Five ways brands can stay ahead of inflation in 2023
With the holiday season now in the rearview mirror, we settle into 2023 facing the same uncertainty that has shaken consumer confidence and impacted bottom lines for well over a year.
Retailers and consumers are trying to avoid using the R-word – although many feel it is inevitable – and there are even signs that inflation may be slowing down. What is known is that discretionary spending has taken a nosedive as consumers take a wait-and-see approach in an unstable economic climate.
Not that consumers need a full-blown economic crisis to make them uneasy. A year of rising prices on housing, gas, groceries, and other life necessities has left consumers shell-shocked, wondering when it will all end.
Needless to say, inflation is still a major concern for consumers. There are more questions than answers as experts try to forecast what consumer behavior and spending habits will look like in the coming months.
What is the future of retail? What can brands do to stand out in an ultra-competitive market? How will consumer behaviors change? How will inflation affect spending in the year ahead?
Here are five ways brands can weather the inflation storm and stay connected to consumers as we wait for brighter days ahead:
Stand out. Be different.
As if brands needed another challenge, a tough competitive marketplace is now a lot tougher.
As we approached the “endemic’ and the final stages of the COVID-19 global pandemic, the future appeared much brighter as retailers looked to bounce back from the two-year cycle of shutdowns and locked doors.
The pandemic may be over, but so are the federal stimulus payments that helped so many businesses stay afloat. Now we face another crisis, only this time there is no safety net.
And that’s taking its toll on retail once again.
As we entered Q4 a few months back, analysts were predicting some well-known retailers were at the risk of going bankrupt. In recent days, Bed Bath and Beyond announced they faced an uncertain future.
They are not alone.
It’s just the latest crisis facing retailers, and brands are now having to find ways to stand out even further from competitors in an already crowded market. They are looking to give consumers a deeper reason to choose their brand over the competitors, at shelf, online and in marketing campaigns.
Even with an ideal economic climate, consumers have many options when making purchases. These days, with less disposable income across the board, brands need to stand out. They need to be special.
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These days, as consumer confidence is put to the test, that trust is more important than ever.
Omnichannel marketing isn’t a nice-to-have. It’s imperative.
Millennials and Gen-Zers are looking for a more personalized shopping experience and are using various devices and platforms when making purchases.
When the pandemic shut down the world almost three years ago, retail moved solely online and most figured it would stay there after restrictions ended. As the world opened back up, customers flocked back to brick-and-mortar stores while still embracing the convenience and flexibility of e-commerce.
In other words, consumers want that cross-channel experience. Retailers must have a presence on multiple channels. It’s no longer a nice-to-have. These days, omnichannel marketing is essential.
Consumers are looking for the same digital touchpoints in physical stores as they have online. Brands and retailers must have a comprehensive marketing strategy that encompasses physical and digital channels, including in-store, online and social media. Omnichannel marketing should be consistent, with consumers having the same brand experience at each touchpoint. Shoppers want the convenience of shopping wherever, and whenever, is most convenient. Using an effective omnichannel strategy will allow you to stay in touch with your consumers while ensuring a consistent, personalized journey.
Buyers want the same positive experience across all channels. If they can’t get it, they’ll go elsewhere.
Value doesn’t mean cheapest price.
In challenging times, consumers are looking for value, and that doesn’t necessarily mean the cheapest price. Rising prices are challenging for shoppers, but they aren’t making purchasing decisions solely on cost. In fact, price is just one of the pillars for the consumer.
Consumers are looking for value, and brands should be trying to connect with shoppers in new ways to make not only the product, but the experience, special. It’s about creating a ‘wow’ moment and sparking a deeper connection with the consumer.
When consumers are looking for value, the experience is as important as the product. If brands can provide something buyers want while making it a positive experience, consumers will pay for it, in good times and bad.
Yes, discretionary spending is decreasing, but people are still spending. They just want value and trust in the brands they buy from.
Show empathy in times of crisis.
As we learned during the pandemic, in times of crisis, communication across all touchpoints is crucial. Uncertainty gives brands an opportunity to connect and bond with their consumers by showing empathy through helpful, compassionate communication.
To fully understand your customers during a crisis, you must establish a connection with them. Consumers want to feel as though you understand their pain points and struggles. Even during challenging times, customers can remain loyal if you display an empathetic communication strategy.
Let your target audience know that you are aware of their struggles as the cost of living continues to skyrocket. Engage them and create bonds using empathy and compassion across all touchpoints. Make it human.
Human-to-human communication is a powerful marketing tool. Make the connection personal.
Leverage third-party data and customer insights.
As we mentioned above, staying connected to your customer base is essential to riding out an economic storm. These days, consumers are providing crucial data points with the products they view and the items they have in their carts.
A company’s most valuable asset is their data, and third-party market research is vital for growth and innovation. Investing in social listening, real-time analytics and consumer research allows brands to collect, track and analyze insights to understand the behaviors and needs of their customers and prospects.
By harnessing and analyzing this data, you can better understand shifts in consumer behavior and preferences, especially during volatile economic times. This will allow you to adjust your marketing initiatives or create more personalized, direct messages to your target audience.
We’ve spent years building an influential parenting community of more than 250,000 members, and leverage our community with targeted, customized consumer research surveys. The data is collected, parsed and shared with the brands we work with, allowing our customers to get to the heart of what their customers want and deliver marketing, branding and communications strategies across every consumer touchpoint.
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