When economic times are hard, consumers (and businesses) get scared and spend less. For instance, right now there are several drivers for lower consumer spending:
- Fear of job loss (due to outsourcing, offshoring, etc.)
- Continued drop in incomes (lower wages, higher health insurance costs, higher energy prices, etc.)
- Overall social/political environment (risk of terrorism, war in Iraq, lack of a clear plan on economy from either political party, etc.)
- Pay more attention to those consumers that are shopping. Treat them better than ever before, offer past-customer only discounts, followup individually to find out how satisfied they are with their past purchase, etc.
- Develop a strategy to increase order size.
- Offer credit for purchase of large-ticket items.
- Online commerce option. As consumers spend more time at home and surf the Internet (and not go to the mall and make impulse purchases), give them the choice to make impulse purchases while they surf the web. It is a good time to invest in your website and making it ecommerce-enabled. (Related article: eCommerce for small businesses)
- Pass on the savings from ecommerce to your customers in form of free shipping.
Related article: How to develop a new strategy when consumers don't spend