As inflation bears down, retailers can uplift consumers

This moment in time continues to serve up an unfamiliar combination of factors that are complicating life for retailers and consumers alike.

Prices are rising, supply chain issues are lingering, and some consumers are feeling increasingly queasy as they pull out their wallets to make purchases. But all is not lost. While the current backdrop may seem challenging and complex, brands have tools at their disposal that can boost sales and drive loyalty by giving consumers what they need most.

Inflation impact
As you know by now, inflation has become a big part of recent conversations. According to the Associated Press, U.S. inflation recently soared to 7%, its highest level in nearly 40 years. Higher-than-expected prices are being reported at grocery stores, gas stations, restaurants and clothing retailers. The housing and motor vehicle sectors are also taking an inflation hit.

Of course, it didn’t come out of nowhere. Well-documented labor shortages, inventory shortfalls and logistical challenges are driving much of it, increasing the cost of doing business and eroding bottom lines at companies across categories.

Not to jar you with optimism but these challenges, however significant, actually reveal an opportunity for brands if they look closely enough.

Consumer concerns
Let’s step back and look at what factors are weighing on the minds of average consumers in 2022. The most common worries are around inflation, high shipping costs, long delivery times, difficulty finding products and a lack of deals/coupons. Nearly three in four U.S. consumers said they are more concerned than a year ago about inflation and more than half said it’s harder to sustain their household today than it was a year ago.

The million dollar question, of course, is “How is all of this affecting consumer behavior?” We saw some clear trends at the outset of the pandemic that appear to be holding up. For example, when people aren’t able to get their favorite things on time or at the right price, they look for deals and coupons, they search more broadly online, and they put a greater emphasis on things like free shipping. By addressing these behavioral changes, advertisers can seize the moment to meet critical consumer needs, winning people over and making a strong case for long-term brand loyalty.

As prices climb, people will look for more coupons and shop more extensively online. The smartest brands will be adjusting their strategies accordingly.

Brand opportunities
With inflation rates and the costs of goods still rising, people are feeling both mentally and financially stretched. As March rolls on, they’ll be looking to shake off the winter blues but they may need a little nudge in order to feel confident about spending. In a word, they need deals.

This may be greeted with an eye roll by brands struggling with tight margins and rising costs of their own. But they are wise to consider that this moment has opened an interesting window in terms of brand loyalty. New and emerging brands especially stand to gain here as consumers are willing to consider alternatives, in search of better deals. Effective digital promotions always encourage consumers to try new brands and this is especially true now as many people are switching to lower-priced brands and/or buying more generic brands.

Here’s to a spring full of positive momentum for brands and the people who love them.