As Consumers Fear Inflation, Brands Can HelpAs the U.S. economy slowly recoups from the global COVID-19 pandemic, consumers are paying more attention to the ever-escalating prices of goods and services. As demand continually trumps supply, inflation […]
As the U.S. economy slowly recoups from the global COVID-19 pandemic, consumers are paying more attention to the ever-escalating prices of goods and services. As demand continually trumps supply, inflation continues to soar. The U.S. Bureau of Labor Statistics reported on July 13 that the 5.4% consumer price index increase had been the most significant jump since the Great Recession of 2008. Additionally, some experts predict that inflation could stick around for a couple more years.
For many brands, inflation presents yet another hurdle in a never-ending laundry list of pandemic-induced instabilities. From nationwide store closures and panic buying to supply chain shortages and revenge shopping, it’s a brave new world for brands to try and navigate.
So how can brands entice reluctant shoppers back through their doors or onto their websites? Moreover, how can they quell concerns about inflation and alleviate consumer sticker shock? The answer is through thoughtful engagement strategies and omnichannel messaging methods.
Costs and consumer concerns continue to increase
A recent poll conducted by data and tech company Numerator found that 83% of shoppers noticed a price increase on grocery and household items they commonly buy within the past month. On top of that staggering statistic, 66% of consumers believe that these costs will continue to rise in the coming months.
Rising prices are accompanied by growing concerns about everyday expenses, making customers drastically curb their spending habits. Numerator reported that 64% of low purchase power consumers had adjusted their buying behavior. And 92% of shoppers plan to change their purchasing patterns if prices even slightly surge, including hunting down discounts.
Brands within the bar/restaurant, entertainment, and apparel industries are expected to be hit the hardest by these shifting shopping patterns.
Understanding hesitant customers
For brands to ease consumer concerns and attract more business, they first need an intimate and granular understanding of customer pain points. This understanding means disregarding their existing consumer segmentation assumptions and grouping potential buyers by price sensitivity and product/service usage behavior.
Brands must also examine the changing buyer behaviors and attitudes that resulted from inflation, including customers seeking out the brands with the best deals. Companies must have competitive analytics in place to efficiently conduct price comparisons with their competitors. Savvy consumers are just a click away from finding the businesses with the best bargains.
These efforts will help brands properly quantify shifts and develop communication strategies that cater to inflation-related consumer concerns.
Enhance customer loyalty initiatives
Brands that recognize their customers are experiencing an inflationary crunch can secure consumer loyalty by creating value-added incentives, such as deep discounts and coupons. These incentives will mitigate the risk of losing shoppers to lower-priced alternatives.
However, companies should not cut costs across the board or discount items for those who don’t need the price slashes. They should only be lowering prices on particular goods or services for specific consumers. For cash-lacking customers, promotions should focus on key price points on small pack sizes. On the other hand, brands should encourage multi-unit purchases for consumers who have disposable income.
Sending the right signals
Once a brand has established what discounts they want to offer and to whom, they must reach customers in a highly personalized manner. Omnichannel messaging tactics allow brands to reach the right customer with the right message. This approach also makes the consumer feel like the brand cares, understands their needs, and truly wants to help.
Omnichannel messaging enables businesses to communicate with customers across numerous platforms, including Instagram, Facebook, and SMS. By directly interacting with consumers one-on-one, brands can cultivate a personalized experience and share exclusive deals and coupons. This personalization fosters consumer trust and retention. Brands can use Mitto’s Conversations tool to effortlessly communicate with customers via many social channels.
How to turn inflation into an opportunity
Inflation encourages brands to closely evaluate their current consumer communication strategies and identify opportunities for improvement.
While many businesses will see inflation as a threat, it can be a chance for brands to deepen their relationships with customers and find new and exciting ways of interacting with them. Companies that opt to use SMS and omnichannel communication strategies can foster closer connections to their customers and weather all economic issues.