As inflation impacts consumer spending habits, consumer packaged goods (CPG) brands and retailers face the challenge of attracting customers while maintaining profitability. In this article, we will explore four effective strategies to drive sales and build customer loyalty in the face of inflation.
- Define Value to Consumers
Delivering value to consumers goes beyond simply lowering prices. A recent survey revealed that ease and convenience topped the list of factors influencing grocery purchases for over three-quarters of US adults. Price and discounts followed, along with loyalty, familiarity, and product/service quality.
To meet customer expectations, retailers must delve into their customer base and identify what truly matters to them. While price remains crucial, shoppers may also value sustainability, functionality, innovation, or the ability of a product to bring joy. Understanding these preferences enables brands to tailor their offerings accordingly.
- Stand Out with Engaging Partnerships and Experiences
Brands can differentiate themselves by offering consumers unique products or experiences. An example of successful collaboration is Frito-Lay’s partnership with Netflix to promote the latest season of “Stranger Things.” The livestreamed concert featuring popular artists generated significant media impressions, resulting in an 11% sales increase for Doritos.
However, it is important to note that partnerships should provide genuine value to fans and consumers. Collaboration for the sake of collaboration rarely yields positive results. Brands must ensure that their partnerships resonate with their target audience and enhance the overall customer experience.
- Provide Perks and Discounts
While reducing prices across the board may not always be feasible, brands can still provide customers with perks and discounts to earn their loyalty. Here are several effective approaches that do not significantly impact the bottom line:
- Product bundles
- Free mini samples
- Including a new product with purchase
- Membership upgrades
- Waiving delivery or return fees
- Referral discounts
The key is to avoid overwhelming consumers with irrelevant offers. By understanding their preferences, brands can provide items or services that align with customers’ interests and needs.
- Simplify the Customer Journey
Brands should focus on simplifying the shopping experience to enhance customer satisfaction. This can be achieved through various strategies, such as offering flexible payment options, implementing curbside pickup services, or improving online purchasing processes.
As generative AI adoption gains momentum, retailers are exploring ways to leverage the technology for a seamless customer journey. For instance, Instacart’s plugin for ChatGPT assists users in creating and refining shopping lists, aiming to increase transactions per customer. Walmart utilizes AI for its “Text to Shop” feature, allowing customers to add products to their cart by texting or speaking the item names.
By embracing technological advancements and streamlining the customer journey, brands can provide a more convenient and efficient shopping experience, thereby boosting sales and customer satisfaction.
In conclusion, driving sales amid inflation requires a strategic approach that prioritizes customer value, unique experiences, attractive perks, and simplified processes. By understanding consumer preferences and employing innovative strategies, CPG brands and retailers can navigate the challenges posed by inflation and foster customer loyalty in an ever-evolving market.
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