With Prices Soaring, Brands Shift Focus to Customer Experience
The consumer price index increased 8.3% in April, as retailers across the country adjusted prices to keep pace with inflation. Some stores have taken it a step further. More than half have raised prices beyond inflation this year, and 55% have increased prices by 20% or more.
Rather than lowering prices to appease frustrated customers, some retailers are going a different direction. These retailers are working to improve customer experience as a way to reach new and returning customers as prices continue to soar.
“Consumers are putting more thought into where they buy their goods and services, which puts more pressure on businesses to justify higher prices by adding value in other ways. Providing a differentiated customer experience is one way retailers can add value,” says Jennifer Stevenson, head of product strategy for Uberall.
Retailers like IKEA, Target, and Home Depot are developing unique online experiences to set themselves apart from other similar suppliers. For IKEA, the Swedish furniture manufacturer, that means allowing customers to try products, like chairs and rugs, in their own homes with augmented reality technology. IKEA’s in-store experience has also been revamped with improved showrooms for consumers to imagine how furniture in their own spaces might look.
“Embracing a hybrid customer experience model that reaches both in-person and online consumers while incorporating next-generation tools like AR and VR will help build trust with consumers long term,” Stevenson says.
In-store sales grew 10% year-over-year in April, while e-commerce sales dropped 1.8%. That shift away from online back to in-person shopping is having a real impact on brand marketing strategies. Rising prices aren’t necessarily dissuading people from shopping, but there is a fine line with customer satisfaction that retailers are careful not to cross.
“Convenience and immediacy are really important to consumers, and increased prices aren’t changing that,” Stevenson says. “This highlights that businesses should embrace marketing strategies and tools that showcase their products and services to local customers. This can lead to increased trust and a more solidified target market.”
Connecting online and offline shopping isn’t just about launching apps with sophisticated technologies. Stevenson says one of the most successful hybrid shopping strategies she’s seen to date involves the use of QR codes.
Best Buy, Staples, and Home Depot have all added QR codes to their bricks-and-mortar stores to make it more convenient for shoppers to get information about the products they sell. Scannable QR codes are used to provide information about anything from product availability to hours of operation and limited-time discounts. People who shop both in-person and online can also use QR codes to browse product information, such as prices, descriptions and availability.
“In a world where everyone has a smartphone, QR codes help bring important information about the company to the individual in a matter of seconds,” Stevenson says.
On the other end of the spectrum, there are also retailers investing in cutting-edge technology. Brands like Balenciaga and Gucci are designing metaverse experiences for customers. Other retailers are investing in augmented reality technology as a way to allow shoppers to see virtual objects in their own natural environments, away from the hustle and bustle of brick-and-mortar stores. AR combines aspects of in-person and online shopping, helping consumers not just view items virtually, but also inform them about the pricing, availability and location of products on store shelves.
“Businesses that embrace a hybrid customer experience model are reaching new and returning customers at greater rates. A mix of both online and offline experiences help satisfy customers who appreciate the conveniences of the digital world but who are also craving real-world experiences again,” Stevenson says. “Businesses that simply focus on one aspect of the shopping habit are missing out.”
Stephanie Miles is a senior editor at Street Fight.