How Retailers Can Support Customers, Improve Reputation, and Grow Profit Amid Inflationary Pressures
The Economic Situation
Typically at this time of year, shoppers are gearing up for discretionary holiday shopping. But this year, a majority of consumers are feeling the pinch from inflation. With prices for vital everyday items like grocery products jumping 12.4% since the same time last year, shopping for non-essentials has become a stressful prospect with tremendous volatility.
Consumers continue to look for ways to save money, with 85% of shoppers reporting they’ve adjusted their shopping habits as a result of inflation. Numerous consumer polls have shown that shoppers are decreasing their holiday spending due to inflation as they are instead needing to focus on providing food and household essentials. Morning Consult Research Intelligence reports that inflation concern is highest for grocery items across generations, income groups, and regions. Accordingly, recent discretionary spending is reported down for both Walmart and Target.
The Fed has raised interest rates five times already this year and every consumer has felt the effect in one form or another. According to the most recent Household Debt and Credit Report, the quarterly household debt rose $312 billion in Q3, reaching an all-time high. And credit card balances are the highest they’ve been in over 20 years.
“An uncertain economy” is also to blame for recent Amazon layoffs, according to the company. Commenting on spending slowdowns at Target, its chairman and CEO Brian Cornell stated, “So clearly, it's an environment where consumers have been stressed. We know they're spending more dollars on food and beverage and household essentials. They're looking for promotions and are looking for that great deal. And I would expect that promotional focus will continue throughout the holidays."
The Reputation and Loyalty Challenge
At the same time, many companies across multiple industries including retail and consumer goods are reported, fairly or unfairly, to have unsavory price increase practices - raising prices more than necessary to adjust for inflation and gaining record-high profits. When a majority of U.S. households are impacted by inflation, this practice – even when only implemented only by a select few, has the potential to erode trust in all retailers.
Kyle Herrig, the president of the advocacy organization Accountable.Us said, “The recent earnings calls have only reinforced the familiar and unwelcome theme that corporations did not need to raise their prices so high on struggling families.”
The result is that shopper loyalty and trust is being vigorously shaken up.
The Unicorn Win-Win
An auto-replenishment offering gives retailers the distinct opportunity to strike a balance between providing shoppers with much-needed savings at this critical time while also increasing profits. With auto-replenishment featuring brand-funded discounts, not only does the shopper receive the savings benefit, the retailer also collects the recurring revenue derived from the repeat purchases.
Replenium’s Auto-Replenishment platform makes it easy for shoppers to set their items, across the entire store including perimeter, to repeat on a schedule of their choosing. This provides utility and savings to loyal shoppers and creates financial and operational efficiencies for retailers. The convenience for the customer cannot be understated, as the auto-replenishment platform essentially does the shopping for the customer and alleviates the associated stress.
Replenium’s platform integrates within a retailer’s existing ecommerce system and is easily activated online or in-store. Once shoppers are saving time and money through auto-replenishment, their motivation for switching to other retailers or brands is diminished. Additionally, Replenium’s machine learning engine creates personalized recommendations to lead to basket and trip growth over time.
If you’d like to learn more about implementing your own branded auto-replenishment platform with Replenium, contact us for a demo today.