More people than ever are shopping online since the coronavirus outbreak changed the way we live our lives.
Social distancing and societal lockdowns mean stay-at-home orders are up for businesses around the world — from online retailers like Amazon to online grocery suppliers such as Walmart and everything else in between.
This has seen enormous sales growth in the ecommerce industry, with China becoming the first country where more than 50% of its retail is now conducted online.
However, while total retail figures and online orders might be up, plenty of digital companies are feeling the pinch from COVID-19 and need to make savings to stay afloat.
We’ve highlighted five ways you can do this and the table of contents lists them in brief:
- End brick and mortar commitments
- Bin unneeded digital licences
- Evaluate your product offering
- Introduce time tracking software
- Employ behaviour monitoring tools
We’ve expanded on each of these below, recommending tools and strategies to help you implement them into your business.
Strip away your brick & mortar commitments to save cash
On the face of it, brick and mortar might not seem like the biggest issue in digital commerce. Your company is online and your products are sold through your website, not via a physical till (as happens in department stores).
But we’re not talking about a department store. We’re talking about your office space — the building you used to conduct your business from, which the pandemic has shown you no longer need and that’s now a meaningless drain on your finances.
Offices are one of the greatest overheads for any business. Just to start, there is:
- Rent
- Electricity
- Insurance
Not to mention a whole host of other things you have to pay for to keep them in operation.
Strip away this expense and go fully remote, following the model used by these companies to easily manage your teams. Do so and you’ll find your ecommerce business saves money now and long after the pandemic has ended.
Pull the plug on any of your unnecessary digital licenses
Wastage is something that affects all businesses — even the best of them — at some point. Much as people do with gym memberships, you sign up for a product with the best of intentions and either don’t use it at all or fail to get value for money from it.
If you want to save money while we’re in the midst of the coronavirus crisis then you need to cut out the wastage — and digital licenses are a prime candidate for the chop.
Of course you need digital tools, but only the ones that make running your business easier and more efficient. A great way of highlighting which ones these are is to conduct a survey and ask your employees:
- What tools they use
- Why they use them
- How often they use them
The survey will help you in a couple of ways. Firstly, the “what” and “how” will highlight any tools that aren’t being used at all. Secondly, the “why” will let you see if there’s any possibility of ditching multiple tools and replacing them with a compact, singular option that does what’s needed.
Conduct this survey as soon as you can and then serve notice on your unnecessary digital license. Once your contracts end, you could find you make a series of small savings that add up to a lot of money for your company.
Assess your product offering and can those that aren’t selling
Your products are the reason you have a business. They are what brings in your ecommerce sales and puts money in your company account.
But your products only do this if people buy them — and one thing that’s clear from the coronavirus pandemic is that online shopping habits have changed. This has broadly benefited retailers but it’s not all been good news, with the beauty industry hit hard by COVID as shopping behaviour changes during the pandemic.
Some of your products will naturally be less popular (as in any business) and you might now be selling items that cost you money in (at least) these three ways:
- Making
- Marketing
- Monitoring
All of these things cost money, and if that doesn’t go solely towards products that are turning a profit then it’s money wasted. The flipside is that if you stop selling these items then you’ll save the cash allocated to those three things.
You can find out which items to bin by reviewing your online sales figures, assessing which items are spiralling downwards and then cutting them from your product offering. It’ll be easy to spot the savings on making these goods but marketing and monitoring might be trickier. However, what you will notice quickly is that you have extra resources available, which is certainly a reduction.
Use time tracking software to get the most from your resources
Your employees are your greatest asset. They keep your business running by earning and processing online sales for you. Of course, they’re also your biggest expense because you have to pay them.
If you want to make savings during coronavirus then you need to make sure your staff are providing value for money. And you’ll need to make some changes to ensure this is the case.
No, no — we’re not suggesting you fire a bunch of your staff. This would suck the heart out of your company and erode its ability to generate revenue — not to mention the fact that it’s pretty heartless during the coronavirus pandemic.
However, what we are saying is that you should use time tracking software (like HourStack or Toggl) to make sure their resources are allocated properly. This is where:
- You can see if the right people are on the right tasks
- You can find out if there’s any doubling up of work
- You can learn how long tasks are really taking
How does all this data save you money? Like this. Firstly, you can assign tasks to the people who can complete them most efficiently, so more work can be done. Secondly, you remove any duplicate entries, so you’re not paying twice for the same things. Finally, if tasks are taking longer than expected, you might need to increase your prices to accommodate for this.
By allocating your resources effectively you can make sure you get the most out of your employees and help put your company in a better financial position.
Use behaviour monitoring tools to aid your fulfilment process
Fulfilment is integral to ecommerce businesses. It’s the part of the process that gets items to your customers, completing the online sales journey.
But it’s also a significant expense for those companies with an in-house delivery team, and it’s one where you could be losing money in the long term due to bad behaviour. What are we talking about? Let us explain.
When your delivery team takes an item to your online shoppers they use a company vehicle. This is an expense that’s accounted for. What’s not necessarily accounted for is how their driving impacts on the longevity of your vehicles. How? By driving in such a way that it increases the wear and tear on your automobiles. Behaviour monitoring tools (such as telematics) can help you to spot bad driving and increase the lifespan of your vehicles. Here’s how:
- You can see if your drivers are driving too quickly
- You can find out if your staff are taking corners too sharply
- You can learn if your employees are braking too harshly
All of these things can lead to wear and tear, costing you on repairs and replacements. They can also cost you more in fuel — again, hiking up the price of each delivery. By using telematics software you can save money by keeping your delivery vehicles on the road for longer.
But that’s not the only benefit of using behaviour monitoring tools. You also need to keep in mind that having vehicles out of action (while being repaired or replaced) creates supply chain issues. This means that these tools not only save your money but they also ensure you keep your promise to your customers of delivering their goods on time.
Treat COVID-19 as a chance to introduce regular reviews
We close not on a tip so much as a pause for thought. Coronavirus has changed the world and its effects will be felt long after it is brought under control and eradicated.
It has forced changes in our behaviours — and one of the key lessons you should take from this as an online retailer is that you should conduct regular reviews of your business.
Because while you might think everything is ticking along nicely, we guarantee there’s always at least one way you can save money.
So, whether it’s during your first quarter, after six months, when you reach the autumn of your business year or at the final part of your company calendar, conduct a review of your operations. We’re certain your finance team will be pleased with the results.
