Tips For Driving Sales Despite Lingering Supply Chain Ramifications

How brands can help consumers overcome sticker shock

Learn how to market with the modern consumer’s wants and needs in mind at Commerceweek, July 11–12, with brand leaders from Visa, Uber, TikTok and more. Sign up now to save 35%.

Restaurants, grocers and retailers of all kinds this year have been dealing with a scarcity of products in the supply chain due to a lack of everything from labor to shipping containers and air-freight capacity. These ripple effects, of course, are rooted in the pandemic, which has hiked food prices for eateries and grocery shoppers while temporarily shutting down factories and other production operations across the globe that are the lifeblood of retail. 

All of these factors are impacting prices for every brand from McDonald’s to Amazon. In June, we saw this reality in full force during Amazon Prime Day, the sales bonanza put on by the U.S.’ largest ecommerce player and utilized by other major retailers such as Walmart, Kohl’s and Target. Since escalating shipping prices and low product inventory drove up costs, the deals offered weren’t as lucrative for consumers compared to Prime Days of recent years. 

Higher prices—especially when combined with people becoming more frugal while staying at home for months and months—mean consumers will be experiencing sticker shock for the foreseeable future. Such inflation presents marketers with a real challenge because sales events will make margins razor-thin even though discounts are popular with today’s largest demographic: Millennials.

While the inflation problem is real, restaurant, grocery and retail brands should play the long game and lean into loyalty to drive consumer spend. Here are three ways they can do it. 

Create a winning mobile customer experience

Mobile is increasingly part of how brands win on customer loyalty. Consider that 187.5 million Americans—which is roughly half the population—use mobile to shop while 86% of buyers will pay more for great customer experience (CX). 

With that in mind, today’s best mobile-app experiences include shopping features that eliminate friction. For instance, The Home Depot app’s in-store mode includes a store map that offers the stock status and bay number of items. Additionally, The Home Depot’s “Pro” customers can use loyalty benefits such as renting tools on credit. 

Another example is American Eagle Outfitters, which has many stores located inside malls—a real barrier for shoppers during the pandemic. Therefore, the brand added trip-tracking for curbside and order-ahead features to its mobile app, dramatically cutting down on CX friction for both customers and store associates. This example shows why it’s important for brands to invest in mobile CX that works hand-in-hand with their brick-and-mortar locations. 

Bring omnichannel to life

With the prices on store shelves unusually high, brands need to think cross-channel to engage customers and promote loyalty. Customer segmentation is one way innovative marketers can bring an omnichannel strategy to life.

Take The RealReal, a luxury consignment platform that wins over its young-adult customers with its sophisticated CX. The brand created customer profiles for markets where it has store locations and meshed the profiles with data-driven digital, social and mobile strategies to grow its market cap to $1.95 billion. During the pandemic, it even grew customers by more than 20% during some months. 

Then there’s Brookshire Grocery Company, a supermarket and pharmacies chain in the U.S. Southwest that allows customers to opt in to its wine and beer text clubs for targeted messaging. Using segmentation practices, these two brands built targeted rewards programs for loyal customers, which is increasingly a strong method of holding people’s shrinking attention in our fragmented media world.

Offer meaningful rewards

Retaining customers is increasingly difficult because shoppers have so many social and digital channels—Instagram, TikTok, Etsy, Instacart and Goldbelly, just to name a few—to steal away their attention. One way restaurants, grocers, retailers and other brands have addressed the attention issue is building up their rewards efforts. 

Particularly, they are embracing meaningful rewards by putting money back in customer’s pockets. Venmo, Home Depot and Plow & Hearth are offering 6% cash back for various purchases, while Burger King, Dallas BBQ and Albertson’s are making similar offers via digital channels. Such rewards work because they are frictionless—customers save money without assistance from a brand by linking their credit card to a rewards program. And consider that 82% of Americans will shop more often with retailers that offer cash back.

Supply-chain problems and subsequent-inflated pricing aren’t, unfortunately, going away any time soon, as industry observers expect it to last into 2022. Consequently, marketers for restaurant, grocery and retail brands should have a layered approach for driving revenue, with mobile CX, omnichannel innovation and rewards at the heart of their strategies.