Insyte Weekly: Global Food Inflation, NVIDIA's Latest Update, Retailtech Challenges and More

This was an interesting week in the business world. Here’s a breakdown of some of the week’s top stories.

Media & Entertainment

As reported by Hassan Mujtaba, NVIDIA announced Project G-Assist. NVIDIA's Project G-Assist leverages generative AI to provide real-time, contextually aware game assistance to PC gamers. By processing voice or text inputs and analyzing game screen data using AI vision models, it enhances a large language model connected to a comprehensive game knowledge database. This AI assistant delivers tailored responses to help players navigate complex RPGs, RTS, and SIM games, reducing the need to search through wikis and forums. Additionally, Project G-Assist optimizes gaming systems by adjusting settings based on user-specific hardware configurations, enhancing performance, and reducing power consumption, ensuring a seamless gaming experience.

Spotify is increasing the prices of its Premium, Duo, and Family plans in the US, with Premium now costing $11.99 a month, up from $10.99 announced last year according to Tom Warren. Spotify Duo will be $16.99, up $2 from $14.99, while Family will increase to $19.99 from $16.99 a month. This marks a 30% increase for Duo and a 25% increase for Family over a year, with Premium seeing a 20% hike. The company attributes these changes to the need for continued investment and innovation in product features.

Tourism

Chinese tourists are significantly increasing their travel spending both domestically and internationally, with expenditures expected to surpass pre-pandemic levels after the sluggish pandemic years as cited by Bloomberg. According to the World Travel and Tourism Council, Chinese tourists will spend approximately 1.8 trillion yuan ($250 billion) on international travel this year, a 10% increase from 2019. Domestically, spending is predicted to hit a record 6.79 trillion yuan, surpassing pre-pandemic levels. This resurgence in travel and spending highlights the resilience and recovery of the tourism sector. Despite visa processing delays and higher international flight costs, many Chinese tourists are opting for domestic travel, contributing to the economic boost within China. Travel remains a strong category of consumption in China, supporting millions of jobs and driving economic recovery, despite the overall sluggishness in the economy and retail spending.

As reported by TTW, the United States has introduced a new visa-free initiative aimed at boosting tourism by allowing citizens from select countries to visit for up to 90 days without a visa. This policy is expected to enhance the travel experience by streamlining the entry process and reducing wait times, thereby making the US a more attractive destination for international tourists. The initiative is anticipated to significantly increase tourist numbers and drive economic benefits, aiding the US tourism industry’s recovery from the COVID-19 pandemic.

Retail

A global survey by Mississauga-based company SOTI reveals that retailers are falling short of shopper expectations in integrating technology into the shopping experience as cited by Tyler Flemming. The survey of 1,000 Canadian consumers highlights a demand for better in-store interactions, personalized recommendations, and real-time inventory access to foster loyalty. Issues include a lack of staff assistance with self-service machines and the need for better supply chain optimization, as 46% of consumers expect same-day pickup and 41% seek alternatives if delivery exceeds two days. Shoppers also desire real-time order updates, with 77% emphasizing its importance. Security concerns persist, with many worried about data collection and financial fraud. SOTI's Shash Anand and technology analyst Carmi Levi stress the need for retailers to invest in AI-driven solutions, device management, and security to enhance the shopping experience and build customer trust.

Peyton Begora reported that Dollar General is scaling back on self-checkout across its stores to address the issue of shrink. During the first quarter, the company converted thousands of stores from self-checkout, a continuation of an initiative announced in March. CEO Todd Vasos stated that the retailer has limited or removed self-checkout in 12,000 locations, now offering it only in select high-volume, low-shrink stores. Previously, over 14,000 stores featured self-checkout. This move aims to enhance customer engagement and reduce shrink, with significant improvements expected by 2025. Dollar General’s three-part plan involves converting self-checkout registers to assisted checkout in 9,000 stores, limiting self-checkout transactions to five items or less, and removing self-checkout from over 300 high-shrink stores by mid-2024. This strategy marks a shift from the company’s previous push for self-checkout-only stores, driven by shrink being a major challenge. Additionally, the retailer is scrutinizing its supply chain and removing high-shrink items to combat the problem.

Feyishola Jaiyesimi shared insights from a recent World Bank Report and highlighted the impact food inflation has on developing economies. In May, food inflation remained high globally, with nominal and real inflation increasing in 59% of low-middle-income countries, according to the World Bank's May 2024 food security update. Nigeria, classified as a low-middle-income country, ranked eighth in both nominal and real food inflation. Real food inflation in Nigeria rose by 41% compared to the previous year, while nominal food inflation increased by 7%. The report highlighted that food price inflation exceeded overall inflation in 53% of the 166 countries reviewed by the World Bank. Maize and wheat prices increased by 4% and 21%, respectively, on a month-on-month basis, while rice prices declined by 1%. The World Bank projects a global decline in food prices of 6% in 2024 and 4% in 2025, primarily due to increased global supply, although potential disruptions in grain shipments and input cost shifts pose risks to these forecasts.

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