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Inflation puts a bit of fear in consumers’ hearts, but inflation also affects retailers. Of course, you’ve probably been dealing with inflation already, and with concerns about a recession on the horizon, everyone is feeling just a bit uneasy right now. Thankfully, we’ve been down this road before, and experienced retailers can tell you that economic woes won’t last forever.
Until things pick back up, it’s important for retailers to recognize that inflation does have an effect on consumer behavior. Sometimes, consumers will attempt DIY fixes for things instead of buying new. They may also abandon store or brand loyalty in favor of bargains. Consumers usually cut back on non-essential items or swap out their favorites for low-cost alternatives when inflation starts eating away at disposable income as well.
Retailers are negatively affected by inflation in many ways, but the pain isn’t spread equally. For example, inflation affects luxury brands less intensely since incremental increases don’t hit high-income consumers as hard. For traditional retailers, however, losing store loyalty can lead to less floor traffic. Additionally, you may find that your category managers need to spend additional time with vendors to get the CPG brands customers are after. Finally, because shoppers often shift focus to low-cost options when inflation rises, your store might also require rethinking its retail marketing strategy.
The good news is that retailers can take proactive steps to help consumers get what they need and maintain customer loyalty during a tough economy. Below are a few tips:
Eggs are the latest victim of inflation as prices have soared across the country. Some retailers may see this as a problem since eggs are a staple in the American diet, but savvy retailers see this as an opportunity to implement a retail marketing solution using fun store experiences. For example, consider holding and promoting DIY cooking classes that take advantage of egg alternatives. In addition, a customer experience that provides helpful information on saving money during inflation goes a long way in retaining customer loyalty during the good times.
You can also use automation as a retail marketing solution to stay top-of-mind. Automation can be used to send out emails and SMS messages promoting sales, CPG brands, and store demo experience dates to keep customers invested. You stand a better chance of retaining customer loyalty in the future by keeping your store front and center when shoppers are hunting for bargains.
Lastly, retailers need to stay the course and remain optimistic. Inflation and recession fears aren’t fun, but they don’t last. What does last, however, is your commitment to your customers. Demonstrate this through your retail marketing, and you’re more likely to retain loyal customers for years to come.