Helen Dickinson discusses the findings of the latest KPMG Business Leaders Agenda survey, focusing on the results from the retail sector.
The structural changes and scale of challenges ahead are highlighted by 90 percent of retailers agreeing that they will have to fundamentally adapt their business models to survive.
Interestingly, our survey reveals that only 39 percent of respondents agree that sustainability will be the key factor in shaping the future.
I expected this to be higher as sustainability will be the key driver of necessary business model changes over the next 20 years, just as technology was over the last two decades. All businesses will be sustainable businesses otherwise they just won’t have survived that long.
But rightly, adapting to changing customer behaviour is the top current priority, as highlighted by 73 percent agreeing that significant investment in CRM is required.
Retailers now need to personalise their offer, but I know of the difficulties gaining insight and customer understanding from the vast amounts of data collated.
A slim majority of respondents believe that future growth in developed markets will not come from increased sales volumes.
This explains the focus on overseas expansion, attracted by two billion new middle class consumers in developing economies, all wanting to consume at the rate we have become accustomed to.
Plenty of senior management time will be spent on coping with challenging low growth home markets; while also considering which markets to enter, the best route in and, most importantly, how customer preferences differ.
Finally, the agreement rate regarding the shift to non-store sales has actually dropped since our previous survey with 57 percent not agreeing that online retail will account for more than half of total retail sales within ten years.
Perhaps because converging technologies enabling customers to regularly cross channels have made it impossible to pinpoint where a sale “belongs” – so, determining online sales percentages will soon be redundant.
More pertinent, and the key differentiator in making the right changes to the business model, will be the understanding of the customer journey to the ultimate purchasing decision and the drivers of future loyalty.
We have heard from nearly 3,000 CEOs and CFOs – across 30 countries worldwide – what their most pressing issues are.
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