Tough times in retail but CEOs are optimistic

Despite the many challenges the retail industry sector faces, a majority of CEOs are confident of sales growth in 2023, a year in which balancing increasing costs in the supply chain with a world-class customer proposition will be central to strategy, says a new Retail Week report.

According to Retail 2023, based on interviews with the leaders of 54 UK businesses, sustainability and ensuring diversity, inclusion and engagement among staff are also key focus areas for the industry.

Why it matters

Disruption is the ‘new normal’ for retailers in the UK: after Brexit came the pandemic and now a cost-of-living crisis. To succeed in this environment, the report advises, retailers will need to build in capacity to deal with the unexpected and focus on the things they can control.

Takeaways

• Two thirds (67%) of retail CEOs believe sales will be higher in 2023, versus 10% forecasting them to be flat and 14% expecting them to be lower.
• 61% say PPC is the area where they will spend the most marketing budget, followed by 55% for Instagram; Facebook is expected to decline sharply (from 75% in 2022 to 47% in 2023). 
• 31% expect more sustainable delivery options and click-and-collect to be the most in-demand delivery options next year.
• Retailers expect an average 49% of sales to be online within three years, up from 46% now; in-store sales will decline from 38% to 35%.
• 78% of retailers have a single view of their stock but only 58% have a single view of their customer.

The big idea

The ideal channel mix and choice of marketing activity is unique to each retailer. What is important, however, is to maintain agility and make decisions based on what resonates with the respective target audience.

Sourced from Retail Week