Adapting Retail Strategies Amid Shifting Economic and Political Landscapes

In an era defined by rapid economic fluctuations and geopolitical uncertainty, retailers face increasing pressure to remain agile and resilient. Shifting consumer behaviours, supply chain disruptions, inflationary trends, and evolving regulatory landscapes demand proactive and adaptive strategies.

Rather than hunkering down and hoping to ride out the storm, change is now vital. Adding marketplaces, embedding supply chain resilience and exploring the power of localisation can transform retail business – and that demands an investment in technology and a connected ecosystem designed to transform core operational retail processes.

In an ever-changing global environment, retailers can transform volatility into a competitive advantage if they embrace adaptability, customer-centricity, and digital fluency. As Georgia Leybourne explains, retailers that perceive economic and political shifts as catalysts for innovation and strategic recalibration will be far better positioned to succeed…

Misplaced Focus

Retail businesses have ridden challenge after challenge in recent years. From economic instability to US tariffs, political uncertainty to supply chain disruption, the concept of business as usual (BAU) has become almost meaningless. But how much longer can retailers continue to lurch from crisis to crisis, enduring ever reducing margins while customer expectations have continued to rise?

In their bid to retain customers, retailers have bent over backwards to meet every demand – including immediate delivery and free returns – and, in the process, created an operational model that is incurring untenable cost at every stage. From managing customer expectations when supply chains are disrupted to absorbing escalating delivery costs, it’s easy to see why so many retailers are struggling to attain profit goals.

As a result, retail investment in technology has either been overlooked or, far too often, been misplaced. How many retailers made ill-judged investments in ‘beacon’ technology for example, in a bid to provide in store customers with the same ‘we know you’ offers that dominate online? How often have companies seen skilled staff walk away due to fragmented sales systems—where customers know more about product availability than the employees serving them?  Wasted investment has not only failed to deliver the required benefits but also undermined confidence in the power of technology to deliver essential change.

Prioritising Business Operations

Far too many technology investments over the past decade have been just one more distraction for retailers already overwhelmed by operational challenges. What is required is not another pretty add- on to appeal to already over-indulged customers but technology that supports the efficient, cost-effective delivery of fundamental operational processes.

Retailers can gain enormous benefit from a connected technology platform that allows the business to seamlessly spin up a new marketplace, for example, or scale up others quickly in response to new market opportunities. Even greater benefits can be attained when the same platform also automatically manages the allocation of stock to each channel and allows the retailer to leverage real-time comparison of multiple carriers to offer customers satisfactory delivery options whilst also safeguarding margin.

These are core business areas that have remained untouched for too long, as retailers have feared incurring significant cost and/or disruption. But there is no more time to delay. Trying to manage these operational challenges with the existing systems that are clearly not good enough is a recipe for failure. Where is the supply chain resilience? The ability to scale to meet peak demand without adding huge numbers of staff? The ability to trial new marketplaces and gain access to new customers without an unjustifiable up-front investment?

Derisking Retail

Retailers need to invest in business critical operations to build resilience against constant challenges and embed the agility required to maximise new market opportunities. But they must also do this in a managed way that minimises risk and cost by leveraging modern technologies designed to integrate with existing systems.

A technology solution that offers connectivity to an integrated ecosystem provides retailers with the chance to address multiple pain points. Real-time connectivity to ecosystem partners underpins new resilience models, eradicating the single points of failure that can devastate business. It allows retailers to create back up supply chain models that can be quickly deployed in the event of disruption and provides the flexibility in delivery models required to rapidly respond to changing expectations or costs.

Furthermore, as retailers gain confidence in their use of the modular, connected solution, additional components can be switched on, allowing elements of the legacy solution to be switched off. The entire process can be achieved in an incremental fashion, reflecting both priority pain points and available budget.

Exploring Intelligence

With a flexible, connected model, retailers can quickly explore localisation models. In addition to building on the popularity of certain platforms in each country to get closer to customers, improvements in analytics and AI can refine strategies, for example advising when and where to locate micro-inventory to improve the timeliness and certainty of delivery to enhance the customer experience.

The ability to harness the vast quantities of data generated throughout the retail process also provides significant operational gains. Better insight into cyclical trends in inventory and customer demand can prompt intelligent recommendations about inventory allocation for each channel and the routing models adopted in different geographies.

It can improve demand forecasting and real-time management that allows retailers to quickly respond to changing conditions and consumer behaviour. In addition, AI can support the automated customer communication that is key to maintaining an excellent experience, especially in the event of disruption and delay, freeing up customer service staff to concentrate on the most critical issues that require complex management.

Conclusion

Retail has changed fundamentally yet far too many retailers have been too slow to respond. With profits compromised and customer loyalty waning, it is understandably tough to justify investment in new markets, new processes and new technologies. But unless these changes are made, margins will continue to erode and retailers will be too slow to maximise new opportunities. In the end, many will fall prey to more innovative, flexible and agile competition.

Retailers need to address business critical systems. They need to tap into a connected ecosystem that supports strategic thinking and allows the mitigation of geopolitical risks through new supply chains, a shift to near-shoring or adding micro-inventory locations. They must embed the ability to scale up and down different marketplaces in line with customer trends and shifting demand patterns. And embrace the power of analytics and AI to intelligently streamline and automate processes that support cost effective scale.

Retailers must embrace a future-focused approach that integrates technological innovation, strategic agility, and localised market insights to not only weather constant change but also capitalise on emerging opportunities.