Retailers around the world say they are now focused on laying the foundation for future success. The key is to prioritize actions and investments. They identify five key areas:

  • Overcoming inflationary pressures and reducing costs. In particular, reducing costs through the introduction of new technologies, including artificial intelligence, even if this comes with a longer payback period.
  • Increasing supply chain resilience. Less than half of retailers can boast of effectively overcoming logistics disruptions. To this end, one in four is seeking to acquire logistics assets.
  • Becoming more environmentally sustainable. In response to consumer interest and regulatory changes, ESG issues are being prioritized – a set of standards that socially responsible investors use to screen potential investments.
  • Increasing market share. There is a relentless desire to drive business development by increasing market share in different regions.
  • Maintaining or increasing operating margins. Changing market conditions and ongoing inflationary pressures provide additional incentive to reinvest in their businesses.

Managing inflationary pressures and reducing costs is a top priority. Despite signs that inflation is receding, the Global Well-being Index shows a loss of financial strength among shoppers. It is possible that a large portion of consumers have reached their limits due to rising prices and stretched budgets. Many have switched to cheaper brands or private label products in response to changing living costs. At the same time, the global economy, which in recent years has focused more on trade in goods and consumption due to pandemic restrictions, is returning to the consumption of services.

Therefore, retailers should assess the potential long-term impact of high prices, as lower prices will be a stronger purchasing driver than brand loyalty or its sustainability.

Source: https://rau.ua/