Amid inflation and ongoing supply chain issues, retailers are eager to deliver value and savings to shoppers. Learn how new retail technology tools can help.
Amid inflation and ongoing supply chain issues, retailers are eager to deliver value — and savings — to shoppers. Embracing new retail technology tools can help them do just that.
It’s no secret among shoppers or retailers that inflation is at all-time high — from food and gas prices to the cost of rent and consumer goods. According to the most recent Consumer Price Index (CPI) report, prices rose 8.5% in March of this year compared to 2021. While inflation tends to fluctuate over time, research shows this is the most significant increase between two years since December 1981.
Between rising fuel prices, supply chain challenges, and the ongoing Russia-Ukraine conflict, these factors form the perfect storm for shoppers: Less savings, low inventory, and higher delivery fees.
To meet the moment and adapt in the face of inflation, retailers need to be proactive — and above all willing to shift their mindset in favor of retail tools and technology that can deliver real value to shoppers.
Now more than ever, that means understanding customers on an individual level, by helping them find personalized discounts and savings, anticipate inventory, and have an above-and-beyond in-store experience that guides them through every step of their shopping journey.
How Does Inflation Affect the Shopping Experience?
So, what exactly is going on? Skyrocketing prices can be attributed to a few key factors, including:
- Ongoing supply chain disruptions, which have been exacerbated by the pandemic and the ongoing Russia-Ukraine conflict (Russia is responsible for exporting a significant amount of oil, metals, grains, and more).
- A spike in demand (and “pent-up demand ‘’ as the pandemic wanes.) Paired with supply chain disruptions, high demand and limited supply leads to rising costs.
- Rising production costs and labor shortages as the price of raw materials or wages go up, coupled with labor shortages across the supply chain, costs inevitably rise.
The effects of inflation are rippling across industries — but no one can feel it more keenly than everyday consumers. As gas prices rise and grocery store trips amount to more expensive totals, consumers are experiencing inflation in three distinct ways:
1. High prices for food and beverage
As many consumers continue to shop in-person at their local brick-and-mortar retailers, they are aware that prices are surging.
Research from Walmart, the largest grocer in the United States, shows that consumers are increasingly attentive to how inflation affects their shopping experience, even if they aren’t actively changing their shopping habits in favor of cheaper brands.
Among the most noticeable changes include shrinking package sizes, less promotions, higher prices for meat, produce, and more. For retailers, the challenge is finding opportunities for savings — and highlighting these to shoppers in a convenient, instantaneous way.
2. Low inventory in the wake of supply chain disruptions
Inventory management is a central part of any brick-and-mortar retailer’s success. A seamless, customer experience requires that retailers know how to stock their shelves strategically to balance online orders and in-store demand.
But in the wake of supply chain disruptions, labor shortages, and the ongoing Russia-Ukraine conflict, brick-and-mortar retailers aren’t able to replenish their shelves as quickly as usual.
Part of delivering a satisfactory in-store experience for shoppers is providing the products they need — when they need them. This requires a new approach that prepares shoppers for product shortages ahead of time, and offers relevant items in the meantime.
3. Higher fees for delivery services
As the cost of food rises, the premiums associated with delivery services inevitably increase as well. For many third-party delivery services, this includes a service fee that covers operating costs, like shopper operations, insurance, background checks, and customer support.
With inflation on the rise, covering these costs requires an even higher service fee that shoppers may not be willing, or able, to afford. What does that mean for brick-and-mortar retailers? An excellent in-store experience is more important than ever, as shoppers will likely avoid costly fees and return to the aisles (which they’re already doing in large numbers.)
How Can Retailers Combat Inflation to Meet Consumer Needs?
Meeting consumers’ dynamic needs is no small feat — but with the right strategy and digital retail tools shoppers and retailers are better equipped to navigate the pitfalls of inflation and disrupted supply chains…
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To read the rest of the article, visit Technology and Inflation: What Retailers Need to Keep Up.
