How inflation affects e-commerce business – Jungle Scout research

How inflation affects e-commerce business – Jungle Scout research

In 2022, the inflation rate became dangerously high. It rose to 9.1% in the USA in June. 13% of consumers experienced a significant decrease in revenue in the first half of the year. 38% of consumers say their income is unstable, and 34% rely on financial assistance or unemployment benefits.

What happens during inflation?

Many e-commerce companies force to reduce product inventory and/or charge more for products to maintain their bottom line. High inflation has driven costs from raw materials and consumables to labor and shipping rates. PartnerTrade presents a comprehensive report on consumer trends related to inflation so that you can adjust your business processes more efficiently.

Consumer Trends Report

Jungle Scout research tracks how consumers react to inflation. More than 3 out of 4 consumers have adjusted their spending – half of them buy only well-known brands or discounted products.

Products and categories most affected by inflation

Inflation and the corresponding customer response significantly affect different industries and product categories.

  1. Grocery. One of the categories most affected by inflation.
  2. Clothing. The cost of clothing is increasing in all directions.
  3. Electronics. A global chip shortage in consumer electronics has slowed production and sales.

Recommendations for e-commerce brands to combat inflation

Increase your overall marketing efforts

Social media has become influential for consumers in deciding which products and brands to buy. Almost 70% of people start their product search on social media, and nearly half (48%) read comments on social media to find out what other users think about a brand.

Video can be a massive win for e-commerce brands on social media and e-commerce platforms. Jungle Scout research found that 37% of consumers prefer video over traditional social media posts, and 35% purchase a product after watching a brand go live.

Another way to attract buyers on social networks is through influencers, primarily those who represent products in their content on YouTube. This video platform is the most trusted among consumers to find and buy products.

Think strategically about price increases

An increase in the cost of goods becomes a necessity during rising inflation. However, nearly half (48%) of consumers say consistently lower prices are the main reason they continue to shop at their favorite brands. A strategic change in price and product catalog can help offset rising costs, minimizing the risk of losing loyal customers.

Almost 80% of consumers search for products online. A reasonable price, discount, or coupon will attract more customers. Use browser extensions to track product prices in one channel. The Amazon Assistant plugin searches for the best price across all available product listings or multiple platforms.

Review product inventory management

Deal with delivery issues and changes in product demand by overhauling your inventory management system.

Keep more items that sell well on hand. This can give you an edge over your competitors, help you avoid stockouts, increase conversion rates, and even help you negotiate pricing or payment cycles with suppliers.

Find ways to keep your cash flowing

Inflation affects all levels of e-commerce, so finding ways to cut costs without reducing productivity is easier said than done. Because suppliers likely face the exact effects of inflation as your brand, negotiating supply costs can be difficult.

However, if you have long-standing partnerships with suppliers, they may be open to negotiating a more extended payment cycle. This will help maintain a more stable cash flow.

The future of inflation and e-commerce

Many factors affect e-commerce brands, from the cost of supply to changes in the labor market. These factors adjust consumer buying behavior and change product pricing, inventory management, and marketing budgets.

Even as inflationary pressures begin to ease, they will still influence the strategy of most e-commerce brands.

If you have already decided on pricing, budget for expenses, and marketing strategy – contact PartnerTrade. We will help reduce logistics costs by choosing the optimal conditions, route, and cost of transporting commercial cargo.


How do consumers respond to inflation?

Three out of four consumers adjust their spending. 50% buy only well-known brands or products on sale.

What content in social networks will help attract new customers?

The best option is video content and lives broadcasts with product demonstrations by influencers and famous people.

How to effectively manage product stocks?

It is necessary to have a more extensive stock of goods in case of a delay in delivery or other unforeseen situations.

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