According to the Deloitte 2022 Retail Industry Outlook, the pandemic has created the chance for a long-overdue retail reset that may help move many companies into a more stable, and profitable position.
To achieve that, retailers will have to balance near-term challenges with long-term commitments and transformational thinking. Deloitte suggested that 2022 offers opportunities to restructure outmoded supply chains, rightsize inventory management, review pricing, recalibrate promotional cadences and reinvent the physical store for a digital age that constantly offers consumers new ways to shop.
Some specific recommendations observations include:
- Many retail executives see labor shortages as a leading concern, especially as it may be difficult to compete with gig economy flexibility for hourly wage employees. Indeed, 70% of executives say labor shortages, especially in hourly wage jobs and 74% expect shortages in customer-facing positions in 2022. Warehouse positions also will be hit in the year ahead, with 56% of retailers surveyed anticipating labor shortfalls in hourly supply chain, distribution, and logistics positions. Given the pervasiveness of the situation, retailers have to consider how they have to address the challenge under present employment terms or by changing their business model while investing in a workforce for the future while focusing on technology and automation to rely less on physical labor.
- True supply chain resilience will likely require significant change given that 80% of executives believe consumers will prioritize stock availability over retailer loyalty in the upcoming year. Where and when customers make their purchases is far less predictable at a time when consumers are curating their transaction using shopping simplification strategies, exploring options outside the already expanded range of choices, for instance with live-stream purchasing, promoting their choices on social media and even reselling merchandise through digital platforms. As such, retailers have to reconsider demand planning, inventory management and fulfillment forecasting to take new consumer behaviors into account.
- The fusion of digital and physical experiences is accelerating. So, retailers should make significant investments that not only meet the e-commerce needs of the present but also those of the future.
