A study by professional services firm Genpact and analyst organisation HFS Research finds that inflation, cybersecurity and supply chain disruption are the top three current concerns for retail executives.
The report includes responses from more than 600 global retail and CPG executives and also provides a playbook based upon HFS’ Horizons innovation framework.
Horizon 1 is digital modernisation, Horizon 2 is unmatched consumer experience and Horizon 3 is driving value through new business models.
Companies that invest across all three Horizons of innovation are best positioned to lead in the future. However, the study shows that only 6% of retail executives say their companies are investing across the three Horizons and are focused on the right initiatives to lead in the future.
The research also underscores the need for retail companies to change processes and operations to meet ever-evolving consumer needs.
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Most survey respondents cite that their companies’ internal operations can’t keep pace with demand and supply challenges. Only 22% feel they have successfully modernised their order management operations.
What other changes are retail executives concerned about?
- Supply chain disruption changing business models – The pandemic shock on supply chains is something that 70% of retail and CPG executives still grapple with. Of the CPG executives surveyed, 75% say their companies are responding by transitioning from traditional linear to autonomous supply networks.
- Customer evolving buying patterns also driving new channels – Another pandemic trend with a dramatic impact on change is the rapid rise of direct-to-consumer (DTC) sales. More than 70% of consumer-packaged goods executives state that their companies are investing in DTC models for growth.
- Sustainability is mission critical, but improvement is needed – Only 60% of retail and CPG executives say their companies have appointed a chief sustainability officer, developed frameworks for front-line employees to be more aware of their impact on the planet/sustainability and are engaged a third-party services provider to help achieve sustainability goals.
HFS Research president of research and advisory services Saurabh Gupta comments: “Retail companies struggle to balance the macroeconomic ‘slowdown’ with the ‘big hurry’ to innovate. Most are not investing across all the areas they need to meet.
“Beyond survival, they must take a balanced approach to their people, processes, sustainability initiatives and technology to thrive.”