By Tony Gregg, chief executive, Anthony Gregg Partnership
The past few years have forced retail businesses to embrace change and these challenges are expected to continue going into 2023, with the cost of living crisis and predicted recession looming large. The retail landscape is very different as the way we shop and work has been transformed. This is why it’s more important than ever for leaders to step up and innovate to stay ahead of the curve. There is still a great deal of opportunity ahead: it’s about knowing how to take advantage of the latest industry trends.
Challenges retail leaders have faced in the past year
Retail leaders have had to quickly adapt to a variety of changes over the past 12 months. The ‘Great Resignation’ saw the departure of skilled workers, making it more challenging to recruit board-level and c-suite retail executives, on top of general staffing issues in stores. It’s also been a challenge to rebalance physical retail as footfall has dropped with more people working from home, significant supply chain disruption and online preferences during major shopping events such as Black Friday and Christmas.
What retail leaders can expect in 2023
Whilst there’s likely to be more of the same challenges we’ve seen this year, 2023 will bring a new set of trends that retail leaders can prepare for and benefit from:
- Accelerated digital transformation — with online retail moving faster than ever, technological innovations are leading the way. Consumer expectations are shifting towards a faster, seamless and smart service. There’ll be no excuse for lacking an understanding of AI and helpful technologies that can improve customer service.
- Inflation and supply chain issues — the war in Ukraine has led to ongoing supply chain and logistics issues. We’re also experiencing economic crises both in the UK and globally. Combined, these are creating significant headwinds for retailers. Retail leaders need to improve their resilience and reduce exposure to volatile markets.
- Sustainability is being prioritised — conscious consumers are demanding that retailers use recyclable and sustainable packaging for their products with both digital and physical purchases. Businesses are expected to have accountability for their impact on the environment.
- Immersive customer experience — customers expect a memorable experience when they shop. From efficient processes to self-checkouts and a community feel, the customer experience needs to be prioritised by retail leaders. The emphasis on experience is so great that large brands are now hiring chief experience officers (CXOs) as part of their business strategy.
How can retail leaders prepare themselves for the year to come?
Rather than adapting as and when challenges arise, it’s important to prepare in advance for the upcoming changes. Leaders need to stay on top of retail trends and incorporate them into their business model, innovating and attracting more business.
Be an agile but cautious leader
In the face of evolving challenges, as a leader, you need to be an agile decision-maker who knows what’s best for the business. This comes with experience and an understanding of the retail industry, along with the ever-changing trends.
Whilst flexibility is key, it’s also important to remain cautious. Rash decisions can spell disaster for fast-moving industries. Listening to your staff is vital in order to make the right decisions. Flexibility is a non-negotiable in the retail space and it’s more important than ever in times of uncertainty.
Bring in new blood
Recruitment strategies have become far more flexible. Companies are now much more open to recruiting staff without specific retail experience as long as values align. This proves fruitful as fresh perspectives bring new ideas and a refreshing take on the industry from someone on the outside. Recruiting new employees will maintain a refreshed and energised team: the 80/20 rule (80% internal promotions and 20% external hires), is a good rule of thumb.
With the ‘Great Resignation’ seeing huge movements of talented workers, it’s vital for leaders to attract new people to retail whilst helping existing employees adapt to new trends and stay fulfilled in their roles.
Be a visible and authentic leader
Being an open and communicative leader is paramount to motivating employees and ensuring an aligned company vision. Leaders should take the time to carry out store visits and gain valuable insight from the in-store staff. Bridging the gap between head office and stores will position you as an empathetic leader who values their staff and can inspire a team to ride the waves of change. A visible and present CEO who steps out of the office and engages with the customers helps the team to feel connected, included and trusted. Recognising the importance of their work will inspire teams during both the good and bad times.
Become a digital transformer
It’s clear that e-commerce is here to stay. Retail leaders need to understand and utilise digital tools to their advantage. Whilst the technology itself isn’t difficult to adopt, the key is for leaders to change their mindset towards a digital retail experience.
Customers want retailers to utilise digital tools that improve their experience and make shopping more efficient. Whether it’s connecting with in-store employees via video for styling advice or using augmented reality that allows customers to visualise products in their own homes. Anything that makes the customer’s life easier needs to be considered, such as self-checkouts or virtual chatbots that offer 24/7 customer service. Whoever embraces the new reality and delivers the best digital experience will be the future retail leaders.
Introduce a COO
Even the best leaders can’t lead on their own. Support is needed to successfully innovate and embrace retail trends. We’re seeing more companies incorporating COOs (chief operations officers) in their business structure. Being the closest individuals to the CEO, COOs are able to implement and oversee the day-to-day operations, processes and strategies. Having a second-in-command extends your reach across the business, making you a much better leader.
For retail leaders, 2023 will be undeniably challenging, but the new trends offer a great opportunity. The emerging changes offer a catalyst for innovation, a focus on values and an opportunity to become a more empathetic, visible leader. Retail CEOs who can reinvent themselves whilst remaining true to core company values will come out strongest, leading their organisations into a much brighter future.