Customer behaviors you’ve come to rely on can change dramatically as a result of an economic downturn.
That’s why, “Preparing for an Economic Storm,” a white paper from Deloitte, notes the need for customer-driven businesses to stay ahead of the curve, so they can reevaluate and react to shifts in client behavior.
For instance, many customers will “trade down” to offset changes (like high fuel costs) in their planned spending. Deloitte suggests you evaluate your product mix and pricing strategies in the context of changes in consumer demand.
Tips on how to best prepare your pricing strategies to reflect new customer behavior:
- Find out which of your product and category offerings are counter-cyclical and might grow during the recessionary period (for example, bench repairs, and silver jewelry might rank higher than important diamond pieces for a while)
- Determine whether you can use target price points based on consumer expectations to reverse-engineer and source products
- Review overall pricing and merchandising to reflect changing buying patterns and drive the right mix and volume
- Consider ways you can save your customer a shopping trip to offset fuel costs
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