Lance Goodridge, Executive, Global Analytics & Consulting, IRI06.20.22
Price sensitivity has shifted throughout the pandemic, and in today’s inflationary environment, elasticity is likely to make a comeback. Brands that have recently felt insulated from price sensitivity could begin to see sharply declining product volumes with continued substantial increases in price.
IRI’s recently published report, Managing Price During Turbulent Times, highlights five key tactics, summarized below, that brands can take into account when preparing for an environment of higher prices:
With these five tips, brands will be well-equipped for the future and prepared to emerge stronger from these challenging conditions.
About the Author:
Lance Goodridge is an experienced marketing and management consulting professional with more than 25 years’ experience from IRI, Accenture, Marketing Management Analytics and The Cambridge Group.
IRI’s recently published report, Managing Price During Turbulent Times, highlights five key tactics, summarized below, that brands can take into account when preparing for an environment of higher prices:
1. Investing in Innovation Is Key
Value does not just mean price. Consumers will look for value as they seek justification to not switch to a less-expensive brand. Offering products with special benefits, packaging or ingredients will go far in supporting these higher prices in both the short and longer term.2. Promoting Products You Know You Can Supply Will Be Essential
As prices continue to rise and the focus returns to market share, promotions provide a vehicle for consumers to manage their spending. In this supply-constrained environment, it’s critical to keep incentives targeted to products you can keep in stock and top of mind.3. Stay Current with Emerging Consumer Responses
Be ready to switch tactics in pricing strategy and promotion overlays as soon as changes in demand are detected. Consumer behavior will shift as prices rise and shoppers feel the impact to their wallets.4. Focusing on Assortment and Considering Pack Alternatives Is Important
As prices rise, some shoppers may begin to opt for smaller items they can afford. Producers need to be ready for this shift by offering the right assortment of variety and pack sizes. Understanding the right balance of items that drive shelf productivity with item incrementality is essential in retaining buyers within the franchise and at retailer locations.5. Target Audiences Based on Responsiveness to Price
By offering unique promotions to each audience in your shopper database, brands can target various consumer groups with differential price sensitivities to meet them where they are and drive purchase behavior.With these five tips, brands will be well-equipped for the future and prepared to emerge stronger from these challenging conditions.
About the Author:
Lance Goodridge is an experienced marketing and management consulting professional with more than 25 years’ experience from IRI, Accenture, Marketing Management Analytics and The Cambridge Group.