Craft Focus - June/July 2022 (Issue 91)

87 BUSINESS increases are also more palatable than a sudden hike - planning this now and forewarning your customer base is a wise move. Doing some competitor analysis, retailers may find that they’ve not raised their prices in some time when everyone around them has - it’s always good to sense check within the industry. Once businesses take the decision to make the price rise leap - they should give it six weeks then review. They can analyse which products are still selling, where the conversion rates drop and if customers are giving negative feedback. Retailers should then revisit their profit margin list - if a low profit margin product isn’t selling even with a price increase it may be time to discontinue it, or they may want to offer it in a bundle with some higher margin products. KEEP CUSTOMERS AT THE HEART OF BUSINESS Keeping their customers at the heart of the business always helps retailers through the toughest of times and of course future proofs their loyal base. Small businesses especially shouldn’t shy away from talking to their customers about the cost of living pressures. Retailers can test out any price increases to further understand their customers wants and needs - and then only increase prices incrementally. BE CLEAR Authenticity and honesty matters to consumers, especially with bad news, so be clear. Tell customers prices are increasing and avoid other terminology when communicating this. Customers are still buying and spending but confidence is low so communicating value to customers is crucial - do this often and consistently. James Leinhardt, CEO of Levitex - the ‘Sleep Posture Experts’ said, “we’ve been very honest and open about price increases with our customers, we’ve communicated it via both organic socials and email, and the reaction has actually amounted to an increase in sales”. GLOBAL EVENTS The Federation of Small Businesses (FSB) recently updated information for small businesses in relation to the humanitarian crisis in Ukraine, “As the Russian invasion of Ukraine continues to disrupt the global economy, UK small businesses must keep a close eye on their operations and get advice. If you export or import from either country or the region, you must obey economic sanctions for your own business and for your supply chain. With the likelihood of cyber warfare rising, all businesses should also check their cyber strategy and update software”. There’s no one-size fits all answer. However, retailers who give time to review and analyze exactly where their costs and profits are right now have more power. Managing this profitability roller-coaster and walking the line between what they need to charge and what their customers pay will be key for business owners navigating 2022. THE RESILIENT RETAIL CLUB www.resilientretailclub.com

RkJQdWJsaXNoZXIy MTA0NTE=