In a world where consumers expect online retailers to “meet or beat competitors’ pricing,” this year will prove challenging with inflation.
The US Bureau of Labor Statistics released its Product Price Index for February 2022, reporting wholesale prices had jumped up 0.8% for the month and in the past year have increased by 10%. Raw materials, finished goods, gas and transportation prices all continue to increase and will ultimately impact and increase the end price of products for consumers.
According to the National Federation of Independent Business, 79% of American retailers surveyed last month reported price increases. Though price hikes are not surprising at this time of global unrest with the supply chain, there are several factors you should complete before changing the price.
Update the Product Offering:
Reducing underperforming SKUs, adding private label products, bundling items to provide additional value and reducing quantities (think 8-ounce packaging instead of 10-12 ounces) will all help keep the price stable for consumers
Boost productivity:
Making your business much more efficient from automation with software solutions that reduce the need to hire additional workers to ship more product. It also allows you to have a clean read on which inventory is performing and which is not to make accurate decisions in streamlining products on hand.
Outsourcing:
Selecting a third-party fulfillment service to position products nearer to customers and cut down on shipping time and costs may make more business sense to overcome inflated prices throughout the supply chain.
A new concept that’s rising across the country – dark stores. They’re local micro-fulfillment centers strategically placed in old store fronts and warehouses that allow for cheaper fulfillment of online orders, but are “dark” to the public. To read more click here.
Consumers are well educated after the last few years of online shopping. Many larger retailers can match or beat prices, but getting to the point of uniformity is challenging. “Online competition is a force for price uniformity, and therefor also inflation equalization” in this era of constant supply chain issues.
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As inflation continues to impact prices and your profit margins, partner with OPAL to increase efficiencies through automation.
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