The consumer retail sector is enduring challenging times as continued inflation and cost pressures weigh down earnings. In the US, inflation grew to nearly 8.5% in March, a four-decade high and in the UK, annual consumer price growth hit a fresh 30-year high of 7% in March, boosted by higher energy prices. 

Inflation is starting to make an impact on the lower-income consumers’ willingness to spend as they have less disposable income. Due to continued supply chain disruptions, retailers are also facing surging freight and transportation costs. Global unrest such as the Russia-Ukraine war and exit from the Russian market also add to the already rough business landscape. As a result, profits of many key retailers have declined and margins significantly lowered in Q1 2022 compared with the prior year.

There are some winners who managed to generate strong gains in Q1 as they adapted to the new normal. Though there is no simple winning formula for retailers who remained resilient, one consensus from analysts is that there is an urgent need for retailers to overhaul their tech architecture and operating model to keep pace with the changing landscape. 

Can retailers make the right strategic investments in technology to supercharge their performance by building true omnichannel offerings, harnessing data at scale, and implementing agile ways of working throughout their organizations? 

This question can likely help distinguish winners from losers. And winners have to act fast.