Navigating inflation as holiday shopping season looms: Sharing insights and tools to survive cost crisis

20 Oct 2022 --- As inflation continues to bite, companies are offering business tips to survive the crisis and encourage consumers to continue shopping. Globally, inflation is high, with companies facing increasing expenses via wages, electricity and supplies. In recognition of the struggle, Chatler Parfume has shared five tips on combating inflation, Vagaro is offering tools to benefit small businesses and ICSC shares insight into consumer shopping predictions.

“Cultivating strong relationships with our customers by putting them first is the strongest pillar in our company. Listening to their needs, especially during trying times, and responding with a solution and a helping hand along the way is ingrained in how our entire team operates. When our customers succeed, we succeed and our relationships are strengthened,” underscores Charity Hudnall, VP of marketing at Vagaro, the online marketplace for beauty and wellness industries.

“Consumers are continuing to spend despite inflation and economic headwinds, and while higher prices will drive some of the increase in holiday spending this year, overall retailers are poised for a successful holiday season,” says Tom McGee, president and CEO at ICSC, adding that shoppers are particularly interested in deals and promotions, and retailers should make the most of deal events and other milestones this holiday season.

Poland-based Chatler Parfume advises that companies have two choices in times of stagflation and crisis: “Cut costs or sell more to maintain profitability.” However, it acknowledges that maintaining profitability can be extremely difficult with the same competition.

Starting this month, LVMH planned to lower its thermostat and light use in its stores to enable a 10% reduction in energy consumption in one year. The move comes after the French government urged the country to reduce its energy consumption amid growing energy crisis concerns.Chatler Parfume advises that companies can cut costs or sell more to maintain profitability.

Survival tips
While the perfume category seems to be stagnated in modus operandi, Chatler Parfume has developed a special Chatler 1 fluid ounces perfume system, specially designed to be sold in times of crisis and inflation in the global markets.

The Chatler 1 fluid ounces features 50% more perfume by volume and 150% by value compared to traditional 3.4 fluid ounces perfumes – “translates into an increase in turnover and margin generated by the store on a single customer.”

“The Chatler 30 ml concept gives users almost the lowest price on the shelf per unit, while the quality of the products remains at the level of the world’s most expensive brands,” says Tomasz Jesionek, global sales director at Chatler Parfume. 

“It’s important when they do not have enough money to continue buying luxury goods.”

The third point is to sell unique products. For instance, The Chatler perfume combines fragrance with skin moisturizing, and its packaging also features Braille for blind people. 

Moreover, 25 fragrances will fit on three feet of shelves due to their size, instead of the average eight of 3.4 fluid ounces, giving a +300% increase in shelf competitiveness, says the company. 

Lastly, spreading sales to different economies around global markets is essential. 

“The time is tough, but I’d be happy to hear that our example helped at least one company to survive,” adds Jesionek.

On the other hand, Vargo is providing relief for businesses by offering its popular add-on features, such as Xero integration, online store and website builder, at no additional cost to the base price. Vagaro is also helping business owners by offering a low payment processing fee of just 1.29% + £0.20.Shoppers are continuing to spend despite inflation and economic headwinds, finds the ICSC report.

The company says the tools have a history of increasing user sales and revenue, which can benefit businesses, especially during these trying times. 

To shop or not?
An ICSC survey of 1,008 respondents finds that increased spending via deals and promotions will remain critical to this year’s holiday shopping season.

Moreover, it forecasts that shoppers will increase their spending by 6.7%.

“Overall, 75% of shoppers noted that they plan to start earlier, identifying product availability (48%) and early deals and promotions (43%) among the primary drivers for their decision, with the top gift category being gift cards (62%),” shares the company. 

Additionally, 89% of consumers note inflation would impact their holiday purchases. These consumers said they would buy brands on sale or promotion (42%), buy from retailers that sell lower-price goods (37%) or do more research online to find better deals (32%).

“Inflation was also the most common reason consumers cited for spending more this season, with 40% identifying it as a key driver, ahead of wanting to go above for friends and family (25%) and planning bigger celebrations (20%),” continues the ICSC.

Moreover, the survey highlights that consumers increasingly use all channels to meet needs and purchase gifts at competitive prices. “Ninety-four percent of holiday shoppers will make both an in-store purchase and an online purchase with a retailer; 220 million people will take advantage of omnichannel shopping overall,” it concludes.

“While we foresee fewer supply chain issues than last year, consumers are concerned about the ability to get their gifts on time and for a good price,” adds McGee. “It’s clear they see click-and-collect and physical retail as a way to ensure they get the gifts they need conveniently and on time. Retailers should keep convenience in mind as they plan for the holiday season.”Chatler Parfume.

Observing inflation
The UK National Office for Statistics shares that the Consumer Prices Index (CPI) rose by 10.1% in the 12 months to September 2022, up from 9.9% in August.

Compared to Q3 2021, beauty and spa services saw a 21% increase in inflation mentions in reviews on Yelp.

Moreover, the company finds that food businesses are experiencing the most significant increases in inflation compared to Q3 2021, followed by restaurants, then businesses in the categories of beauty and spas, arts and entertainment, nightlife and bars and hotels and travel.

According to a survey of 880 respondents by Dubai-based consultancy Insight Discovery, on behalf of the global life assurance company Friends Provident International, UAE consumers are becoming cautious. They are cutting back on discretionary spending due to global inflation.

On a positive note, the survey reveals that only 2% of consumers plan to cut expenses on personal care/beauty/grooming products, holidays, new cars, entertainment, gym membership, home furniture and electronics.

By Venya Patel