Mapping Consumer Behavior in 2022: Managing Price During Turbulent Times

SUMMARY

MANAGING PRICE DURING TURBULENT TIMES

The first two years of the COVID-19 pandemic created an unusual environment for price sensitivity that at times made the concept of elasticity seem irrelevant. But this is partly because retailers, afraid of losing customers, have been reluctant to fully pass manufacturers' price increases on to shoppers. But as the gap between the producer price index (PPI) and consumer price index (CPI) grows, retailers will soon have no choice but to raise prices.

In this inflationary environment, elasticity will likely return and brands that once felt immune to price sensitivity could see product volumes drop off a cliff. This IRI report highlights several actions that brands and retailers should take now to avoid this scenario.

This article is the first in IRI's "Mapping Consumer Behavior in 2022" series, with additional installments covering other pressing topics such as e-commerce, media activation and product innovation.

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