With wider economic conditions tough, interest rates stubbornly high and the future uncertain, value for money is at the forefront of consumer’s minds when looking to part with their hard-earned cash.
And retailers needs to consider value in their offering, whatever level or sector of the market they’re in.
What are the 7 P’s in retail?
And this includes taking a magnifying glass to all 7 key areas of the business: product, price, promotion, place, packaging, positioning and people.
In the current market, businesses are being scrutinised not only by consumers, but the government too. Supermarkets came under fire this week, with the likes or Sainsbury’s and Tesco appearing in front of MPs in parliament to discuss food price inflation and why prices are still rising when commodity and wholesale costs are dropping.
During recessionary times, retailers face many challenges, such as reduced consumer spending and increased price sensitivity, making a value proposition even more attractive. And its value positioning is one of the key reasons Primark posted a robust quarter 3 sales performance this week.
What are the different types of value proposition?
But businesses can still pivot to create value by employing certain strategies. We bring you 10 ways retailers can create value within their product proposition and offer…
1. Competitive Pricing
Retailers can offer competitive prices to attract cost-conscious consumers. This can involve reducing profit margins or negotiating better deals with suppliers to lower costs. Price comparisons with competitors and offering discounts or promotions can also be effective.
2. Bundling and Value Packs
Retailers can create value by bundling products together or offering value packs. Bundling allows customers to save money by purchasing multiple items at a discounted price, providing them with a sense of getting more for their money.
3. Enhanced Customer Service
Exceptional customer service can differentiate a retailer during tough economic times. Retailers can invest in training their staff to provide personalised assistance, quick problem resolution, and a positive shopping experience. By building strong customer relationships, retailers can enhance perceived value.
4. Exclusive Deals and Loyalty Programs
Retailers can create value by offering exclusive deals and discounts to loyal customers. Loyalty programs that provide rewards, discounts, or points accumulation can help retain existing customers and encourage repeat purchases.
5. Product Differentiation
Retailers can differentiate their product offerings by focusing on unique features, quality, or sustainability. This approach targets consumers who prioritise value over price and are willing to pay more for products that meet their specific needs or align with their values.
6. Flexible Payment Options
During a recession, consumers may face financial constraints. Retailers can create value by offering flexible payment options such as instalment plans or buy-now-pay-later services. These options can make purchases more affordable and attractive to customers.
7. Online and Digital Presence
Building a strong online and digital presence is crucial during a recession. Retailers can invest in e-commerce platforms, online marketplaces, and social media marketing to reach a wider audience. Offering online-exclusive deals and providing convenient shipping and return options can enhance value perception.
8. Focus on Essential Products
In times of economic downturn, consumers prioritise essential products over discretionary ones. Retailers can adjust their product offerings to focus on essential goods and necessities. This strategic shift can help meet consumer needs and maintain sales volumes.
9. Collaboration and Partnerships
Retailers can collaborate with other businesses or suppliers to create value-added bundles, joint marketing campaigns, or exclusive products. Partnering with reputable brands or local businesses can enhance the perceived value and broaden the customer base.
10. Clear Communication
Transparent communication about value propositions, pricing, and any cost-saving measures can help build trust and loyalty with customers. Retailers should effectively communicate the benefits of their products, promotions, and any unique advantages they offer during a recession.
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