Economic Slowdowns Can Be Golden Opportunities for eCommerce Brands

Ron Dodby Ron Dod

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Amidst a global pandemic and financial uncertainty, tensions are currently running high for nearly everybody. As the stock market continues to fluctuate wildly and news updates come in by the minute, many business owners are bracing themselves for the potential of hard economic times.

As the threat of falling sales approaches, marketing is often one of the first budget items to be downsized, whether or not that is the best step for the organization. This is evidenced by marketing behaviors exhibited after the 2008 recession, where U.S. ad spending dropped by a full 13 percent.

After all, if no one is buying, what is the point in marketing products?

This mindset is a grim mistake.

This assertion of miscalculation is also borne out by the aforementioned 2008 data as online advertising only decreased by a marginal two percent. The reason for the comparatively minor decrease is that during tough times, it is actually wise for brands to invest in digital marketing–particularly with the circumstances that are playing out at this moment in time.

But before we dive into how today’s situation can benefit eCommerce retailers in the long term, let’s take a moment to study the history books to understand that marketing amidst financial uncertainty is not an option for retailers, but a prerequisite for business growth.

A Short History of Marketing in Challenging Times

The fact of the matter is that when the market contracts, so do many sellers’ marketing budgets. However, those who push against the stream and take bold steps in the face of uncertainty are the ones that reap the most significant rewards.

Taking a cursory look at advertising in a recession over the past 100 years, it is clear that those who did not cut their ad budget, but either stayed the course or increased their budgets, came out the other end in much better shape than those who recoiled into relative safety.

For instance, during the recession of 1923, advertising executive Roland Vaile tracked 200 different companies. In 1927, he reported that those who had continued their advertising efforts were 20 percent ahead of where they were pre-recession. Alternatively, those who contracted were down seven percent.

Similarly, in the midst of the Great Depression, Kellogg’s displayed the virtue of strength, doubling its advertising budget. Meanwhile, the cereal market leader of the time, Post, cut its marketing efforts. As a result of the dynamic, Kellogg’s grew profits by 30 percent and became the market leader for many decades.

In mid-century, as the Advertising Specialty Institute reports:

“Buchen Advertising tracked advertising dollars vs. sales trends for the recessions of 1949, 1954, 1958 and 1961. They found that sales and profits dropped at companies that cut back on advertising and that after the recession had ended, those same companies lagged behind the ones that maintained their ad budgets.”

In the 1980s, McGraw-Hill Research studied 600 B2B organizations, ultimately discovering that those who preserved or increased their marketing budgets “grew significantly…both during the recession and the following three years.” In fact, by 1985, those who invested heavily in their marketing strategies had grown by a whopping 275 percent over those who hunkered down and shied away from such boldness.

Then, during the recession of 1990-1991, McDonald’s opted to cut its marketing budget. Both Pizza Hut and Taco Bell saw this as an opportunity to capitalize, staying the course with their promotional pushes. As a result, Pizza Hut and Taco Bell increased sales by 61 percent and 40 percent, respectively. Meanwhile, McDonald’s saw sales decline by 28 percent.

At this point, you may be thinking that the 20th century was a different time and that digital marketing has changed everything and that these lessons are no longer applicable.

Think again!

In the depth of 2009’s “Great Recession,” Amazon grew its sales by 28 percent. At the same time, Netflix blazed a new trail, gaining three million members at the lowest point of this century’s recession, thereby increasing stock prices by 57 percent.

Similarly, Lego began to expand into the global market in 2009, pushing out massive marketing campaigns in Asia and Europe, ultimately increasing profits by 63 percent and reaching a personal best for profitability.

There are tons of other examples of businesses that have learned to thrive through economic contractions.

While some readers likely have an idea as to how these businesses bolstered profits in the middle of a recession–or worse, an outright depression–let’s take a moment to break down the exact dynamics at play in such situations.

Why Bold Brands Benefit During a Downturn

The fact is that there are several driving forces behind why brands that continue to advertise and market their products during a recession tend to benefit in the short and long term.

Several of those reasons include:

Minimal Competition

When it comes to advertising on Google, running dynamic Facebook ads and the like, during hard times fewer businesses will be utilizing these tools. Those that do still run ads are likely to cut back on their campaigns significantly.

This means that the amount of competition in a company’s niche can drop considerably, thereby allowing retailers to capitalize on the lack of eCommerce marketing and get their products in front of those who are ready to buy.

At the same time, since fewer brands will be marketing, the cost of ads is likely to drop, which creates a buyer’s market for advertisers.

Therefore, merchants can get more exposure for less money, which can allow them to grow their business.

Maintained Awareness

During an economic downturn, visibility is a necessity for retailers. However, when such an instance occurs, many businesses instinctively cut their marketing budget, thereby losing their ability to stay top-of-mind with consumers. This ultimately results in lost sales.

Brands that display fortitude and go against the grain end up increasing their memorability with consumers in such times. Plainly put, customers are more likely to shop with businesses that they readily remember.

By consistently engaging consumers with adverts, content that drives revenue, social media posts and the like, brands make themselves memorable.

A Presence of Strength and Stability

One of the primary advantages of continued marketing throughout an economic downturn is the ability to cultivate a perception of company strength and stability.

By maintaining a strong online presence through a cohesive SEO and PPC strategy, content marketing, social media engagement, and other essential marketing elements, a brand shows that it is sturdy enough to weather the harshest of storms. Consumers will be more likely to spend their money with a company that outwardly displays such strength and resilience as it is more likely to provide quality products than some no-name company that just entered the market.

By continuing to engage in digital marketing through rough times, businesses stand to distinguish themselves from the competition, as we saw in the previous section.

With this understanding, let’s explore how all of this information relates to today’s current circumstances and how eCommerce retailers can bolster their brand’s bottom line by investing in digital marketing.

Coronavirus Moves More Shopping Online

Right now, the coronavirus pandemic is on everyone’s mind.

As the news continues to pour in, increasing numbers of people are avoiding public places. In fact, as Coresight Research data indicates, 28 percent of U.S. internet users have already begun avoiding public areas and travel. Meanwhile, another 58 percent claimed that they planned to do the same if the situation escalated.

Unfortunately, since this data was collected, the situation has indeed worsened as President Trump stated that gatherings should be limited to 10 people. Similarly, Nevada Governor Steve Sisolak has ordered all nonessential businesses to close for 30 days. Similar measures are being taken all across the country.

However, despite these circumstances, consumers are still shopping. They have simply moved their activity to the realm of eCommerce.

As Digital Commerce 360 reports:

“Although the coronavirus concerns began ramping up in the United States last month, retail spending didn’t appear to take an immediate hit. U.S. nonstore retail sales increased 8.2 percent year over year in February, according to a Digital Commerce 360 analysis of U.S. Department of Commerce advance monthly figures released Tuesday… Retailers and vendors have reported surges in eCommerce sales for groceries, cleaning products, personal hygiene items, and medical supplies.”

As the coronavirus continues to impede daily life in the United States and across the world, increasing swaths of consumers will shift their day-to-day shopping activities from physical environments to digital marketplaces. It is worth noting that online retailers are also likely to see an uptick in orders placed by older customers who are most susceptible to the impacts of the virus.

Additionally, these circumstances are also likely to influence omnichannel commerce (such as purchase online, pick up in-store) as individuals continue to practice social distancing.

However, it is worth noting that such developments could overwhelm eCommerce logistics chains, thereby necessitating a reevaluation of order fulfillment and delivery strategies. In fact, this is already being seen as Amazon has suspended shipments of nonessential items to warehouses for the time being.

With a clear picture painted of how and why brands thrive through economic instability, as well as how eCommerce merchants could prosper through today’s circumstances, let’s go ahead and explore the exact steps that merchants should take moving forward.

Next Steps for Online Retailers

There are three primary actions that sellers should take in the weeks that follow. Those measures include:

Analyze and Track Everything

One of the most significant advantages of digital marketing is that it allows merchants to harvest precise, measurable data from their campaigns to determine exactly how effective they have been in achieving a predetermined goal.

However, to accurately assess a marketing push’s performance, retailers must understand how to collect data that is actually valuable. This means employing tools like Google Analytics Enhanced eCommerce feature, heat maps reports, PPC performance summaries and similarly informative components as these are critical to determining how a brand should spend its budget moving forward.

During a downturn or recession, understanding the exact profitability of each campaign type is the key to growth. The fact of the matter is that thanks to the tracking and reporting capabilities available, digital marketing is the best low-cost, high-return strategy for eCommerce retailers.

The objective here is for retailers to analyze their eCommerce marketing strategies and establish what kinds of returns are being generated by each tactic.

Focus on Existing Customers

No matter which niche eCommerce retailers reside in, customer retention strategies will undoubtedly be one of the most beneficial aspects of digital marketing under economic pressure.

Plainly put, acquiring new customers costs five times more than retaining current ones. Moreover, the majority of a brand’s revenue tends to come from the most loyal 20 percent of its user base.

Additionally, getting existing customers to make a new purchase is far easier than converting a prospect. Therefore, ensuring that marketing efforts are geared towards a business’s most valuable ride-or-die buyers is the ticket to success amid uncertainty.

To push profits upward during a downturn requires brands to invest heavily in catering to their existing audience through building a loyalty program, providing perks and rewards, exhibiting superior customer service and similar efforts that help to ensure a premier experience for shoppers.

In addition to these tactics, retailers should also aim to retain their current customers through other digital marketing techniques such as:

  • Marketing Automation: A robust, automated eCommerce email marketing strategy is an ideal method for keeping customers engaged and the brand top-of-mind. Moreover, email marketing still provides one of the highest ROIs of all digital marketing methods. Thanks to segmentation and personalization tactics, email can be a powerhouse for driving sales in tough times.
  • Content Production: eCommerce content marketing is a critical component for earning visibility in the SERPs, educating consumers and inspiring conversions. Content is an ideal vehicle for informing shoppers about what sets a brand apart from the competition, particularly in times when consumers will spend more discerningly.
  • Social Engagement: Social media has essentially become the central hub of the internet. Places like Facebook, Instagram, and even TikTok are ideal for advertising products to target audiences. Moreover, these portals can be utilized to harvest customer feedback, user-generated content and other valuable assets to improve a brand’s marketing efforts.

However, to truly prosper during challenging times doesn’t just mean using the right tools, platforms, and tactics. It also means being wise with one’s resources.

Focus on Organic Marketing

Organic marketing such as Search Engine Optimization (SEO) can provide an incredible high return on investments for eCommerce merchants.

Even though your sales may drop from organic channels such as SEO, influencer marketing, YouTube videos and more, it doesn’t mean this will hold true forever. During economic downturns, it’s an ample opportunity to build new relationships with influencers, build higher search engine rankings in Google and more to take advantage of your competitors not investing in organic marketing. 

When the economy comes around, eCommerce merchants who continued investing in organic marketing will be in a much better place to take advantage of these customer acquisition channels. 

Also, it’s worth mentioning that just because you have been investing in organic channels before that those wins will carry you over through the down slump. Organic marketing is referred to as a snowball for a reason–it continues to build upon itself. Pausing or worse, completely stopping, those efforts can be detrimental in the long term and force companies to start back from the beginning when they pick it back up. 

Continue to Invest in People and Technology

During economic slowdowns, such as this, it can be tempting to turn off marketing initiatives or downsize them. This mindset can also apply to people and technology. This panic can be a grave mistake.

If the supply chain and product availability have not been negatively impacted, it is advantageous for eCommerce merchants to invest more in its people and technology. The same factors that apply to marketing apply here. During times like these, there is minimal competition, maintained awareness and strength and stability.

While other organizations are not taking this as an opportunity to invest in technology or hire top tier talent, this can be an excellent time to invest in both to make your eCommerce business stronger. Especially when it comes to technology, now is a great time to achieve better pricing and terms than your competitors.  Many B2B SaaS and service companies are offering heavy discounts for their merchants to help them weather the storm.

At Visiture, we’re currently offering any merchant interested in our marketing services the first month free. Many of our partners are doing the same – or similar. Plus many SaaS and service companies will have ample resources allocated to onboarding so you can begin services with minimal competition.


If history has taught us one thing, it is that those who take bold risks reap massive rewards. This is evident time and again in business and all other areas of life.

In terms of the potential for an economic downturn, the bottom line is that an eCommerce business can march steadfastly into uncertain times and come out ahead on the other side.

However, to do so, it is necessary to have the courage to continue investing in digital marketing strategies, tactics, tools, and agencies that will be capable of helping to navigate the waters and finding prosperity.

If your brand is ready to blaze a trail into the future and set itself apart from less audacious competitors, know that Visiture is offering one free month of marketing services for eCommerce businesses impacted by the coronavirus pandemic.

Together, we can catapult your brand to new heights of market dominance.

Join 150+ Leading eCommerce Brands

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