What’s Your Strategy Against Rising Costs? A Guide for Consumer Product Companies
In these times of rising costs, women-owned businesses in the consumer products sector face unique challenges. The inflation rate in the US recently soared to 9.1%, its peak since 1981, escalating input expenses and narrowing margins. Supply chain issues and the ongoing labor shortages add to the pressure, making it crucial for businesses to navigate these hurdles with strategic acumen.
At ELLIS & LUEUR, we understand that the path to overcoming these challenges involves a blend of resilience, innovation, and strategic foresight. For businesses grappling with these economic shifts, adopting a comprehensive approach to managing revenue growth is essential.
Amid these pressures, manufacturers and retailers are striving to maintain value for their consumers. This calls for a dynamic strategy focusing on enhancing supply chain resilience, boosting operational efficiency, and implementing design-to-value initiatives alongside revenue growth management (RGM).
RGM stands out as a swift avenue to deliver value. It’s time for consumer product companies to take the lead by crafting and executing extensive RGM strategies, aiming to expand profit margins, foster beneficial retail partnerships, deliver unmistakable value to consumers, and solidify their standing for future endeavors.
The Imperative of RGM
Initially, many companies raised prices hoping to mitigate rising input costs, anticipating a swift return to normalcy. However, the persistence of inflation necessitates further adjustments. Retailers, now more than ever, seek partners who can help deliver exceptional value to consumers, echoing the sentiment of Walmart US CEO John Furner about combating inflation through value.
The pandemic has also reshaped consumption habits, demanding flexibility in product offerings and channels. In this landscape, companies must develop robust and adaptable strategies to endure ongoing economic and supply pressures, leveraging a comprehensive suite of RGM tools.
Four Steps to a Resilient RGM Strategy
- Evaluate Your Portfolio and Pricing: Leaders seize opportunities in turbulence. By optimizing pricing and portfolio for your company, retailers, and consumers, you can take strategic actions that would be challenging under normal circumstances. Adjusting prices and product mixes towards more profitable offerings while being mindful of key price points can significantly enhance value perception among consumers and retailers alike.
- Reassess Promotional Strategies: It’s a moment to rethink promotional investments. Leading companies understand that not all promotions drive category growth. By adopting a test-and-learn approach, businesses can identify and scale high-ROI promotions, thus improving margins and fostering growth.
- Rebase Customer Investments: Industry leaders are recalibrating their investments in promotions, fulfillment, and retail partnerships. By focusing on efficient, win-win partnerships and allocating resources towards high-value areas, businesses can drive growth and mitigate rising costs.
- Plan for the Present and Future: Acting decisively now while preparing for the future is key. Investing in analytics and building a multi-year RGM roadmap can help businesses stay ahead, ensuring strategies remain flexible and responsive to changing market dynamics.
At ELLIS & LUEUR, we champion the success of women-owned small businesses in the consumer products sector. Embracing a strategic approach to RGM can help navigate the challenges of inflation, securing growth and profitability for your business and your retail partners. Let’s harness our shared ambition for true results, transforming challenges into opportunities for innovation and resilience.
