With inflationary pressures on consumers and the cost of living crisis, consumer sentiment and purchasing power is at an all-time low and businesses are having to navigate a whole load more obstacles than ever before.
As we enter into this new phase of normal in retail, this is no time to sit back and hope for the best, but think outside of the box, take a punt and remain agile so that you can switch direction and protect your business when you need too.
With challenges, also come opportunities, so I’ve put together some ideas to help you navigate some of the problems you might be facing in your business right now.
As the cost of living crisis gets deeper, for many families they think twice about making those non-essential purchases and most will even put a complete hold on additional spending.
Consumer recessionary behaviours like switching brands, looking for alternatives and more affordable options are likely to get stronger. But be careful…there is a fine balance between de-valuing your brand and offering a balanced choice!
Purchasing of those items which will protect customers lifestyles and see them through the tough times are also likely to see higher demand. We’ve already seen a spike in electric blankets, warm clothing and ever air-fryers! So, think about the product categories that might do well in your business, and think about how you can enhance them and capitalise on the trends.
Those brands who have the ability to switch their product ranges and messaging to empathise with what their customer is doing, thinking and feeling are more likely to be successful at riding out this storm, especially as we step into the quieter times of the first quarter of 2023.
This one is a sticky subject, and one which has to be faced head on in my opinion.
As a short-term solution, we’ve seen businesses simply hike up retail prices in a bid to deal with the inflation and to cover their business costs.
As higher prices starts to become the norm and consumer recessionary behaviour becomes a real thing, this blanket approach will no longer be sustainable and businesses should look at more nuanced approaches to deal with rising costs, like reviewing their price architecture and strategy and reviewing the shape of their product ranges.
Keep a check on your good, better, best architecture; have you suddenly become top price heavy due to all the price hikes? If so, you may see an opportunity to rebalance your range to ensure that there enough choice at your customers favourite price point and ensure that they can easily trade up and down the range.
Are there products overlapping or just not selling for another reason? Perhaps you need to make some tough decisions about what you may need to walk away from or even re-source to ensure you stay true to your values as a brand and offer a balanced mix to your ideal customer.
Just as we have seen in the pandemic, customer choices were driven by value and connection. This has only become stronger, and we are seeing those brands who are making an effort to create meaningful connections with their customers make huge leaps over their competition.
Technology has evolved fast enabling small businesses to use things like video selling as a simple app connecting to their online stores and it is easier to create shoppable ads for example.
Connecting journeys from online to offline, for those who don’t have a physical store with concepts like pop up shops and concept stores have become stronger as another way to create those lasting connections and meet the customer where that are at, how they want to shop and engage with you.
Consider other areas of opportunity to grow your revenue by paying attention to the ever-evolving retail calendar, like cultural products, and tapping into religious festivals outside of Christmas like Diwali and EID to create emotional responses, as another great opportunity to explore for additional revenue.
It’s more important than ever to ensure that marketing efforts and your business branding encapsulates the values of your customer and therefore the reason that they make a purchase with your brand or not – is not down to if they can get that product somewhere else cheaper, but one of loyalty, value and connection with your brand. Whilst the world is continuing to evolve, remember the core principles of retailing of having the RIGHT PRODUCT, RIGHT PRICE, at the RIGHT TIME in the RIGHT PLACE has never changed!