The New Reality of Retail & Consumer Businesses

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 struggling 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, and struggling with diverse new ways of communicating amid inflation.

Economic and Consumer Outlook

The way the economy and consumers feel and act varies across countries, as well as the impacts of COVID-19 on their respective 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% 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 from 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 pickup, delivery, drive-through, and other similar methods will most likely continue to be adopted in the long term. Adopting digital techniques, including telemedicine, remote work, and learning, as well as entertainment, will continue to be the norm even as restrictions are lifted. 

However, executives remain optimistic about revenue growth and margins in 2022. With inflation at around 58%, business leaders can view this as an opportunity to reassess prices and enhance profit margins. Business leaders must rethink traditional methods of buying, such as 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.

Business Perspective

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, enabling it to swiftly respond to market changes while maintaining and cultivating meaningful customer engagement. 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 acquisitions), and partnerships." 

Standard operating procedures are constantly evolving, reflecting shifts in spending, loyalty, labor costs, safety, and other factors. To transform and keep your business relevant, you will need to take a step back and critically evaluate your products, capabilities, strategies, identifying areas where gaps and faults exist, as well as your revenue management, capital investments, partnerships, and digital capabilities.

Solutions

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:

1. Expand into new territories & markets.

2. Navigate disruption & anticipate risks.

3. Seamlessly launch new products.

4. Implement & utilize the power of data and analytics.

5. Strengthen partnerships with retailers and key stakeholders.

6. Maximize operating models.

7. Be scalable & sustainable.

Through our international network and industry affiliations, our Advisors at DuartePino can equip our clients with the latest tools, strategies, leading practices, global industry insights, and the most current innovations and solutions to thrive and succeed in their respective markets, regardless of their company's location or size. Reach out to learn more about what we can do for you and your retail and consumer business.