Tackling the cost of living crisis

It’s no secret that the cost of living is having a knock-on effect on sales and is putting pressure on businesses to perform.

Paul Adams, head of enterprise retail, at Trust Payments warned that retailers will need to be resilient over this next year as the cost of living crisis puts pressure on the purses of both retailers and consumers.

As an impact of tighter restrictions John Place, head of trading at Cherryz, says more shoppers will ditch loyalty to shop around more to get the best prices on their essentials, which is why many opt to shop on an app or online.

Matt Pyke, managing director at Fly High Media, believes consumers are becoming more price-conscious and want the best value for their money. They will be shopping for better deals, doing more research and price comparison. It is the brand’s job to provide enough information and resources to help consumers make informed decisions.

Paul Adams continued to say, “Shoppers will shun big brands in favour of discount brands to save money on their shopping. Inflation isn't going away anytime soon, which means businesses have to find a balance between the need to keep prices affordable for customers versus diluting margins as costs increase. Pushing back on increases to suppliers is a big challenge for retailers, but one that customers expect us to do. To prepare for this, businesses will need to weigh up how much they can afford to absorb.”

Retaining loyal customers

Value is more important than ever when it comes to what your business has to offer. Patrick Lowe, AVP business management at PFS pointed out customer service is key during these changing times.

“Customers have the option of pivoting between online and in-store to browse and deliberate before they make their purchases. With high-end jewellery a significant and emotional purchase, retailers need to ensure customers receive the same bespoke, personalised experience that they would in-store. The online customer service team should be as well informed as in-store sales staff, and able to communicate details about the product range and stock levels, as well as any other services available.”

Matt Pyke explores how now is the time to look into the best ways to retain customers:

“Retailers should double down on their customer experience and retention strategy if they want to stand out from the competition and thrive. Firstly, test the user’s journey from when shoppers land on your site, then work on the after-sales customer service. Think about loyalty schemes, remembering customers’ birthdays, etc.”

According to Mika Tomada, PR Specialist at Plant Sumo, streamlining payment methods will help keep customers on board as a smooth transaction may increase revenue and reduce the risks of items being left in the shopping basket if a transaction is complicated.

Gaining the competitive advantage

A consequence of the cost of living crisis is that online shopping will become more competitive and John Place says retailers will have to be smarter.

“The market will become hugely competitive due to the fact that customers will simply have less money to spend. Those that do best for their customers will survive, those that lose focus and ignore the trends we've outlined will have a tough time of it.”

For retailers looking to expand their opportunities, implementing omnichannel strategies could be a promising option. Brad Houldsworth, head of product at Remarkable Commerce says “if brands hadn’t before, now is the time to look at a bespoke ecommerce platform where it is easy to grow at pace and easily adapt your website as you scale to meet the demands of the customer across all channels.

“This allows you to be endlessly customisable with your site - and stay on top of trends and consumer preferences, such as third-party integrations like buy-now-pay-later.”

Mika Tomada agrees with the approach of focusing on more than one channel, saying, “Omnichannel presence is one emerging eCommerce trend that might keep you competing in 2023. Digital and mobile purchasing are more prevalent than ever in these times. The majority of customers who are making in-store purchases utilized their cell phones to check product details or conduct in-store research on products.

This indicates that even though a client is currently in a shop inspecting an item, they still prefer to be allowed to look into it online.”

Embracing new trends

Augmented reality has taken the retail space by storm and according to a McKinsey report 48% said they are interested in using metaverse technology (i.e. AR & VR) to shop in the next five years.

Experts have echoed that this new shopping trend is here to stay. Mika Tomada says the ability of eCommerce businesses to provide better client experiences and come up with innovative solutions is significantly impacted by AI. There is a great deal of opportunity for AI solutions to assist online businesses with their everyday activities while also making them highly focused and effective.

Patrick Lowe said that social media platforms are one to step up in the new year as Instagram is increasingly becoming the new online marketplace. The introduction of the ‘Buy Now’ button, across the metaverse and beyond, has meant that purchasing products is easier than ever. Social commerce enables retailers to significantly reduce their customers’ path-to-purchase creating a heightened experience leading to brand loyalty.

Matt Pyke agrees that this will change the way shoppers interact with products, thanks to advancements in augmented reality technology, shoppers will be able to experience products like never before in 2023. Merchants can create immersive AR experiences that allow customers to "try on" clothes, accessories, and other products before making a purchase.