The Goliaths of retail have been enjoying record profits in spite of, or perhaps because of, record inflation. Meanwhile, small- and medium-sized businesses (SMBs) have borne the brunt of inflation's effects and are making drastic cuts in labor and desperately trying to conserve resources.(1) To disguise the sticker shock of higher prices, some companies have resorted to stealth tactics such as "shrinkflation" and a more recent trend, "skimpflation." Mikel Lindsaar, founder and CEO of StoreConnect, cautions SMBs against engaging in these deceptive practices and advises investing in eCommerce 3.0 technology to compete as Davids against the eCommerce Goliaths.
SAN FRANCISCO, June 12, 2023 /PRNewswire-PRWeb/ -- Record inflation is a worldwide phenomenon and is accelerating at a record pace. In the aftermath of the pandemic, inflation in the U.S. rose to 8.5%, the highest it's been since 1982.(2) In 2022, Moody's Analytics reported that the average household in America was spending $433 a month more for the same goods and services than in 2021.(3) Some retailers are giving the illusion that they haven't raised their prices as much, or at all. However, savvy shoppers will easily recognize that the same product they've been buying for years has suddenly shrunk, hence the term "shrinkflation." And there's a new game in town, "skimpflation," another inflation-fighting tactic companies are employing where they decrease the quality of their goods and services. Skimpflation is harder to detect because retailers resort to using cheaper ingredients or reformulating their products, changes that are impossible to spot on the surface. Mikel Lindsaar, CEO and Founder of StoreConnect, empathizes; "Retailers are struggling too, contending with higher prices for supplies and ongoing labor shortages. But skimping on quality and service can be much more costly in the long run, leaving businesses wondering why they are suddenly worse off than they were before."
Skimpflation ultimately hurts a company's bottom line and reduces customer retention and loyalty. A UJET report surveyed 1,600 consumers and revealed that 73% would cancel providers and subscriptions that offer terrible customer service. Of those surveyed, 66% said they had experienced skimpflation in the past six months, and 87% said they would spend less or stop doing business with companies that skimp on customer service. Their primary complaints were related to quality of service (60%), wait times (58%), and expertise and customer support (54%).(4)
SMBs have been in a constant struggle to stay ahead under increasingly hostile economic conditions. Lindsaar notes, "Inadequate resources, limited cash flow, tighter budgets, and supply chain breakdowns are more than enough reasons for smaller businesses to try to cut corners wherever they can. However, quality and service should never be sacrificed in the name of budget cuts. A better strategy for SMBs is investing in smarter technology." By automating repetitive tasks and time-consuming business processes and procedures, employees can focus on more important pursuits that enhance the company's productivity and efficiency, ensuring they continue delivering high-quality products and exceptional customer service.
StoreConnect is the only fully-integrated eCommerce, point-of-sale, content management system, and CRM platform powered by Salesforce. SMBs can realize the full potential of eCommerce 3.0 and manage their websites, customer data and support, marketing, checkouts, and payments all on one, fully scalable, fully customized, and fully integrated platform. StoreConnect is Salesforce-native, so all data and data processing takes place on the world's number one CRM, Salesforce, rather than a third-party server so SMBs can take full advantage of all of the Salesforce platform tools.
Lindsaar observes, "Skimpflation is a symptom of a larger disease. SMBs shouldn't have to turn to deceptive practices as a remedy, which could be more harmful in the long run. eCommerce 3.0 provides a single source of truth for business owners to realize more profits through strategic investments rather than hasty cost-cutting decisions that can damage their brand."
StoreConnect is Time. Well Spent.
About StoreConnect
Mikel Lindsaar, CEO and Founder of StoreConnect, is an experienced technology entrepreneur whose mission is to infuse small- and medium-sized businesses with the power to be successful in eCommerce 3.0 and scale to meet growing demand. Small companies can't waste time setting up their business on a platform only to repeat the process by changing platforms when they want to scale, nor do they want to waste time figuring out how to integrate multiple platforms. StoreConnect (built on the World's Number 1 CRM, Salesforce) gives clients a complete, powerful, configurable eCommerce and CRM solution where they can manage their website, online and in-store sales, provide amazing customer service, run all their digital marketing campaigns and have up-to-date detailed metrics, reporting and full understanding of their customer. They were awarded Salesforce's 2021 International Partner Innovation Award of the Year for the Retail sector and are changing the ease with which small businesses are run ─ with a manageable price tag. StoreConnect is Time. Well Spent. Visit https://getStoreConnect.com/.
References:
1. Ewall-Wice, S. (2022, April 26). As inflation soars, major corporations are posting record profits. but small businesses are feeling the squeeze. CBS News. cbsnews.com/news/inflation-profits-corporate-small-business/
2. Amadeo, K. (2023, April 1). US inflation rate by year: 1929-2023. The Balance. thebalancemoney.com/u-s-inflation-rate-history-by-year-and-forecast-3306093
3. Iacurci, G. (2022, November 25). Inflation boosts U.S. household spending by $433 a month, on average, Moody's finds. CNBC. cnbc.com/2022/11/25/inflation-boosts-average-household-spending-by-433-a-month-moodys.html
4. UJET. (n.d.). Customer service skimpflation: The impact on sales, retention, and Loyalty. UJET. ujet.cx/resources/reports/cs-skimpflation-sales-retention-loyalty-report-lp
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