There can be few better opportunities to gauge the mood and pinpoint the real issues facing retailers than when you bring together 750 senior industry leaders who collectively operate in most countries around the world. That’s the gist of this year’s World Retail Congress. So far, 2023 has proved to be particularly interesting given the tough backdrop for multinational retailers. So, as I recall the many sessions, keynote speakers and above all, the many collegial conversations, here are my top ten takeaways and reflections.
It comes as no surprise that retail is regarded unfavourably by next gens against high-profile sectors such as technology. But it’s a dramatic wake-up call that so few next gens even understand what modern retailing involves and needs in its workforce. Next gens believe that retail is only about selling in store, with little clarity about the career opportunities, including tech.
- Defiant Resolve
Our theme for this year’s Congress was “Retail Leadership for Extraordinary Times,” which describes the multiple challenges retail is facing from the macro-economic to the micro-structural changes across the industry. What was noteworthy at the Congress was neither a mood of optimism nor pessimism, but instead a real sense of determined resolve that retailers know what needs to be done. The pervasive feeling was that retailers understand how they should prepare for the current existential challenges whilst investing for the future. They certainly are not living in the past; defiant, they are pushing forward.
- Light at the End of the Tunnel
We heard from top economists and industry experts that fears of recession in key economies are fading. Inflation is slowing down and in the words of keynote speaker, Professor Scott Galloway, it could “decelerate faster than people think.” Deloitte’s Chief Global Economist, Dr Ira Kalish also said that he doesn’t see the much-predicted move towards de-globalization, but rather that we are witnessing a pivot in globalization as businesses become regionalized by shifting assets to different countries and regions.
- Total Focus on the Consumer
It always seems strange to emphasize the point that retailers need to focus more on their customer, but that remains a reality and we heard this refrain more often than in many previous years. It is more important than ever, by whatever means: retail intuition, a focus on data, a customer-centric strategy. As Marcella Wartenbergh, CEO of European fashion brand house AWWG stated, “Don’t lose sight of your North Star, which is the customer.”
- It’s All About the Product
It’s remarkable how little product is talked about, considering it’s a central retail keystone. That was not the case at WRC, and the conversations were refreshing and enlightening. Now more than ever, great retailers are rediscovering that investing in new, innovative, fast changing product that grabs the attention of customers will win not just sales but also loyalty. Chris de Lapuente, Chairman and CEO of LVMH’s Selective Retail division (which includes Sephora) said that he had never known a time when his group has invested so much in its brands.
- The Age of AI – But Keeping It Human
If last year’s buzzword was “metaverse,” this year’s is firmly established as “AI.” Unlike the metaverse, AI is already delivering benefits for retailers with greater speed, efficiency, and accuracy. The potential for AI to help transform retail is profound and we heard from several speakers that if you’re not actively understanding what it can do for your business, your competitors definitely are. What was interesting, though, was a recurring theme that in using AI or any technology it is critical that you don’t ignore how different customer segments will respond to it. Also, the undercurrent in all the conversations was to ask yourself how you can put humanity into your technology.
- Omnichannel, Now and Tomorrow
There were so many conversations around how customer footfall has returned to stores and that online sales have begun to drop back to pre-Covid levels. But consumers increasingly expect their digital experience with your brand to meet their needs and equally, their tolerance for a poor in-store experience is pretty low.
- People, People, People
It was very powerful to hear so many retailers talk passionately about the need to focus on their people. We’ve experienced the “great resignation” and we’ve seen retailers increasing pay as the price to attract and retain people. Retailers need to bring in new skills and diversity of talents if it is to meet future challenges. Hajir Hajii, the CEO of Europe’s fastest growing non-food value retailer, Action, who started as a shelf-filler at age 17, put it simply, “We have got to treasure people and ask ourselves ‘why would someone work for Action?’”
- All in It Together
Retail has to be one of the most competitive business sectors and the idea of retailers collaborating with a rival or rivals seems unthinkable. But one of the big insights to come out of the Congress is that collaboration to solve the biggest retail issues and challenges is the way forward. Partnerships are key in delivering sustainability targets. We heard from major international retailers such as Mango stating that fashion retailers needed to come together to share ideas, insights, successes, and failures in pursuit of Net Zero goals.
- The Power of Purpose
One of our key themes at the Congress was “purposeful retail,” focusing on how critical it is for retailers and brands to have a core set of values that consumers can understand and support. This was brought to life by many of our speakers including Allbirds, John Lewis Partnership and the Body Shop. We heard from the Body Shop’s recently departed CEO, David Boynton, who described the strong sense of purpose established by its founder Anita Roddick. He added that this North Star helped the brand focus when it had to make tough decisions. He stated Anita Roddick’s much quoted belief that “businesses shape the world” and that the power of the retail industry to change peoples’ lives is incredible.
- Attracting Future Talent
A thought-provoking presentation by the team at communications agency Brunswick got everyone’s attention. They conducted research among Gen Zs in the U.S., Europe, and Asia to understand their views on retail as a possible career. On the one hand it comes as no surprise that retail is regarded unfavourably against high-profile sectors such as technology, but it came as a dramatic wake-up call that so few next gens even understand what modern retailing involves and needs in its workforce. The majority of respondents believe that retail is only about selling in store, with little clarity about the career opportunities, including tech. What was crystal clear was that the lack of communication about retail career paths is a serious issue for the retail industry. Retailers clearly need to do more to promote the very real value of retailing as a career across a vast range of skills.