Inflation impact on Retail Marketing
Every day, business magazines and news websites tell us that prices are increasing and that a recession is coming. Higher prices for everything we need affect our lives as consumers, but we also face commercial issues as providers of goods and services. Retail shoppers have been through https://www.jordansinfrared.com/ a lot in recent years. A breakdown throughout the supply chain, social isolation, or trouble getting products all contribute to negative customer experiences. Customers are nervous as the cost of living rises, and brands and merchants are acutely aware of this. As a result, 29% of retailers are fearful that any price change may trigger adverse consumer reactions.
Most corporate leaders understand that consumer price elasticity has limits and that difficult decisions must be taken to keep the proverbial “ship” afloat.
- How long can we continue to accept rising costs without increasing customer price levels?
- How many clients will we lose by passing on the increased costs?
- Where else can we reduce our operating expenses?
There are, of course, no easy, simplistic solutions to these concerns. But keep in mind that while this hurricane will pass, your actions to help you weather it may compromise the survival of your ship if you are not cautious.
When a firm is trying to trim operational expenses, investing in the retail customer experience is generally the first thing to go.
Actions and Consequences: Two Brands – Differing Outcomes
They say history does not repeat itself, but it rhymes. During the recession of 2008, most consumer brands did what they could to stay afloat. If you were looking to buy a sailboat at the time, computer graphics and magazine ads were the only ways to “experience” a product that sold for hundreds of thousands of dollars. No dealer in the United States had a boat in stock to come on board and sail, except the dealers who signed with a European sailboat brand whose name begins with “B.” The manufacturer took out massive loans to finance boat inventory in the dealers’ showrooms when American boat manufacturers were waiting out the recession.
Consequently, practically every other boat on American bodies of water brandishes the brand “B” name on their sterns. Are these boats better made? Being a sailor with a few thousand miles of open ocean sailing experience, I can confidently state that the “B” boats are of significantly lesser design and build quality than the majority of the brands they decimated by betting on offering a better retail customer experience. No, they are not cheaper.
The second story is about an Asian automotive brand whose name begins with “H.”. They recognized what the term “brand” meant. To a consumer, the meaning of a brand is associated with trust. During the recession, other car companies cut the number of call center workers who helped and supported their customers. However, the “H” began a buy-back program. The program allowed Americans to purchase a new car that could be returned if their employment was terminated. Sales of the “H” model increased by 5% in January and February 2009, while the rest of the automotive market was losing money. This approach solidified their brand in the minds of Americans, where their name had previously been a popular subject of jokes for late-night TV clowns.
Customers are abnormally apprehensive as a result of product increased prices. But if a consumer has an excellent experience with a product before buying it, they may care less about price increases.
Customer Experience Is The Focus Of Retail Marketing Strategy
Rather than lowering the quantity or quality of your merchandise while retaining the price, consider an in-store product demo as a better retail marketing tactic. When you do this, you divert shoppers’ attention away from the amount and allow them to realize for themselves how the value outweighs the price. Use marketing events scheduling software to keep in-store demos an ever-present element of your retail experience, allowing your shoppers to focus on their new product experiences rather than the sticker shock of the things they used to buy.
According to Shopify, In Store Demo allows savvy retailers to test new brands or merchandise, boost in-store customer engagement, increase sales per square foot, and receive consumer feedback.
Before beginning in-store sampling, Shopify recommends the following steps: assess inventory levels, consider employing brand ambassadors, combine demonstrations with promotions to enhance sales, be choosy with demo products, and schedule promotional events during business peak hours.
The effect of inflation on customers cannot be underestimated. That is unavoidable; merchants must fight to maintain their financial health and viability. Price cuts and discounts have been proven to be ineffective techniques for providing the best retail customer experience.
A better way to deal with consumers’ inflationary responses is to show them how the product works in the store. Retailers can also keep an eye out for new consumer behavior by doing market research regularly.
When prices go up, it’s easy for businesses and well-known brands to make bad decisions, like selling less for the same price as before or cutting back on customer service. These decisions are made to protect their shrinking profit margins at the expense of their consumers’ experience. Yet, it is their earlier significant expenditures in their client experience that have made them what they are today. Betraying your consumers’ confidence creates opportunities for nascent firms obsessed with the cost of customer acquisition rather than the following fiscal quarter margin. In-store product demos are the most effective technique of experiential marketing strategy for stealing customers from established firms who are scared of inflation.