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Perceived value, not price alone, drives customer loyalty during inflation—brands that raised prices without reinforcing value proposition saw customers defect to competitors rather than absorb the increase.
Premium retail's edge comes from making customers feel the brand itself is special, which justifies price positioning; this emotional connection must precede or accompany any price increase to avoid preference shift.
In inflationary environments, competing on price becomes a race to the bottom; CMOs must invest in value communication and brand differentiation to retain customers who would otherwise migrate to lower-cost alternatives.
Conversation 48
When brands increase their perceived value, they make the customer feel their brand is special and price follows. In these last few years while we were living in inflationary times, some brands simply increased prices and if customers don’t see the value for that price increase they just shift their preference to other brands or products.
Jack Stratten, What-Shein-Can’t-Do: The Rise of Premium Retail
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OFFBounds Source · 48·
