Moving Ahead During the 'Great Retail Reset'
Consulting firm Deloitte is out with its retail industry outlook for this year and while predictions are particularly hard to come by in the ever-uncertain ‘20s, the company identified key points of what it dubs the “Great Retail Reset."
In its analysis of the current retail climate, Deloitte surveyed 50 senior retail executives across several sectors, including those in the U.S. grocery industry, to get their take on how this year will unfold. Through these interviews and the firm's own assessments, Deloitte's experts highlighted three areas of importance – and potential.
First, the "Great Resignation" that made headlines in 2021 will continue to impact retailers. Deloitte reports that 83% of retailers are investing the most heavily in employee recruitment and retention, and 74% of executives expect shortages in consumer-facing positions this year. More than half of leaders believe that staff-free stores will be common with in the next five years.
While the dearth of workers has been concerning, it presents retailers with a chance to rethink their approach to labor at all levels, from the store to the warehouse to IT and technology teams. “Given the pervasiveness of the situation, retailers have little choice but to address the problem or adapt the business model," the report’s authors said.
Another main area of change and opportunity is in the highly-publicized supply chain. As the report summed up, “Resets don’t happen overnight. But retailers can’t afford to wait given that 80% of executives we surveyed believe consumers will prioritize stock availability over retailer loyalty in the upcoming year.”
To meet shopper needs, Deloitte’s analysts recommend that retailers use sound information and technology updates to develop more agile supply chain capabilities. Transparency in the supply chain is critical as retailers – and grocers in particular – should be more transparent with their suppliers to best determine what they expect to order and sell.
The third area of note in the consulting firm’s retail outlook for 2022 is the equally pervasive topic of the evolving digital environment. Coming out of the pandemic, retail executives surveyed by Deloitte said that they understand the opportunities for digitization through solutions like cashier-less stores and e-commerce that take them beyond legacy technologies that no longer support consumer and business needs.
Most retailers are already spending more in that space. Seventy percent of retail executives queried by Deloitte say they plan to make moderate to major investments in digital marketing to complement marketing efforts at brick-and-mortar locations. “This indicates that retailers are looking to gain market share by finding new customers but also trying to figure out how to turn more in-store shoppers into online shoppers. Clearly, shoppers are more profitable when they’re spending on both channels,” the report concludes.
