Leveraging technology in the fight against inflation
The unexpected and rapid onset of inflation has sharply raised business expenses along with a spike in daily expenses. Companies in all sectors of the economy are dealing with rising expenses for labour, materials, and services. In order to fight this change, businesses are investing more money into improving productivity as well as minimising costs and reinforcing their profit margins.
Technologies combating inflation today
While technology has significantly impacted cost reduction for many years, this benefit has been eclipsed by a protracted period of deflation. But the supply chain constraints brought on by COVID-19, combined with the escalating geopolitical tensions, have upended that narrative. Businesses are now responding to these changing circumstances by investing in business transformation services that drive productivity, reduce expenses, and boost profitability.
In the fight against inflation, key technologies such as artificial intelligence (AI), the internet of things (IoT), and robotic process automation stand out. These technologies are permeating most sectors and are causing long-term transformations.
- AI: Thanks to more affordable and powerful processing capabilities, AI models are advancing faster than conventional models. This growth is presenting businesses with a lucrative opportunity to reduce costs and simplify inventory management. With the aid of AI and real-time data, retailers can keep track of their stocks and inventory. This information helps them in maintaining a balanced inventory and monitor shopping patterns across several stores. Retailers can then modify their inventory to effectively meet customer demand, prevent unnecessary orders, and maintain a supply of goods.
- IOT: In search of innovative ways to draw customers, several businesses have adopted IoT. This technology personalises smartphone apps, drive marketing initiatives, and helps in online purchasing. Retailers also employ AI along with IoT to deliver personalised products and services to customers while using predictive analytics to forecast their buying patterns. IoT technologies help retailers decide when to raise or lower prices in response to trends in consumer demand across various goods, categories, or regions. This facilitates quicker cost reductions and helps businesses adjust to shifting customer patterns.
- Robotics and automation: Automation and robotics help businesses cut expenses in several areas. The possibilities for automated tasks are proliferating more than ever. These technologies continue to be the go-to for many companies — from grocery stores to production and warehouse storage — to reduce labour costs. Food processing, general manufacturing, and electronics production are just a few of the industries adopting automation in increasing numbers.
Inflation is generating substantial investments in products and services that can counteract the consequences of inflation. This could be an investment opportunity for companies that provide productivity-enhancing technologies, notably in automation and digitisation.
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