Study: Retailers aware of disruption, but fall short in taking action
Retail executives know their industry is going through fundamental and massive change, but that doesn’t mean they are taking action to deal with it.
Ninety-eight percent (98%) of retail executives recognize that changing customer behaviors and other transforming forces are disrupting their industry, but only a minority are taking action to address the changes, according to a new global study, “The DNA of the Retailers of Tomorrow,” commissioned by Green Park and the World Retail Congress with Planet Retail RNG, TrueStart and EY.
The report reveals that only 31% of retail leaders are repositioning their long-term business model, with 40% simply optimizing the performance of their current operations. And 24% of retail companies are primarily focused on turning round short term issues rather than long term planning.
The report also finds that transformation progress is currently extremely limited: While 80% of retail executives say their companies understands the need for transformation, the awareness falters before it turns into action.
Although plans are in place for 61% of global retailers to transform their businesses, less than half (44%) have identified the capabilities needed to transform, and only 24% say they know what transformation looks like on a day to day basis.
The report’s initial findings identify an “action gap” between awareness of the need to change and the implementation of new operational processes. When asked how mature their organization’s transformation currently is, 62% of retail executives say they have not even started or are at the beginning of the process. Just 7% has completed their transformation.
“The ‘action gap’ is dangerous because the drivers creating the need to transform will only accelerate,” said Steve Baggi, co-founder and head of retail & consumer at executive search firm Green Park. “Having a strategy is an excellent first step, but having the confidence to deliver on it is vital. Retailers need to be brave and invest in new models underpinned by technology that deliver the goods, services and experiences that customers’ want. If they fail to change, change will be imposed upon them.”
The 11th annual World Retail Congress kicks off April 4, in Dubai. With a theme of “Reimagining the Customer Experience,” the conference will address changing consumer trends and highlight innovative solutions. The lineup of speakers include executives from such U.S. brands as Macy’s and Walmart Stores.
“We know that the number one issue facing retailers around the world is the need to transform their businesses to be able to serve today’s consumers,” said Ian McGarrigle, chairman at World Retail Congress. “But it is easier to say than it is to implement which is why we felt this research would help in highlighting exactly what areas of transformation retailers needed to focus on. From this first report it is clear that the industry is only just starting out on this journey but that the majority of retailers need to move faster if they are to stay ahead of their competition or, in some cases, survive.”
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