| This 36 message thread spans 2 pages: 36 (  2 ) > > || |
|Who's been affected by the financial turmoil?|
| 10:30 pm on Oct 11, 2008 (gmt 0)|
This is my first year of doing ecommerce on my site. I had the summer doldrums that are typical for retail in my niche. In September I started to see sales really pick up, which got me excited.
For the last couple of weeks, though, sales are really off. I've been doing AdWords all year for some of the more profitable items, but setting a daily budget that almost always was consumed by about 10 pm. Now I find that there are so few clicks on the ads that I'm only consuming half of my budget. That's ok, though, since none of the clicks are converting.
I don't have any idea what to do, so I guess the solution is just to cut prices to the extent possible and wait things out. Given that I'm already one of the lowest-priced retailers for the limited number of products I sell, there's not much left to cut in price.
I know I'm not alone in this. What steps, if any, are you taking to address the problem?
| 11:32 pm on Oct 11, 2008 (gmt 0)|
I've had the same experience. Sales off a cliff the last two weeks after showing a strong start in Sept.
1. I'm optimizing my Adwords and Yahoo marketing. There are fewer customers, but I want them clicking on MY ads.
2. Great time to run a special on shipping. Gas is going down...
3. Taking advantage of the slow time to evaluate inventory, weed out poor-selling SKUs, catch up on book keeping, analyze analytics stats and make improvements. I don't have the luxury of money but I do have time, and I'm usually short on that.
4. Hunkering down, crossing fingers, praying...cutting some bills and sponsoring a few more 3rd world children through charities to remind myself what's really important.
I continue to spend on inventory. I guess I'm hoping things will come back at least somewhat after the markets stabilize. I sell hobby/craft items...2 things going for me in a recession: I sell 1. stress relief and 2. a way to fill your jobless time.
| 2:22 am on Oct 12, 2008 (gmt 0)|
My sales have been way down for a couple of weeks, so like rachel123 I have worked on getting a lot more focus on my Adwords campaigns. If it's any comfort, I rarely hit my budget with that. I also put up a new cart, which I have been meaning to do for a long time, and finally got a blog on my own domain started as of today. I don't lower my prices. My prices are already too low. If I have something that doesn't sell, I usually divide it up and give it away as a freebie. I saw one of my competitors had much higher prices than mine, so when I put up the cart, I took the opportunity to raise all my prices, most just 10% but some a lot more.
I know this is not to do with ecommerce, but I've also taken personal time in the past few weeks to make a lot of preserves and pickles, and to cook and freeze a bunch of stuff. It makes me feel better to be prepared in that way. A prepared guy is a happy guy; a happy guy is a better merchant.:)
| 2:57 am on Oct 12, 2008 (gmt 0)|
September was the best month ever. Now sales are quite down.
If people were not freaked out last month, why are they now? Looks like I am not the only one. Only thing that changed from last month was Mccain's poll number.
Oil, food price all went down, that didn't have much affect. Are people cutting down for anticipation of Christmas? At this rate, Ad will fall real soon, sell your GOOG stocks now.
| 6:57 am on Oct 12, 2008 (gmt 0)|
|If people were not freaked out last month, why are they now? |
I have wondered this too. The economy was in a mess before the big bailout, for the past year or so. Why is it biting now all the sudden? I think it must be just all the negative press on the markets.
And, I know a fair share of my demographic is retirement age...when the dow drops, their IRAs etc drop and their payout payments drop...so less cash to spend...and I think people are 'hoarding' cash because they are scared of losing their jobs, etc. because of all this speculation on the Next Great Depression.
Bottom line, it's bad for sales. :(
| 2:54 pm on Oct 12, 2008 (gmt 0)|
"I think it must be just all the negative press on the markets. "
Yes, I believe that's true. The number of people who are in trouble with their mortgages is very tiny. Yet the mortgage story has bled over to the stock market because of the "bailout." People are selling perfectly good stocks at fire sale prices.
This type of fear is self-fulfilling, as the markets go down as people sell out of fear.
The markets would go up if people continued to buy things. It's hard to convey that concept on a page selling widgets, though.
| 4:43 pm on Oct 12, 2008 (gmt 0)|
What has happened since then is a global stock market crash. Anybody with stocks, mutual and pension funds would see a large reduction in wealth. This shock will probably provoke another 10-30% reduction in house prices worldwide. So you have a real "wealth effect" going on. People may be earning the same, prices of products may be the same, but it is just that people do not feel as wealthy and confident. I don't think any economist seriously believes that the world can escape a major recession now.
My opinion is that this is definitely not the time to ratchet up your advertising spending. The costs of advertising will surely go down and it may be better to wait until Christmas shopping truely starts.
| 4:50 pm on Oct 12, 2008 (gmt 0)|
dickbaker - Have you done studies on your website to increase the sales? Usual things like easier cart / payment stages etc?
| 9:01 pm on Oct 12, 2008 (gmt 0)|
In my niche I get my Christmas boom in October/November - I sell widgets that are often made for Christmas gifts. So I have bumped my ad spending slightly and targeted my ads more specifically, like I always do in October. But I did make some changes.
I changed up my ad wording a to stress the economy of my widgets - 'give a widget for a beautiful handmade gift at a tiny price!' and I removed words like 'buy' and anything else that might inspire spending guilt or fear.
I sent out an extra email newsletter with subscriber specials, acknowledging the economic circumstances and touting widgets as a back-to-basics inexpensive way to get through Christmas and relieve stress...
To save some cash, I dropped my ad spending to nearly zero on keywords that I get good organic search placement on and will take some time to update my meta descriptions on landing pages to reflect the types of changes I made to my ads.
It seems to have helped, as my orders over the past 2 days have really picked up - almost back to normal. Small sample size, I know, but it still makes me feel a bit more hopeful. If there is any way to market your products as something to help people get through tough times and save money, you may be able to create an advantage in this climate. You could probably sell HRoth some preserve-making widgets right now. :)
| 10:30 pm on Oct 12, 2008 (gmt 0)|
rj87uk, I watch the stats on my site using my stats program as well as Google Analytics.
The shopping cart system, I think, is pretty straightforward, and easier to use than most. Click the "Buy" button, there's a brief message saying "thanks, please wait while we add the item to your cart." Then there's the cart page. Hit checkout and fill out shipping information. Hit Submit and fill out the credit card info. That's it.
I'd like to combine the shipping info page and the credit card info page, but the shopping cart I have doesn't allow for that.
I'm certain that the trust issue comes into play. I don't feature a lot of products on my site, and for a couple of reasons. One is that there are many products in my niche that have so little profit that I can't justify the time required to create the pages and get them ranked. The other reason is that I want the products I sell to be good quality. There's plenty of junk out there, but I don't want to be known for that.
Also, my site is not strictly ecommerce. It's a mix of information, advertising for retail stores, and then my online store. That may confuse vistiors.
On a typical day, about 600 people will look at my online store page and, of those, roughly 800 will look at the product detail pages. And I'll sell one to six items, although there are a few days where I'll sell none.
| 10:45 pm on Oct 12, 2008 (gmt 0)|
That sounds pretty straight forward, I think that when times are hard like these the best thing to do is try and get the most of the traffic you have (before building more).
The information / advertising for retail may be confusing people but not by much I wouldn't think. I have found that on your shopping cart / check out areas take out everything that will distract people some things include: products on offer and links to non important parts of the website.
You are right about the trust thing - Do you have a B&M address listed for your shop? People like to see that if there is a problem they could come see you and many people simply get scared away if I don't see an address listed any where.
| 11:18 pm on Oct 12, 2008 (gmt 0)|
"give a widget for a beautiful handmade gift at a tiny price!'"
That's a great idea, rachel123. I make a number of my widgets, and the rest the customer uses to make something.
I too comb through my AdWords on a regular basis to check that I am not paying for ads for keywords I already rank well for.
| 12:13 am on Oct 13, 2008 (gmt 0)|
Though many may feel that their placement, and marketing perhaps will overcome the more competitive consumer demand, however, the media intensifying these global issues i am sure will undoubtedly have an effect on holiday sales. as such, e commerce gift sites like mine, who do 70% of their yearly revenue in the months before Christmas, perhaps have the most to worry. Remember the bigger picture though...
The NRF predicts a less then 2% sales growth this holiday season, the worst growth in many years, perhaps since 1991. E commerce looks less gloomy, whereas a 8-9% sales growth is predicted (down from 19% last year when consumer fears of the economy and "soft sales" truly started). It is growth, however, it depends on new competition in your niche. Luckily I assume there have been less new "competition" created this year as the economy has been unmotivated, as well as inventory cut-backs from big-box like competitors. This could lead to relative growth for us anyway.
What dies this mean? Well, i truly don't know anymore. For us, there will be less market-share. As such, Ive taken more of a proactive measure on positioning, marketing and value. That way I can secure the "minimal" growth in my vertical.
One hard decision is merchandising. In previous years we overspent and overstocked in the run up to holiday, however, this time we simply cant take that risk. A lot of items are on preorder, and grouped now. Slow selling items are even on sale for 50% off in attempts to keep cashflow. I feel though if every e-tailer cuts back on inventory however, they will automatically make less, and allow for the smaller customer base to search else-wear for their "perfect gift" This change may really depend.
| 3:18 am on Oct 13, 2008 (gmt 0)|
rj87uk, I don't have a B&M store. But, at the bottom of every sales-related page, I have a toll-free number. I'll spend as much time as is necessary with a potential customer, even if he doesn't buy something. For example, if he wants an accessory that's not available for the widget he has, I'll suggest other solutions.
My store is still new, it's not well-known, and there's a lot of competition in a niche with very low profit margins. I'm finding that word of mouth is working well for me, and that many customers tell me I offer the best service they've ever experienced. I hope that will help me to expand.
hellraiser1, I don't carry inventory; my distributor does. There's a very popular widget that's in demand this time of year. Unfortunately someone at the manufacturer screwed up, and the model X widget won't be available until after the seasonal demand is over. When I get customers ordering the X widget (even though I have "OUT OF STOCK" shown on the page), I offer to give them a slightly more expensive model for the same price. I make $15 less, but I still make a profit. And the customers seem to appreciate the effort.
| 7:09 pm on Oct 13, 2008 (gmt 0)|
|People may be earning the same, prices of products may be the same, but it is just that people do not feel as wealthy and confident. I don't think any economist seriously believes that the world can escape a major recession now. |
These are subjects this Nerd pays a substantial amount of attention to...what can I say? I love stats and numbers.
Economists, unfortunately, rarely identify anything as a "recession" or "depression" until they write their books during the ensuing upswing. That part of cyclical analysis is one of those "hindsight is always 20/20" phenomenons. I think part of it is that the National Bureau of Economic Research (NBER)(the Business Cycle Dating Committee to be exact), the group which has the official say of whether or not the US is in a recession, is a government entity. Not only must the numbers be checked, double checked, recalculated, revised, signed off 10x by all necessary beaurocrats, etc. but they also want to avoid "externalities" of saying we are in a recession. I guess its the only time our government wants to avoid fear-mongering.
This has always bothered me: Strange that we live in a world where "money" is a theoretical entity which we place so much "faith" in. I mean, think about this... The concept of money is entirely manufactured. So is credit, debt, wages, etc. Our whole economic system relies on faith to the point that religion's requisite "leap of faith" pails in comparison. Since modern economic history began (post-barter economics) man has gotten into situations like this where "confidence" is dragging down the "real economy". People "lose faith" in the system and mechanisms to correct such failures. It seems to me, though I know its completely naive, that we should all just wipe the past few weeks from our collective memory and carry on as usual. Literally, we need to just be more confident...
What I foresee being a problem for us e-commerce types, is credit card debt. With the traditional credit markets locked up to the point that the LIBOR Index (London Interbank Offered Rate -- an index which tracks the rate banks are charging one another for unsecured debt loans; high #'s = bad) is hitting new highs daily, people are going to be using their credit cards -- and not to pay people like us. We have become a credit hungry society who is used to living beyond our means with money borrowed from projected future income (see Milton Friedman's theory on Interest Rates and Income Streams). That river has run dry...so now people will borrow from their credit cards as their banks won't even open the door. That leaves e-commerce, which is driven by Visa, MasterCard, American Express and Discover out in the cold (I'd say up the creek without a paddle, but I've already used an analogy where we have no river...). I am tightening my belt, the same as everyone else, and waiting for John Q Public's discretionary spending fund have a (perceived) positive balance.
| 9:19 pm on Oct 14, 2008 (gmt 0)|
|What I foresee being a problem for us e-commerce types, is credit card debt. |
I was thinking/worrying about this the other day. What if some of these banks start cancelling credit cards for people who are in too deep because the bank can no longer afford to carry people. It could cripple ecommerce.
| 3:55 pm on Oct 21, 2008 (gmt 0)|
My sales have tanked for the past few months. This is the worst it has ever been that I can remember. It seems like every day is the day after 9/11. Nobody is buying, calling, or emailing. My traffic remains unchanged.
| 4:20 pm on Oct 21, 2008 (gmt 0)|
Sales have been lower this week than in the previous 2 or 3 weeks. What's really starting to bother me: my AdWords spending is decreasing...and not because I have lowered my bids!
| 5:37 pm on Oct 21, 2008 (gmt 0)|
|Sales have been lower this week than in the previous 2 or 3 weeks. What's really starting to bother me: my AdWords spending is decreasing...and not because I have lowered my bids! |
That is probably because people who are having poor sales like me and you are trying to compete for what few customers there are. This boosts the price of the Google PPC ads, and the only one who wins in the end is the Big G.
| 6:51 pm on Oct 22, 2008 (gmt 0)|
I guess everyone is doing okay?
| 7:57 pm on Oct 22, 2008 (gmt 0)|
Sales fell off a cliff two weeks ago. Dismal.
| 9:21 pm on Oct 22, 2008 (gmt 0)|
We have exactly the same sales figures as a year ago. So we have stopped growing. We normally see our web business grow in the 20 to 30% range. That is not happening this fall, nor do we expect it to happen this winter.
| 9:36 pm on Oct 22, 2008 (gmt 0)|
My main search is "cheap blank" or "cheapest blank" that tells me trouble. I am very happy I rank for these sought after terms but I am like most struggling with more traffic less sales.
| 3:49 am on Oct 23, 2008 (gmt 0)|
I concur with all of you: Sales are flat (but up from two weeks ago when there was nothing but crickets), traffic is up, and AdWords bidds got real expensive real quick. And AdWords traffic is converting worse than usual, making it hardly worth the spend. I'm focusing on PR efforts, inexpensive banners on highly-targeted sites, and emails to my existing customers to keep things going through the holidays. I'd love to hear what adjustments others are making!
| 3:14 pm on Oct 23, 2008 (gmt 0)|
|AdWords bidds got real expensive real quick |
Yes, I have noticed this as well.
In fact, yesterday I hit a new record for Adwords single day cost. So I adjusted some bids downwards this morning because I am busting my budget. Oddly, I have not been cranking up my bids, so it must be the people under me are raising their bids and driving up the CPC for me.
| 3:21 pm on Oct 23, 2008 (gmt 0)|
|people who are having poor sales like me and you are trying to compete for what few customers there are. This boosts the price of the Google PPC ads, and the only one who wins in the end is the Big G. |
Unfortunately, my overall spending on AdWords has been decreasing...even if my CPC is increasing, there are simply fewer clicks...I hope this is because of fewer searches/clicks overall and not because my prices are out of line, etc.
| 4:02 pm on Oct 23, 2008 (gmt 0)|
hey HugeNer have you been looking at the placement of the aids as to the falling clicks. It may mean your moving down the ladder...
| 5:15 pm on Oct 23, 2008 (gmt 0)|
Good call, bwnbwn. I have fallen about 1/2 a placement for my Average Ad Position (on Google Analytics) for a few of my most targeted words. That is sure to be a significant factor, even if I am still in the top 1-5 positions! My impressions have fallen as well, though, so some of my attrition is due to lower search levels...and then the situation is compounded by my lower ad positioning. Thanks bwnwbwn!
| 6:26 pm on Oct 23, 2008 (gmt 0)|
HugeNerd so the norm as well for you. Same ads more cost as business scamble to get sales to say in business.
| 8:20 pm on Oct 23, 2008 (gmt 0)|
More people buy ads when the economy goes south. They are competing for what few buyers there are. Google thrives when the economy tanks.
| This 36 message thread spans 2 pages: 36 (  2 ) > > |