Reduce costs and increase profits without compromise. All while accessing a deeper, wider talent pool.
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Its low living costs and first-class education system are just the beginning. See why the Philippines is the best offshoring destination.
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Offshore staffing has a bevy of benefits, not least the potential for up to 70% cost savings.
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Outsourcing an entire department or division in your business can lead to major efficiency gains. For successful team structures, local market recruitment advice and suggested staff to leader ratios, select one of the common teams that can be easily outsourced to the Philippines below.
Outsourcing is a very versatile strategy suitable for businesses of all shapes and sizes. Below are common industries that have successfully implemented an offshore model. Get local insights relevant to your area of specialization, learn what others have done in your industry and leverage their experience.
The headlines tell the story. “eCommerce stocks plummet as consumers pull back on online spending.” “New data underscores a slowing eCommerce market.” “What happens when the eCcommerce boom ends.” After two years of pandemic-inspired lockdowns and social distancing restrictions, the world is returning to normal and that includes shoppers showing a growing enthusiasm to head back to brick-and-mortar stores.
That spells trouble for eCommerce-focused retailers who have experienced unprecedented growth in recent times. Having accounted for only 17.8% of global sales in 2019, online purchases soared during the pandemic to hit an expected 21% during 2022. However, the COVID boom was always going to end and it is increasingly clear that day is upon us as customers spend just as much time walking into physical stores as they do scrolling in virtual ones.
To further complicate matters, inflation is rising across the globe and fast becoming a concern for not only economists but the average person. Recent evidence shows consumers are spending less as they prioritize needs over wants and, combined with foot traffic returning to retail centers, it is no surprise stocks in eCommerce companies have slumped in recent weeks. The share prices of online retailers Wayfair, Etsy and Shopify recently experienced double-digit falls on the same day, with even eCommerce giant Amazon issuing a bleak forecast after logging its slowest revenue growth since the dot-com bust in 2001.
The conundrum facing eCommerce retailers was summed up by Etsy Chief Financial Officer Rachel Glaser who, in a recent earnings call revealed the company’s net income had fallen 40% compared to the previous year, said: “Consumers have less disposable income and many more places to spend it.”
As any successful entrepreneur knows, the key to long-term survival is to never stand still. While the current negative forecasts are concerning for eCommerce retailers, it is those who are willing to think outside the square, be proactive and embrace new ideas who will navigate any potential downturn and emerge stronger when the good times return.
When it comes to navigating a post-COVID downturn, here are five tips that will help eCommerce executives and their teams continue to stand the test of time.
It is no secret that keeping the right customers is a one-way ticket to eCommerce success. Countless studies have shown that acquiring a new customer is more costly than retaining an existing one, with Harvard Business Review identifying that cost at anywhere from five to 25 times more depending on one’s industry. Rather than needing to dedicate time and resources to finding a potential new client, it is much more economical to concentrate on keeping a current one happy.
A smart way to retain existing customers is to embrace the use of loyalty programs or discounts for those who return. Consumer engagement is crucial in the modern retail world and loyalty programs not only encourage customers to shop more but help nurture an ongoing relationship with them.
Many online retailers are also going the extra mile by developing bonus point programs that reward customers for writing positive reviews or recommending their products and services to others. Subscription-based models are also on the rise, given their ability to inspire happy customers to develop repeat purchase habits, which obviously leads to recurring revenue.
Marketing is the lifeblood of any retailer, with the modern communication landscape meaning there has never been more ways to reach potential and existing customers. That said, SMS marketing is a must for eCommerce operators given it doubles as an everyday communication channel for all generations and is an opt-in marketing channel, which means those receiving the messages have put up their hands to receive them.
The popularity of smartphones means the technology is an incredible opportunity to reach customers. One UK study even revealed one in 10 millennials would rather sacrifice a finger than live without their smartphones and while that is somewhat disturbing, it highlights the ability of one of the oldest smartphone mediums – SMS – to provide a direct line of communication with an online retailer’s audience.
A recent marketing study found that SMS marketing is booming among eCommerce brands, with a 376% increase in promotional sends in 2020 followed by a further 75% rise last year. Click rates for SMS messages also jumped in 2021 and resulted in a 106% increase in orders compared to the previous year. These results highlight why more and more eCommerce stores are embracing SMS messages to engage customers and drive them to buy.
Partnering with an outsourcing provider is one of the most effective ways for eCommerce businesses to reduce costs, increase efficiency and remain competitive in a changing world. Once associated mainly with customer service support, the outsourcing industry has evolved to become a multi-billion-dollar market that caters to multiple sectors and provides an array of services including administrative, technology and accounting support.
When it comes to quality and efficiency, outsourcing providers can connect online entrepreneurs with experts who boast specialist skills and levels of commitment often exceeding in-house employees. This includes enhancing website development and design, setting up inventory management software or improving recruitment and HR processes.
Reduced costs is another obvious benefit of outsourcing, with destinations such as the Philippines allowing companies in Western nations such as the U.S. and UK to tap into labor cost savings of up to 70%, along with the benefits that come from not needing to pay for additional infrastructure such as new offices or equipment. The Philippines, which boasts a 97.5% literacy rate, also has a huge talent pool of well-educated and highly committed workers, many of whom are among the 680,000 people who graduate from university each year.
Here is a statistic to send a shiver down an eCommerce retailer’s spine - almost 70% of eCommerce customers never complete their purchases. That was the finding of independent web UX researcher Baymard Institute when it tracked global cart abandonment rates for 12 years, meaning that for every $300 a retailer earns, about $700 is left on the virtual counter. Ouch!
While cart abandonment may be a common eCommerce market trend, every effort should be made to ensure it is minimized as much as possible and that is where chatbot technology is playing a pivotal role. From tackling simple FAQs when customers need more information before pressing the purchase button to reminding an online customer that their cart has been dormant for a period, traditional and AI-powered chatbots are helping mitigate the extent to which cart abandonment occurs.
Conversational AI has also reached the point where it can understand user preferences, answer unique questions and recommend alternate or complementary products, thus allowing online shoppers to feel engaged during the sales process. This includes them being programmed to automatically interact with a potentially conflicted customer if they have spent a certain amount of time online without making a purchase.
Strategies to tackle cart abandonment rates also do not necessarily require high-tech innovations. One of the simplest ways to increase sales during an eCommerce slowdown is to waive or reduce shipping fees, which may result in a small hit to the hip pocket but is offset by the wider imperative of maintaining sales in hard times. Likewise, offering a click-and-collect or buy-online-pickup-in-store model (aka BOPIS) can provide another reason for shoppers to continue online shopping in the current environment.
When online sales boomed during the early weeks of the COVID pandemic, eCommerce operators faced the challenge of quickly sourcing staff to meet demand. Now, with sales slowing and budgets under pressure, those same companies find themselves at the other end of the resourcing spectrum – deciding how to manage more staff than they may need in the foreseeable future.
Too many online businesses make the mistake of scaling their staff numbers up and down without considering the best resource for doing so efficiently and cost-effectively. Just as an outsourcing partner worries about many of the headaches associated with recruitment, infrastructure, software, office space, IT support and data shortage in boom times, they make it easier for organizations to scale back their staffing level when they are no longer needed.
Be it addressing unexpected COVID booms, inevitable post-pandemic slumps or meeting seasonal demands each year, outsourcing is a smart way for eCommerce retailers to recruit as it allows them to get new team members onboarded and working in as little as six weeks and scale back without the cost of hefty payouts and unused office space and equipment.
No one wants uncertainty in their working life, let alone when they are responsible for running the entire show. The combination of a post-pandemic world and rising inflation means there is plenty of uncertainty for eCommerce executives and managers at present but, as with so many things in life, there is another way to look at the situation.
Uncertainty can force us to think outside the square and consider whether there are better ways of doing business. Boom times are all well and good but it is how we navigate the downturns that determine whether a venture has true longevity. As you can see from the tips above, the current market offers the eCommerce sector a golden opportunity to try new things, reinvent old ways and set themselves for the next boom.
The best eCommerce businesses have a dedicated strategy for providing the service their customers deserve. Discover six reasons why outsourcing specialist customer support can take a huge weight off one’s shoulders, particularly for fledging eCommerce entrepreneurs operating on tight budgets.
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