Australian retail technology company StyleMatrix has urged retailers to curb their reliance on constant discounting as economic pressures intensify. The company has highlighted concerns that an "always on sale" approach is eroding profit margins and undermining the long-term stability of retail operations.
Profit margin pressure
Ongoing cost increases and softer consumer spending are driving many retailers to run more frequent promotions. StyleMatrix Founder Craig Cookesley said this short-term strategy often conceals fundamental problems related to stock visibility and accuracy.
"Retailers are discounting because they cannot see what is happening inside their inventory. When you can't identify where the real gaps are, discounting becomes a default response. This cycle puts enormous pressure on profitability. Smart point-of-sale systems and accurate stock intelligence are what break that cycle," said Craig Cookesley, Founder, StyleMatrix.
Stock data challenges
Internal analysis by StyleMatrix indicates that many fashion and footwear retailers continue to operate with imprecise stock information. The company claims that inaccurate data on product sizes and colours leads to poor purchasing decisions and unnecessary markdowns. These issues, it says, also impact marketing campaigns and overall demand planning.
Cookesley urged retailers to abandon outdated approaches to inventory visibility.
"Inventory visibility has moved from a nice-to-have to a commercial necessity. When retailers understand stock by size and colour in real time, they can promote only what is relevant. Marketing spends become more efficient, and customers receive products that suit their preferences. That is where margin improvement starts," said Cookesley.
AI system adoption
StyleMatrix expects to see more retailers in 2026 transition from broad discounting to targeted, inventory-led campaigns. According to the company, there is rising demand for AI-powered stocktaking and smarter point-of-sale solutions, with a focus on providing deeper insight into stock levels and customer needs.
Cookesley pointed to changing consumer expectations as a further driver of this shift.
"Consumers want the right product, in the right size, without having to dig through endless sale racks. Retailers gain an advantage when they can tailor campaigns to actual availability and real customer demand. AI is delivering that capability, and it is changing how retailers approach profitability," said Cookesley.
Operational benefits
The StyleMatrix platform integrates with established point-of-sale systems. The service is designed to analyse stock accuracy across stores, eCommerce sites and distribution centres in real time. The company says this visibility helps retailers detect gaps in size ranges, identify overstocked lines and minimise instances of slow-moving inventory. By automating stocktaking, it also aims to reduce manual errors and reliance on unsustainable discounting strategies.
Early uptake of the technology has reportedly been strongest among fashion, footwear and lifestyle retailers. These sectors are said to be seeking greater clarity and risk reduction to support more sustainable growth amid margin pressures.
Industry outlook
StyleMatrix plans to continue investment in AI technologies aimed at improving real-time inventory transparency for retailers. With margins under pressure from higher rents, staff costs and general expenses, the company sees smarter stock intelligence as key to future competitiveness.
"The retailers who succeed in 2026 will be those who know their stock better than their competitors. When teams have full visibility, they can plan smarter, buy better and market with precision giving customers truly personalised marketing campaigns. Discounting then becomes a tactic, not a safety net which is essential for retailers who are being affected by higher rents, wages and overall operating costs," said Cookesley.