Inflation is reaching record highs, with prices up more than 8.5 percent compared to last year. Key sectors such as food and gas lead the trend with double-digit price increases, but all retail categories have been affected.
In this environment, customers tend to be unpredictable, more sensitive and more demanding. Keeping the customer happy is essential to retention and revenue, and rapidly rising prices are challenging retailers to maintain customer satisfaction without losing money.
Brands cannot afford to be in a reactive position right now. Successfully navigating the fluctuating economy will require a thoughtful and informed approach. Retailers must adopt data-driven strategies, relying on analytics and technology to make smart decisions about pricing, inventory, promotions and customer experience.
Analytics can explain seemingly inexplicable customer behavior and can predict future behaviors and priorities to ensure brands don’t lose core customers. Powered by artificial intelligence, digital experience intelligence tools capture and analyze 100% of online customer interactions, providing businesses with key insights, actionable recommendations and data-driven predictions.
Retailers can use this information to determine which products are best suited to price increases, when is the best time to make a price change, and how to adjust inventory levels to reflect changes in demand. Predictive analytics can also be used to automatically provide personalized pages or products to customers based on customer data, which can increase conversions and loyalty.
Ultimately, incorporating predictive analytics into every aspect of the business will allow brands to use their resources more efficiently, saving them money and improving their ability to quickly adjust to inflation.
Leveraging VoC Intel
Voice of the customer (VoC) encapsulates customer feedback, enabling businesses to better understand customer preferences, needs and expectations. With constant price and/or product fluctuations, it is important for brands to analyze VoC data to recognize how changes affect customers. Business leaders can leverage this information to identify which areas are most frustrating for customers and then prioritize changes to mitigate any revenue loss.
Customer service analysis
It’s important to collect all digital customer experience data, as many consumers will never get in touch after a frustrating experience (they’ll simply take their business elsewhere). Viewing and analyzing the information generated by the customer service team will provide brands with clear and explicit customer feedback.
Customer service analytics can be used to identify top issues, which teams can use to make informed decisions, ideally providing real-time solutions.
Creating great experiences in the unknown
Margin-shrinking inflation is out of companies’ control, but they can control the quality of their customers’ digital experience.
Emphasis should be placed on creating a seamless and personalized customer experience, using data to improve all aspects of the customer journey. If customers are happy with 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. To make up the margins, retailers may raise prices on other, less sensitive items.
With inflation showing no signs of leveling off, retailers need to prepare for the future. A customer-obsessed, data-driven approach will help brands navigate uncertain waters. All brands need sophisticated analytics tools and technology to help them overcome the challenges of inflation with agility and resilience.
Gaby Koren is the Chief Revenue Officer at Glassbox, a digital customer experience analytics company.