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shopper just finished buying groceries using Verifone payment solutions. she is shocked after seeing how much groceries have increased in cost.
5 Ways to Pivot Your Strategies

Inflation’s Impact on Retail

Editorial Board

As the world emerges from the pandemic, everyone now grapples with a very different kind of threat – the crippling economic effects of inflation. While some demographics experienced financial hardships during COVID, others had more shopping time and discretionary income. Inflation, by contrast, is simply reducing purchasing power across the board.

According to a recent McKinsey study, 90% of consumers have noticed price increases. They’re holding onto their dollars tighter, and TruRating’s data scientists are already seeing a 10% spike in consumers that shop around before making a purchase. Consumers are also becoming more strategic about when and how they shop, as noted by a 10% increase in the use of shopping lists for goods like groceries.

With suppliers also facing cost increases and raising their prices, retailers are left in the middle with an open-ended and painful question of what to do next. If retailers suffer a 6% rise in costs and simply raise prices by 6%, customers will take notice. Bottom lines will likely take a worse hit from the response to this change than the financial impact of cost increases alone.

shopper checking out at her favorite store using a Verifone payment device

77% of customers are loyal to retailers that share their values

TruRating Data

As a retailer, you can take a more prescriptive approach:

  1. Match price to perception. According to TruRating, consumers are moving from high quality items to high value items, as seen via a 40% drop in luxury retail compared to pre-covid levels. Focus on certain product lines and products within those lines for pricing tests. Remain competitive on products that have the strongest impact on your brand’s perception and value, and test pricing on products that play a less significant role.
  2. Take a market-by-market approach. Inflation is not hitting every region the same way. You may notice that consumers in California, for example, place more value on organic produce, while consumers in Georgia place more value on price. Understanding the behavior of your consumers by geography is critical to making adjustments that will reduce the impact to your bottom line and shine a light on new revenue opportunities.
  3. Get segmented with your promotions. Combat the impacts of inflation by understanding which customers are most driven by promotions. Then, personalize offers instead of going broad. This will limit the quantity of goods that require a price reduction while still moving inventory quickly. Early bird sales and members only discounts are two examples that create a sense of urgency and can provide your most loyal customers something special.

    Tip: APM platforms offer built-in marketing capabilities and extend reach to all active users. Verifone's certified APM partners can enhance your segmentation for increased results.

  4. Align with customer values. TruRating data shows that 77% of customers are loyal to retailers that share their values, a far higher number than retailers who offer a loyalty program alone. Learn the values of your customer base and connect the shopping experience with those values to play the long game. If your consumers value sustainability, embed it into the in-person and digital experience, incorporate it into value propositions, make it a part of your packaging, and highlight it in promotional efforts.
  5. Kick loyalty into high gear. It’s more important than ever to keep existing customers. If your brand is known for good service, don’t let your service levels drop. Keep a close eye on store-level customer experiences, as tough times are ideal for showing dedication to your current base. Customers are more likely to recognize your efforts and become brand advocates as a result.

Knowing which way to steer the ship in an ocean full of opportunities and inevitable storms is difficult. The core of making sound and equitable decisions lies within your ultimate destination – and that is your consumer.

TruRating for Verifone
Verifone partners with TruRating so you can hear from 80% of customers in-the-moment by alternating survey questions at the POS. TruRating then pairs responses with transactional data, giving you visibility into how each area of your business impacts customer spend, sentiment, and loyalty.

To immediately unlock insights at the POS for your business today, reach out to your Verifone Account Executive or reach out to

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