Inflation, rising costs, energy prices, the cost-of-living crisis global supply chain issues, food shortages and the war in Ukraine. Just as we thought things were going to get better as we emerged from the Covid-19 pandemic we realize that they’re about to get a whole lot worse.
And the combination of all those factors will mean that 2022 and most likely beyond, will be the most uncertain time retail has faced in a generation.
Already around the globe, people are being impacted by rising costs. Even before the war in Ukraine, food insecurity was becoming a major issue. A recent survey by the Food Foundation in the UK found that over a million adults or someone in their household have gone without a meal at all for at least a day in the last month.
And that was before energy costs rose by over 50% when the new price cap was applied in April. And with the prospect of a similar increase to come in October, an already desperate situation for some will sadly only get even tougher.
Which of course means that against this backdrop, predicting their customer’s behaviour has become nigh on impossible for retailers, the only thing about it which is certain is uncertainty.
So, what should retailers be doing to mitigate this and how can they support their customers?
Delivering an effortless experience, one where great customer service is foremost will be vital. After all, in an inflationary environment, one where our household budgets are able to purchase less and less, we will not become inured to the average. Service will need to be consistently outstanding.
And to do that, you need three things. First, to know as much as possible about your customer, second, to be able to deliver that effortless experience and third, to understand how your business runs, at every stage in the process. And for those outcomes to occur, three things need to happen.
The first is not only capturing but interpreting and then intelligently using…..data. Data about everything. Which in turn means that every ‘thing’ needs to be connected to everything. The second is that every application must be visible to every other application enabling a holistic view of not only the customer but inventory, wherever it happens to be in the supply chain. And the third is to be able to drive maximum operational efficiency by understanding every business process in every part of the business and then to be able to optimise and rationalise where necessary.
Where once delivering a great customer experience was seen as a must for both online and physical retail, will consumers now trade this for lower cost / better value? Or will great customer service and experience be even more critical as consumers feel the ever-tightening grip of inflation?
Either way, it has placed a different emphasis on a retailer’s operation and will mean that anything approaching customer loyalty will become an ephemeral aspiration as consumers jump from one to the other, seeking out value, service and price.
Perhaps ’twas ever thus, however, one thing is certain; a lot more will be played out before we truly know how the new retail landscape is going to look.