now is as good a time as any to look at your company’s fundamentals and figure out how to make smarter financial decisions, whether it’s with your spending, investments, or overall business strategy.
If you want to digitise your business functions, start with your accounting processes. Get in touch with the Harvest Accounting team to learn how we can help simplify your accounting workloads.