Let’s talk about two high-impact challenges businesses face today: GST and inflation hikes.
In 2023, the GST rate in Singapore has increased from seven to eight percent after 15 years of stability. But that’s not the end; a second increase is bound to happen in 2024.
This can only mean one thing: businesses must find creative and sustainable ways to combat the impending financial obstacles and emerge victorious from a significant GST impact.
This blog post will explore how GST and inflation hikes can affect your business and discuss actionable strategies you can use to mitigate the risks.
How GST Hikes Can Affect Your Business
The impact of GST on business operations can vary depending on the specific business and the industry it operates in. Generally, GST can affect businesses:
As retailers, you are significantly affected by GST hikes as you may have to pay more tax on the goods you purchase from suppliers or manufacturers.
As a result, you may have to pass on the additional cost to your consumers, reducing the demand for your products. We all know what happens next – you might suffer from lower sales and profitability.
It triggers tougher competition with other retailers, too! Higher price tags make it even more challenging to compete with other brands and offer customers the best value for their money.
So – what can you do to cope with this challenge?
Offering discounts and exclusive offers are a great way to make products more enticing. Offering a budget-friendly option can make you also stand out in a sea of high prices.
If your business can’t afford to slash your price tags, there’s always a more sustainable, creative, and economical approach.
Apart from throwing massive price discounts, you could work on acquiring new customers and building brand loyalty instead.
You could reach a massive audience with high-engagement tools like video and live streaming, opening doors for conversions. You can increase your customer base without compromising prices through increased brand exposure, reach, and user interaction.
What to Expect When Inflation Strikes – And How Live Video Technology Helps
Inflation has many effects on businesses that significantly alter their course of action. Some potential outcomes include:
Higher operating costs
The Challenge: As prices for goods and services rise, businesses may have to pay more for the materials and labor they need. This can eat into their profits and make it more difficult for them to remain competitive.
Reduced purchasing power
The Challenge: When prices rise, businesses may find that some customers cannot afford their products or services. This can lead to lower sales and revenue.
The Challenge: Inflation can make it difficult for businesses to predict what their costs and revenues will be in the future, which can make it harder for them to plan and make decisions.
5 Innovative Ways for Businesses to Combat GST & Inflation Hikes
While the impending rise in GST and inflation rates may be alarming, the good news is it’s not the end of the world!
There are many practical and effective ways to keep your customers coming without increasing marketing and advertising spending too much.
Here are some valuable and proven tricks that will help you manage every GST and inflation impact:
Video marketing is an excellent customer acquisition strategy – from explainer videos and vlogs to customer testimonials and reviews. Plus, it’s cost-effective! Creating a video can be less expensive than other forms of content and can also be repurposed and used in multiple ways.
Using live videos can help to build stronger emotional connections with your audiences, so they are more inclined to buy products/services that resonate with them instead of focusing solely on pricing. In addition, with the technology that is available today, they can also provide you with the insights and analytics you need to measure the success of your brand-building and customer acquisition efforts. This wealth of data helps you plan your course of action and determine what works and doesn’t.
Here’s why businesses should shift their efforts to video marketing:
- Higher user engagement – Videos are more engaging than text or images and can hold viewers’ attention for extended periods.
- Increased conversion rates – HubSpot found that 54% of consumers prefer to see more video content from brands.
- Increased social shares – Videos are more likely to be shared on social media than other types of content, which can help to expand their reach and visibility.
- Increased SEO – Videos can help improve a website’s SEO rankings, as search engines often favor them.
In summary, videos can increase brand awareness, drive traffic to a website, and boost conversions and sales. With higher brand visibility, you can acquire an army of customers and create demand for your products despite the increasing cost of goods and services.
When businesses contend with higher operating expenses due to GST’s impact, staging virtual brand events is a practical way to reach out to potential customers.
Virtual events can be significantly less expensive than traditional in-person events, as there is no need to pay for venues, catering, or travel expenses.
They can also be accessed from anywhere, making it easier for people to attend regardless of location. It’s easier on your end, too, as it eliminates the heavy lifting and financial burdens of staging a live event.
The best part? Virtual events can also be recorded and made available for viewing later, allowing attendees who missed the event to catch up. That’s more potential customers you can acquire without spending more!
And since they are recorded, they can provide detailed analytics, like attendance and engagement metrics. You can use this to measure the event’s success and improve.
Here are some ideas you can try:
- Product launches: Companies can unveil and showcase their new products to customers and media through a virtual event.
- Networking events: Companies can host virtual networking events to connect with other businesses and potential clients.
- Press conferences: Media events can be held online, allowing companies to share important news and announcements with the public.
- Virtual tours: Businesses can offer virtual tours of their facilities, allowing customers to explore their products and services from their homes.
- Webinars: Companies can host webinars to share industry expertise and thought leadership with customers and prospects.
Live commerce is becoming increasingly popular as it allows for a more interactive and engaging shopping experience. Plus, it’s more economical – a great way to stay on top of a hard-hitting financial GST impact.
It’s a form of eCommerce that lets customers shop and purchase products in real time through live-streaming video platforms, such as TikTok, Instagram, and YouTube. Retailers can also host live shopping streams hosted directly on their eCommerce website.
The live streamer, typically an influencer or brand representative, demonstrates and promotes products while interacting with viewers who can ask questions and purchase directly through the platform.
Live commerce allows real-time interaction between the seller and the consumer, leading to higher engagement and interest levels. With the immediate interaction between seller and consumers, running sales mechanics such as live flash sales before the next GST hike can help boost revenue as buyers anticipate prices to go even higher and want to take action sooner rather than later.
It also increases conversion rates as consumers see how the product is used through live demonstrations. This builds the audience’s trust and confidence in the product! That’s instant brand affinity and loyalty right there – minus the costly marketing and advertising campaign efforts!
Influencer marketing enables brands to collaborate with online personalities who have a significant following on social media platforms.
When you work with an influencer, you can reach a larger audience, create brand awareness, and establish credibility through a trusted and respected individual’s endorsement.
Now, you’re probably wondering, aren’t paid partnerships costly? Endorsements can be expensive, especially when working with big names in the industry. This can hurt your pocket, especially when managing a massive inflation impact.
But that shouldn’t stop you. Here’s an idea – consider working with micro-influencers.
Micro-influencers have a smaller following than traditional “influencers” but have a substantial impact and an engaged audience in a specific niche or industry. On Instagram, they boast an average engagement rate of 3.86% (compared to mega-influencers with a 1.21% average).
Many businesses and brands work with micro-influencers as part of their marketing strategy, as they are often less expensive and more targeted than working with more prominent influencers.
Plus, they are considered more authentic and relatable than big-name influencers and can be more effective at reaching and engaging with their niche audience.
No wonder micro-influencers had 91% of the market share in 2021!
Going back to video marketing, using videos for retargeting customers who have previously shown interest in a product is an effective way to bring them back to a website and convert them into paying customers.
It’s also a cost-effective way to reach a targeted audience, as businesses only pay for ads shown to users who have already expressed an interest in their products or services.
By targeting users who have already shown a hint of desire for your products or services, video retargeting can help improve your advertising campaigns’ return on investment.
The various GST and inflation effects on businesses are a huge concern as they can significantly impact a business’s sustainability.
As prices rise, consumers have less disposable income to spend on non-essential goods and services, leading to decreased business sales. Businesses may also experience an increase in operating costs, which can further squeeze their profits.
Thankfully, businesses can combat every adverse GST impact by implementing cost-cutting measures and shifting their business strategies into more practical yet effective efforts.
Taking advantage of intelligent and creative solutions such as video marketing and online advertising can help your business stay afloat during challenging financial times like this.Want to explore how videos can help boost your digital marketing initiatives? Book a live demo with our experts today!