How Can Brands Best Deliver Value to Consumers Battling Inflation
Inflation can cause big problems for businesses and families all over the world. When the prices of food, gas, and transportation go up, it becomes very important for companies that make consumer technology and durable goods to show that their products are worth the extra money.
Though many global markets have been stable in their economic recovery post-Covid-19, that rebound is now slowly losing momentum due to inflationary pressures. This slowdown can be linked to shortages of food, fuel, raw materials, and other necessary resources, as well as ongoing logistics disruption and the conflict in Ukraine.
The COVID-19 pandemic increased the pressure on employers to raise wages due to the scarcity of goods and services. This, in turn, raised the cost of production. The pandemic also led to a labour shortage, which contributed to the acceleration of inflation in 2021.
crucial for brands to understand their customers and the situations they’re dealing with. Companies in all sectors need to be ready to adjust during a time of instability for consumers. Here are five ways that brands can help consumers cope with a prolonged period of inflation and reduced disposable income.
It’s more important than ever for brands to understand their consumers and the circumstances they face. With so much uncertainty in the world, brands need to be prepared to adapt. Here are five strategies for brands to help consumers deal with a sustained period of inflation and less disposable income.
- Demonstrate the values and versatility of food and drink
The pandemic has resulted in some big changes in the food industry. Most notably, packaged brands and retailers have benefited from people cooking at home more, while foodservice companies are still struggling to recover. Prices have gone up, and there is a labour shortage, which is only prolonging the foodservice struggles. The priority for CPG brands and retailers will be keeping production lines moving and products on shelves. They will need to be versatile to meet the needs of consumers.
When it comes to spending on nonessentials, we expect to see a mixed bag. On one hand, rising prices for goods and services will lead to the so-called “lipstick effect,” where people substitute affordable indulgences for more expensive ones. On the other hand, consumers may cut back on spending altogether, opting for cheaper brands or products, buying in bulk, or re-prioritizing their spending.
2. Engage customers in a way that builds loyalty
Today’s customers rely heavily on their phones for everything from entertainment to getting tasks done quickly. Even though in-store shopping trips are becoming more necessary, grocers need to change with the times and adopt a hybrid approach that acknowledges the trend toward online shopping. By creating an integrated, omnichannel experience, you can connect with customers directly, bridge the gap between online and in-store shopping, and build long-term loyalty.
In today’s market, it is more important than ever to have personalized, one-on-one relationships with shoppers. Customers want to feel valued, and that their retailer of choice understands their needs. By establishing a digital ecosystem that works with consumers to get them the products and deals they want, you are letting them know that you understand their needs and that you are there to help them save money.
3. Design products that are multifunctional
As consumer technology and durables advance, we’re seeing a trend of products that can do more than one thing. A perfect example of this is the mini oven. In the past, they were seen as low-quality products. But now, with the option to air-fry or use humidifying steam, many brands have made them much more appealing. In fact, these examples of multifunctional products have seen an astronomical growth in sales of 534% and more than 1,000% respectively. And this trend is only going to continue as value becomes a higher priority for consumers.
4. Consumers who are connected must be catered to
Connected devices are a growing trend in consumer technology. They offer users the ability to tap into the internet of things (IoT) with wearables that are connected to a variety of other devices, from scales to mattresses or sports equipment. This added functionality gives them an extra sense of value compared to the competition.
5. Know Your Consumers Better
The adage “know your customer” is more relevant today than ever before. With more high-quality data than ever before, marketers can not only target customers with highly relevant messaging, but to also understand where they are in the purchase funnel, their demographics, and life stage. However, this data is not just useful in the marketing department, but also to sales. For example, if you know a customer is likely to churn, you can proactively reach out to them with additional training, incentives, or a “one more thing” about a new product that you want them to try. This could prevent a customer from churning or even increase their lifetime value (LTV).
With the rise in the cost of goods and services, the increased complexity of supply chains, the continued disruption in logistics, and the ongoing impact of the COVID-19 pandemic, brands will have to work harder than ever to meet the needs of their customers. Consumers continue to be the driving force behind innovation, but they also expect more from brands. It’s not enough to simply meet their needs, but to anticipate what they need before they even think of it.
Inflation is putting a lot of pressure on businesses and households, and it doesn’t seem like it will end anytime soon. This makes it very important for businesses that make products that people use every day to show that their products have a lot of value. This will help them keep their customers and make money even though inflation is making it hard for everyone.
We hope you enjoyed our article about how to deliver value to consumers battling inflation. With this knowledge, we know that you can make the most of your business and provide a valuable service to your consumers. So, what are you waiting for? Contact us today by visiting www.philomathresearch.com
