LISTEN NOW: Looking back at legislative change and facing forward into the digital universe
11th January 2019 3 minutes read
While Morrison’s seasonal food sales were up on last year, online retailers such as Boohoo and ASOS experienced greater rates of sales growth than traditional retailers this Christmas shopping season. Meanwhile footfall was down by a significant margin at high street stores and out of town retail parks in particular.
The convenience of online shopping has been noted for many years now but this is only one element of the DNA of a successful retailer. Just as important to consumers are elements such as the personalisation of loyalty offers, reliability of delivery and returns, the choice on offer and the overall shopping experience.
So, what are the five big trends we will see in 2017 in terms of retail brand leadership and what do we predict we will be writing about UK brands in January 2018?
1. Retail brands will need to cast the net wider
In our 2016 research1 with retail CEOs from the UK and around the world, we found that:
Life continues to move on in the retail sector and in 2017 retailers need stop replacing like with like when recruiting senior board members. The importance of customer data analytics and digital processes means technological insight is more important than ever and the senior leadership team must reflect that. The appointment of Sergio Bucher, the former Amazon vice-president, as Debenhams’ new boss in May 2016 is a prime example of what lies ahead.
2. Onboarding new senior staff will become more important
Considering the right candidate for a senior leadership role is a detailed and well thought out process, therefore, new appointments rarely fail in their post because they are unsuitable for the job. Where they can and often do fail is when they are thrown in at the deep end without a tailored onboarding programme. New senior leaders want to make a difference and an impact quickly, but run the risk of making mistakes by failing to understand who they need to get buy-in from, what the boundaries of their role are and what their priorities should be. Knowing this is the case and having the resources and time to smoothly embed senior executives successfully into the organisation are two different things, so retailers will increasingly be looking for partners who can help maximise efficiency through tailored integration strategies.
3. Boards will become more diverse
Expecting a board made up of people from the same background, age and ethnicity to understand the changing requirements of shoppers, particularly generation Y and Z, is simply reckless. Predicting the future of technology is not easy. If you look back 10 years and track the changes in payments, fulfilment, supply chain management and omnichannel retail and then consider that technology speed and performance doubles every year – you will quickly conclude that artificial intelligence, data analytics and robotics will play an increasingly prominent role in retail. Boards need to ask themselves if they have the know-how they need to anticipate change and, not only compete in the race for transformation, but to come out as a winner. For all retailers, the starting line will be to change the conversation at the top.
4. Customer centricity will become a reality
Retailers have always existed to exploit the sometimes unknown and unanticipated need of customers to acquire a product or service. With the launch of Prime and the development of incredibly clever algorithms, Amazon and other online retailers have taken this concept to an entirely new level. A product you may have looked at online will continue to be served up to you in subsequent days in a series of attractive offers, along with other related items. When the price falls by an acceptable margin, a tipping point is reached that is impossible to resist. With same day, reliable delivery customers are almost at the stage where they can simply ‘wish’ for a particular product and it appears (successful payment depending, of course).
5. Collaboration will be king
The days when different members of the leadership team within large retailers could pursue their own agendas in isolation of their colleagues are well and truly over. To really gain a market leading position, leadership teams need to pull together rather than simply achieve their own KPIs. Of course this relies on a much more collaborative ethos at board level than the traditional adversarial culture enjoyed by senior management teams within the retail sector. Finding candidates with collaboration skills for retail’s top roles will be a trend we predict for this year and beyond.
When it comes to looking forward to January 2018, all of the indicators show that themes for discussion will follow a similar trend. More than ever before, retail leaders will need to balance their ability to deliver returns to investors against the medium to long term goals of building a customer-centric, omnichannel brand that has a clearly articulated proposition for customers and partners.