Retail and Consumer Goods sectors have changed significantly; buckle up, it’s only getting faster!
In a recent article for Essential Retail, LEF researcher and advisor Spencer Izard stated that for decades a retailer’s business was centered around the products they sold. But the onset of digital has driven the need for retailers to reassess what their central focus must be, moving from products to the customer.
Izard argued that the change has created a delta between a retailer’s leadership team placing customer in the center and the day-to-day operational reality of it. It is one thing to place the customer at the heart of your business, but to do it successfully requires an assessment of pan-organizational operating behavior and practices to occur. Many retailers have focused on using technology to address customer centricity as a silver bullet, rather than looking at the whole operation.
Since the advent of the digital era, the retail and consumer goods sectors have experienced significant disruption. Digital natives like Amazon and Alibaba have enjoyed a meteoric rise whilst “traditional” businesses have struggled with inertia and their inability to sense and react to a changing world. Many have hoped that past success will be a predictor of their ability to successfully navigate a world that is now radically different. The list of retailers and consumer brands in the latter category is too numerous to mention but includes brands that once had a high emotional engagement with consumers, and now find themselves increasingly disconnected from both loyal and prospective customers.
LEF’s mantra is to help organizations challenge convention and embrace the mindset required to embrace disruption and transform business models. Recently we’ve been exploring challenges that we hear are critical to Retail and CPG CXO’s, and to probe more deeply how these organisations can avoid the risks of becoming marginalised in an ever-increasingly fight for better customer experiences and against very tech-savvy organisations.
This is the first in a series of articles for Retail and CPG, and in the coming weeks we’ll address:
- Changing behaviours of customers; how insights from data can improve your understanding?
- Technology is enabling new business models; what does this mean for you and your business?
- People skills need to thrive in this changing world; how can you deliver new propositions and rapidly adapt customer relations?
And while this is all very interesting, where do you start? There is no generic “correct” answer for any individual organization. In deciding what is right for your organisation you need to first understand where you are in this ever-changing world. Developing a true understanding and situational awareness of your business and context, in the face of changing customer demands and transformational evolution of technology, is vital but often neglected
The challenges facing the consumer goods and retail sectors have never been more real. Almost every week another store disappears from our high streets and shopping malls. Or another brand makes headlines with profit warnings in the face of competitive pressures from their established market(s) and customer base being disrupted.