In March, retailers faced an increase in sales both in offline stores and on marketplaces. Frightened by the departure of foreign brands from the market and the shortage of essential goods, people began to buy in reserve, the demand for FMCG goods, clothing and footwear, and electronics increased.The excitement did not last long – by the beginning of April, sales had fallen significantly. The decrease in buyer activity has excited current sellers and those who were just planning to enter marketplaces. Anton Larin, CEO XWAY — an operating partner of Russian marketplaces — tells why you should not be afraid of market stagnation and how to turn the situation in your favor.
7 steps for those who dare to start selling on marketplaces when the market is frozenSvetlana Zykova
Why sales are falling
From late February to mid-March, marketplace sales grew across all categories. Due to the increased demand for clothing and footwear, electronics, household appliances, children’s things, many sellers did not have time to replenish stocks in warehouses.
Problems with logistics and a long wait for deliveries created an illusion of shortage, followed by a wave of new orders. In addition, changes in the market coincided with the launch of major promotions on marketplaces: on Ozon and Wildberries, you could buy goods with discounts in honor of March 8, AliExpress held an annual large-scale sale “328”.
You need to understand that the situation in retail now is largely an emotional response of people, and not the real state of the economy. After the outbreak of “panic” demand, a drop in sales is a natural reaction of the market. Many bought for future use at better prices and temporarily closed the need for some goods. In addition, due to a decrease in solvency and an increase in lending rates, buyers began to save more and make less impulsive purchases.
Is low demand a problem? Opportunities for sellers
Some sellers think that it is better to start selling at a point of high demand – it will immediately attract a wide audience. This is not entirely true: now, for example, due to the departure of some foreign brands, the market is shrinking, competition is declining – in such conditions it is easier for young companies to occupy the vacated niches. In addition, at the point of decline, you can:
- Assess the real needs of buyers. If panic and fear of shortages led to increased demand, now the audience will be more conscious and selective in their choice of products. Analyze what needs the consumer will have in the near future, what will be the decisive factor when choosing products – based on this, select a niche.
- Offer a quality product at a competitive price and win a loyal audience. Demand for goods of foreign brands, which are no longer available in Russia, remains. Someone managed to stock up for the future, but many are looking for worthy alternatives – which means that replacement analogues will be in demand no less. If you can offer quality products at an affordable price, it will be easy to attract customers.
- Grow up. A drop in sales is always accompanied by an increase in buyers’ savings, and pent-up demand is growing. If you start trading at the point of decline, the indicators will soon return to normal levels – after all, after a fall there is always a rise.
Entering the marketplace during a period of stagnation: 7 steps for those who dare
1. Choose a niche
Study the real demand of consumers using analytics in personal accounts of marketplaces or additional services, such as Moneyplace.
Decide on a category that will be in demand in the near future, for example, FMCG products, clothing and footwear, products for children.
2. Look for local suppliers
If you cooperate with foreign companies, start looking for Russian partners in advance so as not to depend on supplies from abroad. Do not exclude the possibility of importing goods from abroad using parallel imports.
3. Prepare the content
Take high-quality photos, correctly design product cards – in conditions of reduced purchasing power, people are more careful in choosing products. It is important to correctly specify the characteristics, if necessary, add a video. It makes sense to order a professional photo session – beautiful photos will attract the attention of customers and increase confidence in the store.
4. Adjust your pricing
Compare the cost of similar products, choose the right strategy. For starters, you can set prices lower than those of competitors in order to get the first good reviews – products without ratings do not inspire confidence among buyers. Try not to change prices every hour, even if the exchange rate fluctuates.
5. Don’t give up on promotion
Bright advertising campaigns with the participation of bloggers, for example, or participation in marketplace promotions will attract attention to your store even in conditions of reduced demand. Don’t forget about pent-up demand: buyers will remember your product, add it to their favorites, and return to it later.
6. Control stock balances
Due to problems with logistics, there is a risk of being left with zero flow. If you see that the goods are quickly sold out, predict deliveries in advance, replenish warehouses. When there is no way to quickly order an additional batch, increase the price. It is important to prevent a fall in sales – this will lower the product card in the ranking of the marketplace search engine.
Personal account of the marketplace — “Yandex Market”
7. Try to focus on online sales
Physical retail will continue to shrink. Rising rents and the need to index employee salaries are making offline businesses much more resource-intensive and risky. The share of e-commerce in Russia and in the world growing — Now it makes sense to invest in work with marketplaces.
If the decision to enter online platforms coincided with a global decline in retail sales, do not rush to abandon your plans or stop processes that have already begun. Allocate resources, find a reliable supplier, create quality product cards, and don’t stop if sales don’t go up immediately. Growth and decline in the economy are natural processes that constantly replace each other.
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Source: RB.RU by rb.ru.
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