Want to know the top thing that will scare away your customers? The economy. But a close second is inflation. When economic growth is low, inflation is high, and unemployment is prevalent, that creates a phenomenon known as “stagflation.”
In this article, we’ll walk you through what stagflation is, how it impacts retailers, and what you can do to fight it.
What is stagflation?
Normally, the economy balances between the fluctuation of inflation and unemployment rates. Both have an inverse relationship, meaning as one increases, the other decreases. However, stagflation is characterized by high inflation and unemployment rates during slow economic growth.
How does stagflation impact retailers?
Retail businesses specifically are impacted by the effects of stagflation. If retail customers are losing their jobs, they have less to spend. And at the same time, if retail stores are expected to raise prices in order to keep up with the demand of the economy, then customers will have less money to spend on higher priced items.
Slow growth in the economy may scare away consumers, but if retail businesses advance to a higher level of offered communication, organization, and personalization to increase consumer confidence, this period of stagflation will be subsided for the customers' sake.
What preventative measures retailers can take now
Adapting to the market changes
Retailers must proactively adapt their business practices according to current and forecasted economic conditions.
The emphasis on proactivity means staying on top of economic metrics, demand forecasting, consumer patterns, and industry trends.
By proactively shifting business operations according to the changing market conditions, adapting to the current needs of the company, and preparing for what is to come ahead in the market, store owners become more resilient to changes such as stagflation.
Continuous improvement for retailers
Every employee of a retail business plays an important part in the store, big or small. That’s why it’s essential to always be building toward continuous improvement—and not just when businesses are feeling inflationary pressures.
For example, meeting together with your sales team to talk about what the store has done well, and what your team could be doing better. This includes reviewing goals and making new ones by analyzing data to refine the current and ongoing efforts of the business. Companies will be better prepared for economic hardships when they strive to continuously improve.
Establishing good finance practices
Finally, as retail store owners assure to prioritize good finance practices, they will find stability and success. Proactive financial planning and budgeting will give them greater freedom amidst times of stagflation and unstable economic times. Through this practice, they will get their business through this economic adversity and come out on top.
How Clientbook can help you fight the effects of stagflation
Along with these tips, Clientbook can empower retail store owners to fight stagflation.
Clientbook is a CRM built specifically for retailers. With it, you can proactively prepare and establish relationships with consumers before any periods of stagflation transpire.
Clientbook specializes in customer engagement. Through Clientbook, retailers communicate directly with their customers in personal interactions and timely correspondence for promotions and other marketing strategies. Clientbook fills retailers with more confidence during times of stagflation because they have a competitive advantage with high-level customer engagement.
Conclusion
Although nothing can be done from a store owner’s point of view in stopping economic challenges from coming and affecting the country, there are actionable steps which they can take to prevent the storm of stagflation knocking down their retail business.
Adapting to changes in market conditions, implementing continuous improvement practices, and striving for optimization amongst the business will give retail stores a step ahead.
If you’re interested to see how Clientbook can help get you started, book a demo here.
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