Retail

Retail: how to adapt to the current economic situation?

Published on 22 July 2024

Modified on 3 October 2024

5 min

Having trouble keeping up with market fluctuations, changes in consumer behaviour, and technological advancements? It might be a sign you need to reassess your strategy. Let's explore the various ways you can effectively adapt to these economic challenges, focusing on agility, resource optimisation, and enhancing the customer experience.

Profitability Tested by Economic Uncertainties

In 2024, retailers are facing a complex economic situation marked by significant instability. Economic fluctuations, inflation, and the energy crisis pose major challenges for the sector. In this context, maintaining profitability becomes a delicate exercise requiring well-thought-out strategies and increased adaptability.

Understanding the Current Economic Challenges

Recent reports (BCG Global Survey on Retail Resilience, February 2023, n = 561; BCG analysis) highlight the impact of economic uncertainty on the profitability of retailers. Increases in the costs of raw materials, energy, and wages, along with a decrease in consumer spending, significantly affect profit margins. Furthermore, supply chain instability, caused by factors such as the pandemic, geopolitical conflicts, and logistical disruptions, adds an additional layer of complexity.

Innovative Strategies for Success

With 300 stores worldwide and in 26 countries, Longchamp has chosen Cegid Retail for its unified commerce platform. This gives them real-time visibility on stock, customers

Specific needs have been identified and addressed, such as Click & Collect andpersonalised advice thanks to customer data delivered on the sales assistant’s tablet…

Having the same solution across all our markets – whether in the United States, Asia, or Europe – means that we can have an accurate, 360° view of what is selling and where: this is centralised management. Having the right tools to access the same data means that we are better positioned to observe trends and track customer desires in every part of the world; this enhances our proactivity.

André Louit

Chief Financial Officer of Longchamp

Concern about Rising Costs: How to Manage?

Rising costs are a constant concern for retailers. Whether it’s production, labour, or distribution costs, every aspect of the value chain is affected. Controlling these costs is essential to maintaining competitiveness and long-term viability.

Optimisation of Operations

Optimising operations is a key strategy for managing rising costs in an increasingly competitive business environment. Integrating cloud-based platforms, such as those offered by Cegid Retail, not only centralises and streamlines operations but also improves transparency and real-time decision-making. By automating certain administrative tasks and providing in-depth data analytics, these solutions enhance overall efficiency and significantly reduce costs. Cegid Retail helps more than 1,000 retailers in 75 countries improve their profitability and customer experience through unified cloud-based solutions, offering the essential flexibility and scalability to meet the changing needs of the market. Additionally, the platform fosters collaboration among teams and improves inventory management, contributing to optimal operational performance.

Utilisation of Smart Technologies

Smart technologies, such as artificial intelligence and machine learning, play a crucial role in cost optimisation and improving operational efficiency. They enable the prediction of consumer behaviours with increased accuracy, optimisation of stock levels to avoid overstock and shortages, and automation of repetitive tasks to free up time for higher-value activities. Advanced platforms like those from Cegid provide retailers with the necessary tools to fully exploit data, facilitating informed decision-making and continuous improvement of their operations. By integrating these technologies, businesses can not only reduce costs but also enhance their responsiveness to market trends and customer expectations.

Strengthening Cybersecurity

With the rise in ransomware attacks, cybersecurity has become a major concern for retailers. Cybercriminals are increasingly targeting point-of-sale systems and customer databases, jeopardising sensitive information. Ensuring the security of customer data and operations is essential for maintaining trust and avoiding additional costs associated with data breaches, such as regulatory fines and financial losses due to fraud. Investing in robust cybersecurity measures is therefore indispensable for protecting the company’s assets and reputation. These measures can include:

staff training;
implementation of advanced firewalls;
use of data encryption solutions

Retailers must remain vigilant and proactive to counter these constantly evolving threats and ensure the security of their operations.

In an uncertain economic environment, retailers must demonstrate agility and innovation to adapt to current challenges. Cost optimisation, the adoption of smart technologies, and efficient resource management are key strategies to maintain profitability and competitiveness. This involves not only reducing unnecessary expenses but also investing in technological solutions that enhance operational efficiency. Moreover, proactive stock management and in-depth customer data analysis can offer significant competitive advantages.

Go further, assess your level of digital maturity now with Cegid!