Right now it’s nearly impossible to turn on the news or go online without hearing or reading about inflation and how it’s affecting consumers and our economy. With US inflation at its highest in three decades, it’s hard to ignore it any longer. Inflation slashes a shopper’s buying power and eats into their discretionary income, which in turn chips away at a retailer’s sales and earning potential.
There’s not an easy or simple answer as to how much or for how long inflation will affect retailers. There will always be a demand for staples like food and clothing. However, many shoppers are limiting their purchases to the bare necessities and opting for the cheapest options and best deals. The holidays also play a role because some people are splurging on gifts and special meals. After the holiday’s end, we’ll probably see that many consumers will try to once again curb their spending and forgo extras. Then again, there are always people who cope with hardships like economic uncertainty and the ongoing pandemic with retail therapy.
Bottom line is that there are a lot of factors at play with inflation that you should consider. But today we’re keeping it simple with a few tips for you to practice so you can navigate these trying times and keep your business afloat.
Raise prices if you need to
Between inflation and the ongoing supply chain crisis, it’s an incredibly challenging time for retailers to run a business. If your operating and supply costs are going up, you’ll probably have to increase your prices. The good news is that you’re not alone. Many other businesses are in the same boat and navigating these choppy waters too. The best way to handle a price increase is to be open and upfront with your customers. Explain why you had to up your prices and let them know that you understand many of them are also facing economic burdens as well. Your transparency will help you keep your customers’ trust and also help them to understand that you’re not increasing your prices to take advantage of them. If possible, give them an estimate as to when you think your pricing will go back to normal. Right now so many people are going out of their way to rally around small businesses. You’ll find that many people will be understanding of your current situation. Continue delivering the highest quality of customer service to show your customers that you respect them and appreciate their patronage.
Nurture past clients
Sadly you might find that some of your clients aren’t able to afford to support you right now. Even the most loyal customers will have to take a break from spending during hard economic times. As a retailer, your job isn’t to try to convince them that they can and should continue to buy from you right now. That’s only going to seem insensitive and make you seem out of touch. Instead, think about the long game. Eventually, inflation will come down, your business costs will even out, and your unemployed customers will have some expendable funds again. Your goal is to make sure that your past clients haven’t forgotten about your business. Stay active on social media and utilize email and direct mail marketing so that you remain on your customer base’s radar. You can’t expect them to magically waltz back through the door, ready to swipe their credit cards in a few months if they haven’t heard from you. Don’t let people forget about the amazing products and services you have to offer.
Manage your inventory
Now more than ever it’s critical for you to have a handle on your inventory. You should always know what SKUs you have in stock and how many of them you have. Supply chain issues are a major frustration for shoppers right now. The last thing you need is for customers to shop at one of your rivals because you’re out of stock or because you have orders that you can’t fulfill. A dynamic POS will help you keep track of your inventory so that you can meet demand. Revel Systems and NCR Counterpoint are powerful POS solutions equipped with inventory capabilities that make it easy and efficient to measure your physical inventory. They also help you with placing product orders at the optimal time which is especially important today with delayed shipping issues. We highly recommend these POS technologies for any retailer aiming to optimize how they stock their supply.
Deliver impeccable service
Let’s face it – right now there are a lot of factors outside of your control. You can’t control inflation, your suppliers, the costs of your goods, your clients’ buying power, shipping times, and so much more. There’s one thing that you can always control and that’s how you treat and service your customers. Delivering helpful, speedy, polite, informative, and compassionate customer service will encourage people to continue buying from you. People may object to your higher prices, your limited inventory, and higher delivery turnaround, but treating them with respect and giving them a positive shopping experience can be the difference between winning their sale or not. Make sure that your staff understands how much your brand values the shoppers and provide them with comprehensive training. The goal is for your team members to know how to handle any situation they may encounter with a client and for them to be experts in your product offering.
This isn’t the first time that retailers have faced inflation and it certainly won’t be the last time. Remember that these hard times will eventually come to an end and keep your head up. Entrepreneurship and running a business has never been easy and you have the skills it takes to keep your store going. Our team at RCS is always here to help our retail clients optimize their businesses. Feel free to reach out if you’re interested in a POS demo or want to learn more about how our services could help you.