How’s Inflation Affecting Retail?
It’s safe to say that inflation is affecting all of us. The costs of the goods and services we purchase regularly have been increasing and it’s chipping away at our wallets, spending habits, and overall morale. As a retailer, you’re facing these issues both in your personal and work lives. To help you navigate your business through these trying times, we’re sharing a few key things to know about how inflation is affecting retail.
At the start of the year, many consumers were shopping with the business as usual mindset. For most people, their biggest concern was the availability of the products they wanted because of the ongoing supply chain issues. Now, shoppers are opening their wallets with more consideration. People are more likely to ask themselves “Do I need this?” before making a purchase. Retailers can expect to see consumers spending less money on non-essentials so they can put their money toward paying for the higher prices of their daily necessities like food and gas.
Less foot traffic
Everyone is reeling from the increase in gas prices. As prices remain high and continue rising, we can expect to see brick-and-mortars experiencing a decrease in foot traffic. Shoppers are cutting down on their trips to the store, trying to go out only when needed. People will also continue to make more purchases online for bot both convenience and as a way to save on gas.
Fractured brand loyalty
Inflation is starting to break down the loyalty shoppers have to their preferred brands. More people are opting for name-brand options when possible because of the lower prices. Finding the most competitive price is more of a priority than buying their go-to brands. People also might start to prioritize cost and value over quality as well.
Now that we’ve highlighted some of the challenges inflation is presenting, we’ll share some best practices for how your retail business can handle these obstacles:
- If you have to raise prices, increase them gradually
- Adjust store hours so you don’t waste money on labor costs during slow periods
- Cut back on promotions to balance out your increased operating costs
- Explore e-commerce options
- Use a POS that offers instant inventory visibility
If you’re interested in finding business solutions that can help you through the challenges of inflation, feel free to contact us for a demo.