Omnichannel
Examining factors spurring the 'great retail reset'
Retailers, in the wake of COVID-19, are wrestling with big issues as a retail reset is on the brink. A Deloitte report provides insight on what retailers should be doing to meet consumer expectations.
March 4, 2022 by Judy Mottl — Editor, RetailCustomerExperience.com & DigitalSignageToday.com
While the COVID-19 challenge may be ebbing in the retail industry, retailers are still grappling with a slew of hurdles, from trying to keep store shelves stacked with product to hiring instability and the rising inflation in the U.S.
The culmination will lead to a "great retail reset," according to a Deloitte report, "2022 Retail Industry Outlook."
The report polled senior retail executives from companies with at least $1 billion in annual revenue and revealed that after the "great resignation," 83% of retailers will be investing most heavily in recruiting and retaining employees. The report also stated automation, transparency and new partnerships will be key priorities for retailers given the shifting supply chain.
Another major finding is that the fusion of digital and physical experiences is on the brink of acceleration, with 70% of retailers planning for moderate to major investments in digital marketing and 67% citing e-commerce and online shopping as top investment areas.
Retail Customer Experience reached out to Rod Sides, vice chairman and U.S. retail leader at Deloitte LLP, in an email interview to get deeper insight on the report findings. Sides leads the U.S. retail and distribution practice and is responsible for driving key sector initiatives that include original research, talent development and strategies. A principal in Deloitte Consulting LLP, Sides has more than 25 years of experience in store operations, supply chain, procurement, back-office operations and IT.
Q. The pandemic years have clearly changed retail and the customer experience. The report cites the industry is undergoing a "great retail reset." Can you define what that means and how retailers are going to have to adjust in relation to providing the best customer experience?
A. The pandemic has created several headwinds for the industry, forcing retailers to reexamine the systems and strategies that have shaped the industry for years. In many ways, the challenges brought on by the pandemic have opened the door for a long-overdue great retail reset which can help move many retailers into more stable — and potentially more profitable — positions than ever before. Daily life has evolved for many consumers and nearly all executives in our survey (96%) said consumers now expect seamless experiences across channels. Technology and digital platform investments will be critical for addressing the flexibility and conveniences consumers are looking for.
Q. Given the "great resignation" in regard to the continued loss of retail employees, why is technology and automation now critical within the work of hiring and retaining employees and can you give some examples of how one or both can play a valuable role in retailers developing and retaining a strong workforce?
A. Currently, the biggest pain point for retailers is at the store level, and 74% of retail executives in our survey expect shortages in customer-facing positions in 2022. Given the pervasiveness of the situation, retailers have little choice but to address the problem or adapt the business model. Using automation and technology can help alleviate labor shortages and create efficiencies that free up the workforce to engage with customers. It is also important for retailers to understand that priorities have shifted for employees and should consider ways to infuse culture, flexibility and purpose to hire and retain employees.
Q. The report speaks to how physical and digital retail are now intertwined and accelerating. Is this due to consumer demand for digital interaction or a combination of consumer wants, the pandemic impact and the increased e-commerce consumer activity? And where should retailers focus — digital marketing or the online shopping channel? Is one more important than the other?
A. A key takeaway from the pandemic has been that consumers have reset their level of reliance on technology and digital platforms. Virtual work, school and entertainment has filled households with more gadgets and accessories, leading to increased digital interaction. Given these trends, it makes sense that 70% of executives are planning for moderate to major investments in digital marketing as they look to gain market share. Additionally, two-thirds are making investments in e-commerce and online shopping platforms, since many organizations are still dealing with old and outdated platforms and need new, next generation e-commerce platforms to support shifting customer expectations.
About Judy Mottl
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