We are emerging from three bruising years, during which the industry hascircled the wagons and played safe. In this next era, inflationary pressureswill lift, and ambitious retailers will need to be more innovative to hit thosewell-published targets. The pressure will change, not disappear, as decreasingconsumer disposable income and a desire for greater health and environmentalsustainability remain constant.
There is opportunity to win through collaboration in three macro-trends.Although delivering within them will create tensions, winning will meanwellbeing 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 havemade some real inroads here, from reductions in packaging through to reducedcarbon 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 behard-wired into development plans. Some buyers won’t even talk to theirsuppliers unless the packaging is truly sustainable. What are you doing to helpyour retailer hit their green goals? Sell it, track it and get commercialmomentum behind it. Be on the front foot here.
Another vital trend is artificial intelligence. We all know it’s happeningaround us, but how many really understand how it’s going to revolutionise theface of shopping?
Retailers are investing in AI capabilities and hiring staff to meet the needsof this ‘new economy’, in which data, insight and solutions have never been soreadily available. Data has always been key to driving loyalty schemes, butwith 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 moreefficiently. The omnichannel world and digital retail media allow much moreaccurate targeting, so that awkward conversation with the retailer demandingmarketing investment could now be the basis of joint plans, replacing largeinvestments in the marketing initiatives of old.
The third trending dynamic is the ‘people business’. Think about what thatreally means. We’ve seen incredible change over the past few years. There ismore pressure on fewer people, while our expectations as consumers andemployees 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 skillsetsrequired to win and organise structures around them. Start with a blank canvasand stop pushing outdated job roles. Development and training increase inimportance here.
Look now at these three trends and demand a triple-win for consumers, retailersand suppliers within each. It can be the first step of a new prosperousera.