Just when the economy seems to be finding its’ footing, there is another threat on the consumer’s horizon: The possibility of inflation. This is an issue I’ve written about extensively on this site (click here for the list), as the risk of inflation seems to go hand-in-hand with most economic recoveries. That’s because supplies dwindle during recession, and purchasing often picks-up before manufacturing has a chance to meet that demand.
This time, though, the increased demand is coming from all over the globe. Fast-growing economies in China and elsewhere are creating new affluence… and increasing demand from a whole new group of global consumers. Read details about these and other inflationary issues in a story found in today’s New York Times (click to link).
Implications: For companies who cut prices as a survival strategy through the recession, it is more important than ever to focus on value. By value, I don’t mean the “deal” you offer. I mean this fundamental question: How does your product, service or company add value to the consumer’s life?
Quality? An amazing purchase experience? Service after the sale? A lenient return policy? The more ways a customer values the products and services you offer, the more likely you’ll be able to take the focus off price… which is good when prices are likely to increase due to commodity costs.