Ongoing supply chain issues, the pandemic, and inflation are having a critical impact on businesses' ability to drive profitability.
Retail, manufacturing and consumers goods companies in particular are facing fundamental challenges in managing their profit margins, according to a recent study conducted by Forrester Consulting on behalf of intelligent pricing platform Flintfox.
A majority (90%) of the more than 900 businesses surveyed report that the pandemic is having a critical impact on the ability to manage pricing across their product range, with 39% stating they are unable to keep up with the scale of real-time price fluctuations in the market, the report says.
This is having a significant effect — with businesses losing on average US$1 million a year in lost profitability due to their inability to respond quickly enough to market forces, Flintfox pointed out.
- Report highlights
Existing business models prevent respondents from managing the pace of change, with 41% still relying on manual processes to manage price fluctuations.
- More than half (53%) state that the pandemic has forced them to need better visibility into business performance on profitability and margins to respond accordingly.
- 2022 will see business model transformation pushed up the Board agenda as global change becomes increasingly unpredictable, with 60% of businesses claiming that poor data quality and capture is hampering the ability to keep on top of market fluctuations and remain competitive.
- A shift to real-time, automated management of pricing, will be a fundamental business priority to manage the impact of global disruption in the year ahead, with one in five (23%) businesses implementing intelligent pricing technology in 2022.
- As the long-term effects of the pandemic on the world's economy become increasingly unpredictable, automating decisions around product pricing with intelligent pricing is now seen as one the most important factors impacting business outcomes by more than three quarters (77%) of businesses.