Forward thinking the key to success
As economic issues continue to worry consumers the need for retailers to think ahead becomes even more pivotal. Food prices are rising, fuel is reaching record highs and interest rates are starting to bite and, consequently, many consumers are looking for cheaper options.
The figures for credit card purchases in Australia for the month of February indicated yet another record high but the growth in the figure was the lowest for 17 years. The trend is no longer a steep incline and a fall could be on the horizon with retailers needing to find ways to combat growing consumer pessimism.
Nestle profited last year from forward thinking, posting a 7% sales increase worldwide as opposed to the industry average of 1.8%. They managed to do this by forward-buying raw materials which helped them negate the rising inflation that hurt many other food companies, while also updating their product range to deal with changing consumer preferences.
Take-away restaurants in the US have begun to offer more items at the magical $1 mark with McDonald’s introducing a small menu of items at this figure and Wendy’s and Burger King selling double cheeseburgers for the same amount. These three companies are all large multinational companies and view this strategy as a means of keeping customers loyal to their brand during hard times while also luring new customers due to the promise of cheaper food.
A reduction in prices while business costs are rising is, however, rarely a wise move and is not suitable for many companies. After all, how are consumers going to feel when the price all of a sudden rises following an improvement in economic conditions?
Businesses do need to be wary of the fact that many of their regular customers will be under financial pressure, putting greater emphasis on the value provided by a business. The understanding of value being more than just a good price is essential; with other elements such as: providing high quality products and warm, friendly and fast customer service also major elements in a consumer’s perception of value.
Forward thinking is ultimately the key to any strong business seeking longevity and, understanding how to implement strategies which will benefit the business long-term and not just in the short-term, is now more vital than ever before.