If you thought that the price of commodities has stabilized and you do not need to restock your inventory of grocery products soon, then you might need to re-think. As consumers gear up to manage the crisis, it is only natural that they will want to stockpile the products that they had purchased earlier. The primary reason for this is that customers do not want to see ‘out of stock’ notifications. Socio-economists mention that these notifications have more of a psychological effect than an actual economic one. Hence, consumers often resort to panic-buying in fear that the available products presently might be ‘out of stock’ in the future. This leads to the stockpiling of products. However, as a supplier, you will need to ease the customer and assure them that even if the consumer wishes to stockpile, you have sufficient products to ensure that there is no shortage of essential items like grocery products. Some of the methods by which consumer stockpiling is affecting grocery pricing and online shopping are as follows
Increasing the price of grocery items
If customers use a grocery mobile app to place an order for essential items, chances are there that they can place orders in bulk. This can result in reducing your inventory of essential commodities extensively. If this happens for several apps, then the price of essential items will increase automatically. If you want to cap the price of grocery items, you could limit the number of grocery items that a single customer can purchase on a single billing. This can reduce the pricing of grocery items and also prevent customers from stockpiling readily available products. It will also prevent an artificial demand, and the price of essential items will not increase unnecessarily. Market observers mention that the consumer’s desire to stockpile essential items is the primary cause of the increasing price of essential commodities. This can be easily controlled if customers are convinced that there are many essential items available in the market.
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Preparing for the holiday season
Despite the given situation, customers would like to be prepared for the holiday season. With travel relaxations being introduced, it is natural that family members would like to pay each other visits during the holiday season. Given the scenario, it is natural that customers would like to stockpile essential items, especially food items. This would keep them prepared for the holiday season. Additionally, it would be natural to purchase and keep products that would last for a more extended period, i.e., durable essential items. Usually, these products are priced higher than perishable items. When customers stockpile these products, the price of these commodities will naturally increase. However, this cannot be prevented, but this is temporary, and after the holiday season is over, stockpile tendency will reduce.
Products like hand sanitizers and gloves are in high demand, and customers tend to stockpile these items. The prices of these items have increased as customers fear that these items too might go out of stock. The issue with these items is that manufacturing these products takes time, so most customers tend to stockpile these items. However, it is important to help them understand that there is no problem in the production item of these products.
Thus, the stockpiling of products has led to an increase in grocery items and essential products. If these items’ prices have to be reduced then, customers have to be convinced that there is no shortage of products in the market. Therefore, the price of products is very much driven by consumers’ demand and stockpiling of essential items.