Friday, July 26, 2024

Businesses should look to technology to build resilience

Flintfox, the intelligent pricing specialists, and ToolsGroup, a global leader in retail and supply chain planning and optimisation software, are sharing insights presented at an exclusive event on Profitability, Pricing and Supply Chain into what to expect from the Australian economy in 2023, including the projection that household spending growth will continue to slow.

At an event hosted for Australian retailers, manufacturers and wholesalers, business leaders were given insights to help them prepare for 2023 and guide them on how technology in pricing and supply chain management can help build resilience.

According to ANZ Research forecasts presented by ANZ Senior Economist Adelaide Timbrell, spending per person will decline in the second half of 2023, and retail sales growth will slow as household discretionary incomes are redirected by interest payments and inflation. Ms Trimbrell said, “It’s going to take us a few years to get back to the level of buying power we had in 2021.”

However due to the labour shortage, unemployment will remain low and wages will continue to increase, albeit not in line with inflation through 2023, she said.

Ms Adelaide explained that some of the anticipated negative impact on the retail sector is a result of increased spending on travel. Services spending such as dining is expected to remain stable and certain FMCG sectors should perform well, in line with the lipstick effect where consumers chose to spend on little luxuries.

Flintfox Chief Marketing Officer Cath Brands said, “There’s no denying we’re living in a complex economic time as businesses navigate high inflation rates and a slowdown in consumer spending. Australian manufacturers and retailers have had a really strong few years despite the challenges thrown at them but with spending set to slow, they need to make sure they have the pricing agility needed to keep hold of margins through both cost and demand volatility.”

ToolsGroup Global Partner Sales Director Michael Haiber said, “Supply chains are both immensely important and highly volatile. As disruptions and uncertainty continue to give rise to new planning challenges, companies must make intelligent business decisions quickly and with precision. This is why AI-powered digital solutions that enable organisations to better understand consumer behaviour and pivot easily and rapidly are critical for minimising inventory investment, while satisfying demand and maintaining healthy profit margins.”

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