New business models, disruptive technologies, and agile markets constantly change how people shop and consume in today’s fast and ever-evolving world. Unfortunately, many companies are finding it hard to keep up. Retail and consumer companies need to stay on top of these market changes while also being in touch with environmental, social, and governance practices to remain relevant and competitive in this shifting environment.
Over the last two years, the outlook for the future of retail and consumerism has been rather bleak. Many businesses are finding themselves with empty shelves, unfulfilled retail job vacancies, inflation, and struggling with diverse new ways of communicating.
Economic and Consumer Outlook
The way the economy and consumers feel and act varies across countries, and the impacts of COVID-19 upon their particular industries. According to Deloitte data insights, “In 2022, we expect the economic recovery to continue at a strong pace with gross domestic product rising by 3.5% in 2022. Given this high growth scenario and reduced health concerns, we forecast real personal consumer spending to expand through 2022. We expect services to lead the recovery in 2022, while durable goods should decline, given the strong growth in the category in 2020 to 2021”.
Customer data states that consumers are rethinking their shopping habits and priorities. Over one-third of consumers are spending more on experiences than items one year ago. They are also spending more on credit cards, e-commerce, and “buy now, pay later” options. In addition, e-commerce, digital, contactless services, curbside, delivery, drive-through, and other such methods will most likely continue to be adopted in the long term. Adopting digital methods, including telemedicine, remote working and learning, and entertainment, will continue to be the norm even as restrictions are lifted.
However, executives are still optimistic about the revenue growth and margins in 2022. With inflation at around 58%, business leaders can see this as an opportunity to rethink prices and improve profit margins. Business leaders must rethink the typical old ways of buying, discounts, and promotions to boost profitability. On the other hand, other businesses are working with strategies already in place and working on those unprofitable locations.
Retail and consumer packaged goods companies must completely rethink how and where to serve the intelligent consumer of today and tomorrow by placing data and analytics at the heart of their processes and strategy. This approach helps build a strategic and agile business and can help businesses swiftly respond to market changes while maintaining and cultivating meaningful engagement with their customers. According to McKinsey.com, “retailers will need to systematically assess their capabilities in five critical areas for any retail operation to succeed: revenue management, operating models, digital, capital investments, M&A (mergers and acquisition) and partnerships.”
Standard operating procedures are constantly shifting, such as shifts in spending, loyalty, labor costs, the safety of everyone involved, and more. To transform and keep your business relevant, you will need to take a step back and critically evaluate your products, capabilities, strategies, where your gaps and faults are, revenue management, capital investments, partnerships, and digital capabilities.
In retail, redefining based on the “new normal” means that companies must refine their value strategies. Our Retail Practice focuses on building strong brands that know how to serve today’s consumers. We drive the commercial transformation using a fractional advisory model and tailored services. By leveraging smart data, our Advisors have the capabilities to deeply understand the end users’ most critical pain points and priorities. Then, we transform these new business challenges into actionable solutions to drive growth opportunities and profits.
Our Advisors have the skills, experience, and resources to develop winning strategies and processes to reshape brand portfolios and set up our retail clients for success, enabling them to:
- Expand into new territories & markets.
- Navigate disruption & anticipate risks.
- Seamlessly launch new products.
- Implement & utilize the power of data and analytics.
- Strengthen partnerships with retailers and key stakeholders.
- Maximize operating models.
- Be scalable & sustainable.
Through our international network and industry affiliations, our Advisors at DuartePino can equip our clients with the latest tools and strategies, leading practices, global industry insights, and the most current innovations and solutions to thrive and succeed in your respective market—no matter your company’s location or size. Reach out to learn more about what we can do for you and your retail and consumer business.
*This blog post was written by Hilda Rodriguez, Senior Marketing Advisor and head of the Retail & Consumer Practice at DuartePino. With 20 years of experience in strategy, marketing, and sales, Hilda brings a purposeful and dynamic approach to business development to enhance the customer experience. She has a proven track record of engaging customers and integrating businesses with consumers, distributors, vendors, local communities, and employees and works with our retail and consumer clients to transform their performance, business health, and capabilities.