The clearest takeaway from listening to brand operators and analysts is that inflation doesn’t affect all customers equally. Instead, what Paul do Forno of Deloitte Digital described on Honest Ecommerce is a market “bifurcation.” High-end shoppers with disposable income are largely continuing their spending, especially on luxury goods. But for the lower and middle parts of the market, the squeeze is real. These consumers are changing their behavior by trading down to private label, delaying discretionary purchases, seeking discounts, and prioritizing value above all else. Understanding which of these camps your core customer falls into is the absolute first step.
This consumer-side pressure is happening at the same time your own business costs are rising. As Mike Jackness pointed out on Honest Ecommerce, brand owners are often the first to see inflation coming through increased shipping and raw material costs. On The Jason & Scot Show, the hosts have repeatedly analyzed how this dynamic plays out, noting that shoppers are becoming more sensitive to shipping costs and overall price. This creates a difficult balancing act. Your margins are getting squeezed from both sides: rising costs and price-sensitive customers. This pressure is so unique that Bill D'Alessandro, on the EcomCrew podcast, even called it a specific kind of “ecommerce inflation,” where the costs of running a digital business are rising faster than the headline numbers.
This naturally leads to the central question: should you raise your prices? The consensus is that you can’t simply pass on every new cost without a strategy. Doing so risks alienating the very customers who are looking for value. In an episode of The eCommerceFuel Podcast specifically about pricing, guest Drew Marconi emphasized the need for a structured approach. Instead of guessing, you should be testing new price points methodically. Not every product has the same price elasticity. You might find you have more room to raise prices on your signature hero product than on a more commoditized accessory. Other hosts noted that major CPG companies are aggressively raising prices, indicating that consumers do have some capacity to absorb increases if the brand value is clearly communicated.
Beyond just raising prices, the smartest operators are adapting their entire offer. Jim Cockrum on Silent Sales Machine Radio suggested one of the most resilient business models right now is the Amazon “replens” model, which focuses on stable, in-demand consumables that people need to buy repeatedly. This insulates a business from swings in discretionary spending. You can also adapt your product mix to changing consumer needs. This might mean introducing smaller, more affordable pack sizes, creating bundles that increase perceived value, or leaning into product tiers that cater to different budgets. The goal is to give the cash-strapped consumer a way to keep buying from you, even if it’s at a lower price point.
Finally, inflation is a forcing function to get your house in order. It punishes undisciplined businesses and rewards operational excellence. This is the time to focus on protecting margins everywhere you can. In several podcast appearances, Bill D'Alessandro has stressed the importance of negotiating with suppliers, managing your inventory to avoid both stockouts and overstocking, and holding enough safety stock to weather supply chain volatility. It’s also a time to get ruthless about costs. Analyze your marketing spend, your software stack, and your shipping strategy to find inefficiencies.
While rising costs and shifting consumer habits are challenging, many hosts see this as an opportunity. It forces a level of discipline that builds a healthier, more resilient business in the long run. By understanding your specific customer, getting smart about eCommerce pricing, and tightening up your operations, you can navigate the pressures of inflation and emerge in a stronger position.