Early in 2022, inflation is expected to reach its highest level in thirty years. The rise is primarily driven by supply issues pushing up costs, particularly in housing and fuel, and is compounded by the ongoing struggle of businesses to fill staff vacancies. 

 

The global pandemic has played a huge role in the global supply chain issues, meaning that local manufacturers can’t source cost effective materials, and local retailers are unable to import and distribute their full suite of products – and what can be accessed, is more expensive that what it once was. The border closures have also contributed to our tight labour market.

 

Welcome to inflation – quite simply a decline in purchasing power. As inflation rises, your $100 in cash buys less and less. This means Kiwis won’t be able to buy as much as they could last year or even last quarter. Your hard earned wages may be stretched to cover the increasing cost of everyday necessities such as housing, food, and transport. 

 

It’s a good time to review where that leaves your business. It’s time to rethink the products and services you’re selling. No doubt supply chain issues have already created disruption, but have you adapted your core range and pricing to accommodate these changes? Many Kiwis will have to manage their money more closely, and we’ve seen this result in two extremes play out in market; 

  • A trend towards mainstream vs premium, specific to everyday items – consumers will be more inclined towards value brands and look for short term benefits, worrying less about quality or longer term returns.
  • Demand for luxury items and experiences grows – as people cut out everyday niceties, they’ll look for ways to celebrate and treat themselves, albeit slightly less often.

 

Make sure you’re competing effectively by adapting your consumer proposition. For example, McDonald’s $1 value items are sure to be well promoted as the restaurant chain uses price to draw people in. What’s your equivalent?

 

We’re here to help. BBT are experts in ecommerce web development and customer journey mapping – we can help you update your ecommerce website to match the changing marketplace, and we’ll work with you on the customer journey to help reduce any loss of business through that channel.

 

As a software development company, BBT’s global software developers are well versed in creating smart business efficiencies, and may be able to help you automate manual processes and further reduce the impacts of inflation on your bottom line.

 

Above all else, we exist to help you grow your bottom line. Contact us today to start a conversation about how we can use smart software and beautiful design to help protect your business from the impacts of rising inflation

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