10 Tips for Thriving in a Volatile Market

We are living in interesting times. Markets have rarely been as volatile and unpredictable as they are in 2023. Rising inflation and weak growth combined with global uncertainty and turmoil have led to a difficult economic situation. 

A volatile market can mean tough times for eCommerce brands. But, you don’t have to despair. With the right strategy and a willingness to adapt, a volatile market does not have to spell disaster. You can survive and even thrive during an economic downturn.

How? By following these 10 top tips: 

Diversify your sales channels

The key characteristic of a volatile market is instability. You can combat this and create stability for your brand by diversifying your sales channels.

Think of it like this: every sales channel you have is like a leg supporting your business. The more legs, the more support and stability you have. 

Diversifying your sales channels doesn’t necessarily mean branching into entirely new markets (although you can do that if you spot the right opportunity). Diversification often means adding more channels to your repertoire.

For example, as well as an eCommerce channel, you could add a wholesale channel, a marketplace channel, an affiliate channel, and even an offline channel. This will give your customers more ways to purchase from you and make sure you remain trading even if one channel goes down.

Diversification is a low-risk strategy that will fortify your business and aid growth. 

Provide excellent customer service

There are more guaranteed returns in persuading existing customers to purchase again than there are in pouring your resources into attracting new customers. So, in a volatile market, it’s important to cultivate strong, loyal relationships with your customers.

The likelihood of those returns increases even further when you have a good relationship with your customers. Customer Lifetime Value (CLV) rises with every good experience your customer has with your brand. So, you must make sure that your customer service is perfect at every single touchpoint.

Focus on your unique value proposition

In times of economic downturn, it’s tempting to radically alter your business to stay afloat.

There is nothing wrong with change if it’s needed, but change for change’s sake is probably not a good idea.

Instead, focus hard on your unique value proposition. Take the thing that makes your business unique and valuable to customers, and double down on it.

For example, if your unique value proposition is that you can get goods to customers faster than everyone else, make sure that your logistics chain is fully optimized at all times. If your unique value proposition is that your product is of the highest quality in the market, make sure that you are maintaining and improving that quality at all times.

Your unique value proposition is why your customers came to you in the first place. If you change or neglect it at this crucial time, they will be very disappointed. 

Stay informed about economic indicators

Being prepared is key to surviving fluctuations in the market. By keeping a close eye on economic indicators, you can bolster your business ahead of turbulent times.

This is one area where enterprise resource planning is extremely useful. By implementing ERP software you can access data from all departments to gain real-time insights into the economic situation of your company. You can combine internal indicators with external research to guide your business through the roughest economic downturns.

Key economic indicators to learn about and monitor include:

• Inflation rates
• Interest rates
• Average GDP
• Employment rates
• Your retail sale averages
• Wider retail sale averages
• Exchange rates
• And stock prices

 Invest in technology

The right technology can be a huge help when navigating a volatile market. It can help organize your strategy, set benchmarks, optimize your workflows, and more. There is a wealth of technology out there which can help future-proof your business.

Accountancy software can help control cash flow and manage invoices and CRM solutions can be used to deliver better customer service and improve customer retention.

You might also decide to pull all the strands of your business together with ERP software so you can plan and strategize for your enterprise much more effectively. If you chose to do this make sure you have a strong ERP implementation plan in place that is tailored to your business needs and budget.

Good technology takes a huge weight off your shoulders. With the right software, you can automate many of the more mundane admin tasks. You can also monitor your business continuously and get granular insights into ways in which you can improve. 

Just make sure that whatever software you invest in you plan carefully and provide adequate training for your employees.

Keep an emergency fund 

In a volatile economy, things can change very fast. You may find yourself unexpectedly scrambling to pull a certain product, quickly put out a new marketing campaign, or update your technology.

So, it’s very important to set some funds aside for emergencies. With an emergency fund, you are less likely to go under when your business hits its first major hurdle.

It’s also a good idea to set rules for when the emergency fund should be used. For example, determine the kinds of phenomena that constitute an emergency, and assign responsibility for accessing and apportioning emergency funds.

Invest in employee training

Your employees are your greatest resource, so it makes sense to invest in them.

Employee training can:

• Improve your productivity
• Boost efficiency
• Give your employees more initiative
• Instill accountability
• Save time by reducing the need for management to support employees
• Improve opportunities for your employees
• Reduce human error
• Boost cybersecurity
• Establish best practices

Build a community

Building a community is a great way to establish a core of loyal customers who will back you through the hardest times. So, make a point of treating your customers as part of the family.

Customer communities don’t just happen. It takes work and consistency to build up that loyal support base. You can start the process by:

• Providing a place for your community to ‘meet’ (i.e. a social media page or something of the like).
• Using customer personas to help your marketing and service teams think of customers on a human level rather than as data points.
• Being caring towards your customers.
• Engaging with comments and feedback on your social media pages and website.
• Asking customers for their opinions.
• Setting up a subscription newsletter, perhaps with exclusive content and rewards.
• Rewarding loyalty with vouchers, thank you emails, and so on.

Avoid emotional investing 

Everyone has emotional biases, and in volatile times it’s easy to let these biases take over. 

Emotional investing is a common problem for entrepreneurs. Many have fallen into the trap of impulsively investing in a hot new product or stock, only to find their investment holding them back.

Emotional investing is particularly tempting when markets are riding high. But, in a volatile market, it is vital to keep your cool, even when things seem to be on the up. Be aware of your biases, and consider any investment carefully before taking the plunge.

Stay disciplined

Discipline is the secret to a successful business in a volatile market. To stay afloat and to make your business thrive through every market fluctuation, you need to maintain a strong, disciplined business ethic.

Strategize, set standards, acknowledge your strengths and your weaknesses, work hard towards your goals, and don’t let the wobbles of the market throw you off your stride.

Final thoughts

Modern eCommerce owners are working in a tricky economic environment. The market is volatile, unpredictable, and fluctuating wildly.

But, with the right mindset, planning, technology, staff, and customer community, you can weather every storm.

Use these 10 tips to build a business that will thrive in any market condition.