There are ways that retailers can manage the impact of inflation on their business. Using a loyalty program to understand your customers better is a key starting point.
Everywhere you turn, you probably hear it over and over again: inflation is on the rise. The cost of living is increasing, wages are not keeping up, and the economy is in turmoil. For the past few years, it seems like we haven't been able to escape global challenges.
Retailers continue to get hit with a continuous barrage of unbelievable circumstances, yet some of them are still not only surviving, but thriving. How can this be? In this blog post, we'll explore how inflation is impacting different groups of people and how retailers are getting to know their customers. We'll also offer some tips on how to leverage challenging times to increase customer loyalty using a Consumer Insights Report recently published by TruRating, a customer sentiment solution provider.
If you haven't read the report which you can find here (report), we highly recommend you do so. TruRating collects their own data using their patented technology and does an excellent job analyzing it to provide readers with a deep understanding of customer sentiment data.
The Impact of Inflation
Inflation - if you didn't know - refers to the rate at which the prices of goods and services rise over time. With this in mind, it’s important to remember that while inflation may cause the prices of some goods and services to increase, it may actually cause the prices of other goods and services to decrease as shown in this recent US government study seen here (report). From October 2021 to October 2022, items such as women's outerwear, televisions, and smartphones all decreased in price.
Additionally, while inflation impacts the purchasing power of currency, people are also affected - some more than others. For example, someone who owns a house will likely see the value of their home increase as inflation causes the prices of homes to go up. On the other hand, someone who is renting a home will likely see their rent increase as landlords attempt to keep up with rising costs.
In TruRating's report on the impact of inflation on consumers,
• 62% of families and seniors noticed a big change in living costs, versus 54% of youth noticing the same change.
• 63% of people in the US are driving less due to increasing gas prices.
• 71% of people in Australia and New Zealand are cooking more at home.
The bottom line is that inflation impacts everyone differently. Some people will see their cost of living go up significantly, while others may only see a small change. It all depends on individual circumstances.
The Importance of Understanding your Customer
It's time to get real here.
Retailers have been affected by the same global events everyone else has endured. Yet, some are thriving. How? Well, we understand that inflation impacts everyone differently. This means that behavior is going to change differently for different customers. Get to know your customer.
By understanding their customer, retailers will be able to provide them with the products, services, and support that they need and value. This will help to build loyalty and trust between them and their customers, leading to repeat business and referrals.
What are some of the current churning behaviors and values?
• 63% of consumers say that the increasing cost of living has changed where they shop.
• 85% of people in the US compare product prices before making a purchase.
• 74% of consumers in the US shop with a shopping list.
It is so important for retailers to understand these kinds of behaviors and answer questions like:
• Are we making it easier on our customers?
• At what rate are we winning product comparisons?
• Which of our products are on our customers' grocery lists?
• Do we adhere to our customers' values?
In order to best meet the needs of customers, it is important to take the time and really invest into understanding them and what they are looking for. This can be done through advanced customer sentiment analysis platforms, surveys, interviews, and a dedicated Loyalty platform.
Building Customer Loyalty
Once customer data and sentiment are collected, retailers can begin to focus on establishing a few custom personas for their own customer base. This is where a dedicated Loyalty data platform comes in handy to help retailers really understand the different buckets their customers fall into, and to target those specific groups with specialized offers.
To keep customers loyal, companies must be able to provide them with personalized or exceptional experiences. But retailers can’t expect to cater to each individual customer that walks through their doors. This is just not viable. Instead, categorizing a group of customers or creating personas would be a much more workable task. This way, retailers can personalize the customer experience without overextending themselves.
Accuvia’s VIA|loyalty platform allows retailers a deeper understanding of their customers and can provide data and insights to categorize them into personas unique to the retailer. These groups can then be targeted with specific deals or promotions that line up with their needs or values. Doing this will keep customers engaged, in turn, building a community of brand ambassadors.
Additionally, to bring added value to the customer experience, TruRating recommends:
Communicate brand values - Especially those that resonate with customers.
Empower staff - Treat them like brand ambassadors rather than simple cashiers.
Offer quality products and services - Even with inflation, customers will still look for the best quality at a given price point.
While we can’t tell you what the next global crisis is going to be, we can tell you how to leverage challenging times to increase customer loyalty using advanced retail technology. Knowing your customer is pivotal to a retailer’s CX optimization. And while inflation is the key event affecting most consumers now, it won’t always be. Having a system in place that allows for consistent learning and development will ensure retailers’ durability during challenging times.
About Accuvia Software Group:
ASG helps retailers optimize store operations through our advanced retail platforms. Our systems are designed to elevate customer engagement and provides retailers with a tool to gather and view store data in a centralized location, and in real time. Our solutions include:
VIA|store Advanced POS software, made to adapt to your stores
VIA|central office Enterprise data hub platform, the home of your store data
VIA|loyalty Retail loyalty platform, the engine that drives customer loyalty
TruRating helps retailers hear from 80% of their customers in-the- moment by alternating survey questions at checkout. TruRating then combines payment-validated responses with transactional data, giving retailers visibility into how each area of their CX impacts customer spend, sentiment, and loyalty. With these real-time data insights, retailers can take action quickly and confidently.
Visit us in New York at NRF 2022
Accuvia Software Group will be exhibiting at the NRF show in New York in January in Booth #3781 at the Javits Convention Center. We will be demonstrating a comprehensive solution for retailers that includes our POS, Central Office and Loyalty solutions along with a number of solutions from our partners. Together we make a powerful team ready to bring the store of the future to our retail clients today.
Find out how all of these systems work together to allow retailers a deep understanding of their customers in real time at NRF 2023: Retail’s Big Show. Schedule a meeting with us using the link below.