Retail Inflation: Can Data-Enabled Road Maps Help Retailers Adapt to Inflation?
Inflation is hitting record highs, with prices rising by over 8.5 percent compared to last year. Key sectors such as food and gas are leading the trend with double-digit price increases, but all retail categories have been impacted.
In this environment, customers are often unpredictable, more sensitive and more demanding. Pleasing the customer is essential to retention and revenue, and rapidly rising prices are challenging retailers to maintain customer satisfaction without losing money.
Brands can’t afford to be in a reactive position right now. Successfully navigating the fluctuating economy will require a thoughtful, informed approach. Retailers must adopt data-driven strategies, relying on analytics and technology to make intelligent decisions on pricing, inventory, promotions and customer experience.
Predictive Analytics
Analytics can explain seemingly unexplainable customer behavior and can forecast future behaviors and priorities to make sure that brands don’t lose core customers. Powered by artificial intelligence, digital experience intelligence tools capture and analyze 100 percent of customer interactions online, providing companies with key insights, pressing recommendations, and data-backed predictions.
Retailers can use this information to determine which products are best suited to price increases, when the best time to make a price change is, and how to adjust inventory levels to reflect shifts in demand. Predictive analytics can also be used to automatically provide tailored pages or products to customers based on customer data, which can boost conversions and loyalty.
Ultimately, incorporating predictive analytics into all aspects of the company will enable brands to use their resources more efficiently, saving them money and improving their ability to swiftly adapt to inflation.
Leveraging VoC Intel
Voice of Customer (VoC) encapsulates customer feedback, allowing businesses to better understand customer preferences, needs and expectations. With ongoing pricing and/or goods fluctuations, it's important that brands are analyzing VoC data to recognize how changes are impacting customers. Business leaders can leverage this information to identify which areas are most frustrating to customers, then prioritize changes to mitigate any revenue loss.
Customer Service Analysis
It’s important to collect all digital customer experience data since many consumers will never reach out after a frustrating experience (they will simply take their business elsewhere). Viewing and analyzing information generated by the customer support team will provide brands with clear and explicit customer feedback.
Customer service analytics can be used to identify major pain points, which teams can use to make informed decisions, in ideal cases providing solutions in real time.
Creating Excellent Experiences in the Unknown
Margin-slimming inflation is out of businesses’ control, but they can control the quality of their customer’s digital experience.
Emphasis should be placed on creating a seamless, personalized customer experience, using data to improve all aspects of the customer journey. If customers are delighted by their experience, they may be willing to overlook select price increases.
To further improve customer satisfaction, brands should consider opportunities for deals/promotions, determining which products are most important to maintain lower prices on. To make up margins, retailers can increase prices of other less sensitive items.
With inflation showing no signs of leveling out, retailers must prepare for the future. A customer-obsessed, data-driven approach will help brands chart uncertain waters. All brands need sophisticated analytics tools and technology to help them overcome inflation challenges with agility and resilience.
Gaby Koren is the chief revenue officer at Glassbox, a digital customer experience analytics company.
