Inflation: adapt your business to new consumer behaviors

The Covid-19 crisis, the war in Ukraine, massive stimulus plans… there are many explanations for the current inflationary period.

In this context, shoppers are increasingly preoccupied by sudden increase in prices. 58% of shoppers¹ say that this is one of their main worries.

To get around this, they are adopting new shopping habits: looking for price reductions, anticipating purchases for the holiday season, trying out new brands…

Read about the impacts of inflation on consumer shopping habits and how businesses are adapting.

The impacts of inflation on consumer shopping habits

1. Increased focus on prices

In any inflationary context, shoppers pay greater attention to prices with 90% of shoppers² saying that they have become more frugal.

For example, they prefer shopping online to get the best deals. Nearly 41% of shoppers³ believe that for the same price they can find products of superior value online.

They also look for reductions, coupons and cashback offers. 90% of shoppers⁴ are increasingly drawn to these rewards and 71%⁵ spend more time researching online, before buying, to get the best value for their money.

2. Diminished customer loyalty

During contexts of inflation, shoppers are less loyal to their preferred brands⁶ and tend to switch towards more economical options.

When prices increase 97% of consumers⁶ are more inclined to try out new, cheaper brands.

They are also more likely to buy from several different retailers. The proportion of consumers buying from more than five retailers⁵ increased by 28%⁵ from 2021 to 2022.

3. More control over spending

Inflation is leading shoppers to monitor their budgets more closely. For example, they are anticipating the holiday season and shopping early to avoid price increases, and 56% of shoppers⁵ will delay or cancel their purchasing projects when prices are increased by too much.

Shoppers also find various strategies for limiting spending, including buying less (40%⁷), choosing cheaper brands (21%⁷), preferring DIY gifts (21%⁷)…

How businesses are adapting to these new shopper behaviors

Provide the possibility to pay in installments

To remain competitive during inflationary periods, it has become vital to provide BNPL (Buy Now Pay Later) options.

These installment payment options allow shoppers to pay easily in a series of smaller amounts (payment in 3 or 4 installments…). This encourages them⁸ to commit to their purchase despite increasing prices: 48% of shoppers⁹ use BNPL for purchases which would not otherwise fit in their budget.

From a company perspective, installment payment is a fantastic business opportunity and provides many benefits:

• Increased conversions
• Improved customer loyalty
• Better consumer engagement

Inform customers about upcoming price increases

In an inflation context, rising prices can have a negative impact on customer engagement as potential shoppers might not accept your price increases and may turn towards your competitors.

To avoid this, as a business you should warn your customers of your intention to raise prices (at least one month beforehand¹⁰). You should also increase prices gradually so that the increase is not seen as too brutal by customers.

It is essential to communicated transparently. If a business does not communicate clearly on their intentions, the risk is in creating frustration among their clients which will automatically result in a drop in sales. For example, shrinkflation strategies can negatively impact your customers' commitment to your brand. Shrinkflation¹¹ is a sales strategy consisting in masking inflation¹¹ by presenting a product in smaller quantities using the same packaging and price as before.

Set realistic prices

To remain competitive during periods of inflation, businesses have to enter a price war¹² and constantly monitor the competition. This competitive watch is essential. Amazon uses it to adjust their prices several times¹³ a day meaning that this global giant can react to changes within the hour.

To do this effectively requires the use of a Product Information Management (PIM) solution equipped with a Smart Comparison module. This will greatly increase productivity in the competitive analysis of your competitors: optimum price monitoring, analysis, warning signals… It will also increase competitiveness and allow you to determine prices consistent with the market.

¹ Kossmann, M. (2023, April 26). Inflation | E-commerce : comment survivre à la crise du coût de la vie ? Forbes France.
² Chardenon, A. (2023, September 8). Fêtes de fin d'année : comment augmenter ses ventes e‑commerce ? Salsify.
³ Mirakl. (2023, January). Comment les consommateurs façonnent le eCommerce en 2023.
⁴ Systems, W. (2022, October 4). Survey: Inflation Driving 90% of Consumers to Seek Discounts and Cashback Rewards When Shopping Online. Prnewswire.
⁵ Kim, E. (2023, February 14). 3 effets de l'inflation sur le comportement des consommateurs. Criteo.
⁶ Comarketing-News. (2023, March 7). La fidélité aux marques résiste mal à l'inflation.
⁷ Suknanan, J. (2023, September 28). 2 in 5 Americans say inflation will change their holiday shopping habits this year — here's how to save money. CNBC.
⁸ Buquet, R. (2022, July 29). « Buy Now, Pay Later » ou comment acheter en période d'inflation. Journaldunet.
⁹ Caporal, J. (2023, August 3). Study: Buy Now, Pay Later Use declines for third straight year. The Motley Fool.
¹⁰ Cuisset, T. (2023, April 18). Comment justifier la hausse de ses prix sans perdre de clients ? Hubspot.
¹¹ Da Sois, J. (2023, September 14). Inflation, « shrinkflation », « cheapflation »... Que signifient ces mots entrés dans le quotidien des Français ? Le Figaro.
¹² Tanir, B. (2023, June 27). 5 Optimal Ways To Use Dynamic Pricing To Win In E-Commerce. Forbes.
¹³ Pereira, S. C. E. (2022, September 19). How to Set the Right Prices for Your E-commerce during High Inflation Rates [Video]. Lengow.