{"id":36652,"date":"2023-01-30T14:02:31","date_gmt":"2023-01-30T14:02:31","guid":{"rendered":"https:\/\/www.zopa.com\/retail-finance\/?post_type=retailer_articles&p=36652"},"modified":"2025-03-03T09:47:25","modified_gmt":"2025-03-03T09:47:25","slug":"uk-inflation-ecommerce-2-2","status":"publish","type":"post","link":"https:\/\/www.zopa.com\/retail-finance\/blogs\/uk-inflation-ecommerce-2-2\/","title":{"rendered":"UK Inflation and Retail: Lessons from Covid when creating an online store"},"content":{"rendered":"

Inflation is a major concern for businesses across the UK. For retailers, its impacting margins, meaning many are pivoting to eCommerce – just as they did during the pandemic.\u00a0<\/i><\/p>\n

So how can retailers use the lessons learnt from Covid to drive online sales?<\/i><\/p>\n

\u00a0<\/i><\/p>\n

In this blog, we\u2019ll cover:<\/i><\/p>\n

\u00a0<\/i><\/p>\n

– What inflation is, and how retailers can overcome the challenges presented by it.<\/i><\/p>\n

– The benefits of creating an online store and how to do it.<\/i><\/p>\n

– Why implementing a POS finance solution is essential during the cost of living crisis.<\/i><\/p>\n

\u00a0<\/p>\n

The UK\u2019s inflation rate fell for a second consecutive month<\/a> in December. But the price of electricity, gas and other fuels still pose a significant threat to UK retailers – not to mention reduced consumer spending.<\/p>\n

\u00a0<\/p>\n

Although inflation rates have peaked, they still sit at 10.1%.<\/p>\n

\u00a0<\/p>\n

What does this mean for retailers in practical terms? And how can you support your customers through this challenging period?<\/p>\n

\u00a0<\/p>\n

What is inflation?<\/strong><\/h2>\n

\u00a0<\/p>\n

Inflation refers to the rise in prices of goods and services. The rate of inflation, therefore, determines how quickly prices are rising.<\/p>\n

Let\u2019s take a weekly food shop as an example. If the full shop cost \u00a3100 in January, but \u00a3110 in February (despite paying for the same items), then the monthly inflation rate would equal 10%. In other words, your money didn\u2019t go as far as it did in January.<\/p>\n

\u00a0<\/p>\n

As UK inflation rates rise, every pound a consumer has is stretched further, leading to changing habits and more cautious spending.<\/p>\n

\u00a0<\/p>\n

Now more than ever, retailers need to adapt and change with the times, choosing more innovative ways to generate sales.<\/p>\n

\u00a0<\/p>\n

Why is there inflation in the UK?<\/strong><\/h2>\n

\u00a0<\/p>\n

The rising cost of energy is one of the key reasons for current UK inflation.<\/p>\n

\u00a0<\/p>\n

Greater demand for oil and gas, coupled with a decline in available resources such as grain due to Russia\u2019s ongoing war in Ukraine, has put even more pressure on already soaring prices.<\/p>\n

\u00a0<\/p>\n

As UK inflation rises, consumers across the UK are being more cautious with how they spend their hard-earned money.<\/p>\n

\u00a0<\/p>\n

Rising inflation brings new and diverse challenges for retailers. Wallets are stretched and consumer spending decreases – so it\u2019s essential to adapt your strategies accordingly.<\/p>\n

\u00a0<\/p>\n

How to generate sales during a cost of living crisis<\/strong><\/h2>\n

\u00a0<\/p>\n

The Covid-19 pandemic triggered a shift in consumer behaviour. eCommerce received a massive boost in popularity, as many consumers had no choice but to shop online.<\/p>\n

\u00a0<\/p>\n

Fast-forward to 2023 – and there\u2019s a lot we can learn from Covid. Shifting your retail business online can bring a whole host of benefits – not just for you, but for your customers.<\/p>\n

\u00a0<\/p>\n

Pivoting to eCommerce and creating an online store is a sure-fire way to boost sales during the ongoing cost of living crisis. Let\u2019s take a closer look at why.<\/p>\n

\u00a0<\/p>\n

The benefits of creating an online store<\/strong><\/h2>\n

\u00a0<\/p>\n

With online shopping accounting for 35.9% of UK retail sales in 2022<\/a>, here\u2019s why going digital is a great idea:<\/p>\n

\u00a0<\/p>\n

Increase sales with 24\/7 shopping capabilities. <\/b><\/p>\n

Thanks to the automation that eCommerce provides, your customers will be able to shop when they want, where they want \u2013 significantly increasing the time they spend browsing and buying from your store. Plus, you can manage your online store from anywhere in the world.<\/p>\n

\u00a0<\/p>\n

Reduced overheads. <\/b><\/p>\n

A physical store requires staff, security and maintenance, amongst other costly services. Creating an online store can significantly reduce or even eliminate these overheads – giving you more revenue to invest back into the business.<\/p>\n

\u00a0<\/b><\/p>\n

Improved customer insights. <\/b><\/p>\n

All good eCommerce platforms should be able to give you detailed insights into your customers. This includes their demographics, spending habits and user experience. You can then use these insights to boost sales and reduce cart abandonment.<\/p>\n

\u00a0<\/b><\/p>\n

Greater flexibility at checkout. <\/b><\/p>\n

Shifting your business online means you can implement finance options at checkout, giving your customer base greater flexibility in how they pay \u2013 generating sales as spending is tightened. Providing multiple retail finance options offers an alternative and more affordable way to pay, reducing cart abandonment and generating sales.<\/p>\n

\u00a0<\/p>\n

How to create an online store<\/strong><\/h2>\n

\u00a0<\/p>\n

Once you\u2019ve decided to create an online store, here\u2019s what happens next:<\/p>\n

\u00a0<\/p>\n

1. Choose your eCommerce platform<\/p>\n

2. Define your target audience<\/p>\n

3. Pick your products<\/p>\n

4. Design your online store<\/p>\n

5. Introduce payment options<\/p>\n

6. Launch your online store<\/p>\n

\u00a0<\/p>\n

For more details, check out this handy video from our partners at Shopify:<\/p>\n

\u00a0<\/p>\n

\t\t\t