We are emerging from three bruising years, during which the industry has circled the wagons and played safe. In this next era, inflationary pressures will lift, and ambitious retailers will need to be more innovative to hit those well-published targets. The pressure will change, not disappear, as decreasing consumer disposable income and a desire for greater health and environmental sustainability remain constant.
There is opportunity to win through collaboration in three macro-trends. Although delivering within them will create tensions, winning will mean wellbeing for your business.
First is the green agenda. While consumers cry out for cheap food, environmental targets are not going away. Both suppliers and retailers have made some real inroads here, from reductions in packaging through to reduced carbon emissions and food waste.
Continued changes like reductions in non-recyclable packaging, for example, will be a retailer target but a supplier workload. This thinking should now be hard-wired into development plans. Some buyers won’t even talk to their suppliers unless the packaging is truly sustainable. What are you doing to help your retailer hit their green goals? Sell it, track it and get commercial momentum behind it. Be on the front foot here.
Another vital trend is artificial intelligence. We all know it’s happening around us, but how many really understand how it’s going to revolutionise the face of shopping?
Retailers are investing in AI capabilities and hiring staff to meet the needs of this ‘new economy’, in which data, insight and solutions have never been so readily available. Data has always been key to driving loyalty schemes, but with the increasing role of AI, everything gets thrust into overdrive.
The rise of retail media, and its increasing role in the modern retailer P&L, is anticipated to drive hundreds of millions in spend during this year alone. These areas represent real opportunities for the industry to operate more efficiently. The omnichannel world and digital retail media allow much more accurate targeting, so that awkward conversation with the retailer demanding marketing investment could now be the basis of joint plans, replacing large investments in the marketing initiatives of old.
The third trending dynamic is the ‘people business’. Think about what that really means. We’ve seen incredible change over the past few years. There is more pressure on fewer people, while our expectations as consumers and employees require higher-quality outcomes: service, information, hyper-personalisation.
The next generation of leaders require more empathy, purposefulness, flexibility, and authenticity. Companies need to draw up the new skillsets required to win and organise structures around them. Start with a blank canvas and stop pushing outdated job roles. Development and training increase in importance here.
Look now at these three trends and demand a triple-win for consumers, retailers and suppliers within each. It can be the first step of a new prosperous era.