By Tony Preedy, Managing Director of Fruugo

As Christmas edges closer, several factors – including the cost-of-living crisis, rising inflation, and continued disruption to supply chains – are causing increased pressure on retailers during their busiest trading period of the year. Consumers too are having to contend with economic uncertainty due to financial constraints, and this is impacting their purchasing decisions with almost a third (28 per cent) of shoppers planning to spend less this holiday season*. With this in mind, it’s important for retailers to reflect on their business strategies.

Accessing new audiences 

At a basic level, sellers want their products to be seen by as many potential customers as possible, especially during this busy shopping season. By listing products on marketplaces, retailers are able to diversify their selling channels and access more audiences. The greater the number of marketplaces that list a seller’s products, the greater the seller’s presence online, which, in turn, leads to more sales. 

With the festive season being a key trading period worldwide, cross-border ecommerce is a key avenue for retailers to broaden their audience. Rather than relying exclusively on limited local demand, it allows sellers to tap into international demand and access more potential customers.

Marketplaces that specialise in overseas selling are key to facilitating this. Indeed, cross-border marketplaces are not only a cost-effective and efficient means of reaching a broader, international audience, but they also oversee the majority of the technical work, and support with localised product marketing. In most locations, they are also responsible for translations, provide multi-lingual account management and customer service to support too. They can also implement local payment providers, carry out the currency conversion and screen for counterfeit activity.

Many of these cross-border marketplaces offer a no-sale, no-fee model, meaning that sellers can connect with new customers on a worldwide scale and reap the benefits, with zero risk to their business. 

Managing inventory 

Now more than ever, effectively managing inventory is key for ecommerce sellers to succeed. Given the meteoric rise in online retail driven by the global Covid-19 lockdowns, the post-pandemic shopper has become much savvier in their retail habits. Whereas previously, customers were more loyal to their favourite brands, consumers are now more agnostic about the seller and are instead driven by convenience, availability and price. If one seller cannot provide what they want when they want it, customers simply find an alternative seller with that product in stock using search engines.  

Therefore, retailers must be cunning about where and how they market their products in the pursuit of turning inventory into revenue. The competitive nature of peak trading season makes this even more significant. 

Utilising product data 

Discounts are a key driving force for consumers, especially when they are Christmas shopping for multiple friends and family members during a challenging economic climate. However, due to the ongoing financial difficulty that many businesses are experiencing this year, most will not be able to reduce their prices to prompt sales as they would normally. 

In fact, indiscriminately lowering prices in an attempt to drive purchases is likely to significantly harm most retailers’ profits. While online sellers can be much more flexible and targeted in how they optimise trading by adjusting prices, few businesses correctly calculate the impact on gross margin from selling at lower prices, or the huge number of units required to maintain their income. Sellers seeking a more profitable peak trading period should avoid discounting and be sure to communicate this with customers. 

With the financial pressures that businesses are currently under, retailers will need to decide between focusing on profits in the short term versus long-term growth. Thorough data analysis is therefore crucial so that they come to the right decisions for their business. Inevitably, prices will rise as a result of inflation in the short to medium term so, in order to clear inventories, retailers should prioritise widening their audience to tap into more potential customers overseas. By listing products at full price on cross-border marketplaces, they can generate more sales from units that bring maximum profits, rather than having to decrease prices in their domestic markets. 

Overall, marketplaces can be hugely supportive to sellers, helping them to reshape their strategies and raise profits and turnover. Utilising existing assets, such as inventory and current infrastructure, and broadening reach to a worldwide customer base can be an incredibly effective remedy to dwindling local demand. In the long run, businesses need to grow their audience to sell more of their products and going global does just that. Marketplaces that specialise in cross-border trading streamline this for sellers, allowing them to focus on performing during peak trading season.