a RETAIL industry guide to thinking
forward for the year ahead
Executive Summary
MEDIA, ENTERTAINMENT, AND COMMUNICATIONS
HEALTHCARE
financial services
WHO WE TALKED TO: 103 leaders in retail organizations
Customer experience (CX) is rapidly catalyzing change for financial services in 2020, yet only about one quarter of leaders in the industry feel very prepared to address this top priority. Overcoming barriers to preparedness and operationalizing the experience will require financial services firms to cast aside functional silos and embrace matrixed, horizontal ways of working. In this new organizational paradigm, financial services leaders must move their attention to aligning people, organizational design, and culture to deliver the ideal experience.
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Increasing confidence in operations
Customer experience is retail’s brass ring
Empowering people to address
top priorities with insights
“Excited” (45%), “inspired” (44%), and “energized” (38%) top the list of sentiment in retail for the year ahead, yet an equal number of leaders also feel “resource-strapped” (38%)—up significantly over prior year.
93% of retail leaders say CX is the top strategic priority. 37% of leaders say it has increased in importance over 2019.
Retailers are focused on digital capabilities (85%) and D&A (87%) to achieve customer-centricity through digital experience enablement and insight into customer preferences/purchasing behavior.
Of all priorities, D&A increased the most in overall importance compared to the prior year and presents the highest perceived competitive advantage if addressed (81% say it provides a definite competitive advantage).
Taking Action
How retailers can capitalize
on these market trends
in the year ahead:
1. Enable experience with merchandising.
Apply analytics to merchandising challenges. This can shed a light on customer behavior, highlight opportunities to tailor in-store experiences, inform smarter product placement decisions, and ultimately create a seamless bridge between the in-store and the online experience.
2. Tap into the supply chain.
Harness the supply chain for competitive advantage by focusing on the role it can play in driving CX and operational efficiency. Partner with merchandising to determine the key supply chain differentiators (e.g., automation in distribution centers or accelerated delivery) that will both enhance the experience and drive in-year returns.
3. Build a strong analytical foundation
Double down on master data management (MDM), information management, and data governance to align employees on roles, structures, and processes surrounding the use of data. With strong analytics competencies in place, focus on applying cognitive solutions (e.g., machine learning) to develop predictive models that solve merchandising and supply chain challenges that pose obstacles to operational efficiency and CX.
Functions:
31% IT
26% Marketing
13% Sales
13% Operations
9% HR
5% Finance/Accounting
4% Research & Development
Levels:
39% President/C-suite
30% EVP/SVP/VP
15% Sr. Director
10% Director
7% Sr. Manager
2018 Revenue:
$1B-$5B: 37%
$5B-$10B: 21%
$10B-$20B: 26%
$20B+: 16%
A resource-strapped sentiment is sweeping the retail industry, compounding a heavy focus on operational efficiency alongside customer experience (CX) and data & analytics (D&A) as the top three priorities for 2020. At the intersection of these focus areas, the use of D&A enables retailers to empower employees to address both efficiency and experience challenges. Through insights, industry leaders can tackle merchandising and supply chain obstacles, ultimately harnessing new opportunities for CX and operational efficiency.
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Top priorities for the year
Customer-Centricity/Experience:
93% cite as a strategic priority; 26% feel very prepared to address
1
2
Data & Analytics:
87% cite as a strategic priority; 25% feel very prepared to address
3
Operational Efficiency:
85% cite as a strategic priority; 40% feel very prepared to address
As a likely result of the resource-strapped sentiment,
a high percentage of retail leaders are focused on operating more effectively.
Increasing confidence in operations
Operational efficiency (85% of retail leaders cite a strategic priority)
While operational efficiency continues to be a central priority, retail leaders feel a sense of preparation and feasibility (40% feel very prepared) relative to CX and D&A, the other priorities in the top three.
Organizations have made strides in
the area of operational efficiency:
40% of retail leaders feel very prepared
to address it, up from 20% in last
year's report.
At 55%, CX is also the No. 1 factor catalyzing change in strategic priorities. 56% say it is the top transformation area for 2020.
While confidence in the organization’s preparation to address CX is low (26% feel very prepared), leaders feel that it’s relatively financially feasible (11% feel that it’s very costly) and provides an attractive competitive advantage (63% believe it provides a definite competitive advantage).
Merchandising and category/portfolio management excellence is a priority among 75% of retail leaders and is highest in priority among retailers with annualized revenue between $5 billion and $10 billion (82%).
People/resources is the No. 1 influence on addressing the top strategic priorities.
Digital adoption is the No. 1 internal catalyst for change in retail.
Teams are equally important in enabling the workforce to address strategic priorities through insights. 60% of retailers prioritize cross-functional integration and collaboration within their teams.
This focus will be critical as organizations break down data silos and unlock insights that promote more aligned, operationally efficient
customer-centric decision-making.
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Retailers recognize the key enabling role
of merchandising in driving other top priorities, like CX, through product placement, in-store experience, and pricing.
Retailers may be missing the opportunity to enable employees to address top strategic priorities.
Only 34% of retail leaders cite talent management & development as a very high strategic priority.
Only 5% of retail leaders feel very prepared to address it.
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Supply chain efficiency and flexibility (83% of retail leaders cite a strategic priority)
Operational efficiency (85% of retail leaders cite a strategic priority)
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Despite this importance, only
25 percent feel very prepared to address D&A. Only 15 percent feel very prepared to address digital capabilities.
Retailers may be missing the opportunity to enable employees to address top strategic priorities.
Only 34% of retail leaders cite talent management & development as a very high strategic priority.
READ MORE
Digital adoption is the No. 1 internal catalyst for change in retail.
Retailers can focus on the role of data and digital tools, which can enable employees to more effectively and efficiently address operation and CX challenges.
Only 5% of retail leaders feel very prepared to address it.
Retailers can focus on the role of data and digital tools, which can enable employees to more effectively and efficiently address operation and CX challenges.
Retailers perceive that merchandising can provide a competitive advantage comparable to that of CX (both are perceived to be a definite competitive advantage by 63% of retail leaders).
Retailers perceive that merchandising can provide a competitive advantage comparable to that of CX (both are perceived to be a definite competitive advantage by 63% of retail leaders).
Despite this importance, only 25
percent feel very prepared to address D&A. Only 15 percent feel very prepared to address digital capabilities.
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Supply chain efficiency and flexibility (83% of retail leaders cite a strategic priority)
Store operations effectiveness (81% of retail leaders cite a strategic priority)
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For additional information and to download the 2020 Beacon white paper.
Download the 2020 Beacon White paper
Download the 2020 Beacon White paper
For additional information and to download the 2020 Beacon white paper.
Download the 2020 Beacon White paper
Download the 2020 Beacon White paper
