The FINANCIAL — Retailers across the world are increasingly opting for traditional ‘back-to-basics’ strategies to drive growth, foregoing newer business trends, according to new research from The Consumer Goods Forum (CGF) and KPMG International.
43 percent of businesses ranked sales growth among the top three levers for improving profitability over the next 2 years, shows the report, Consumer Executive Top of Mind Survey. This is followed closely by product innovation (39 percent) and cost reduction programs (36 percent). Interestingly, IT transformation – a new approach to ensuring profitability – only ranked in the top three growth levers for 19 percent of businesses, much lower than might be expected, according to KPMG International Cooperative.
An increase in informed consumers is expected to be the most positive impact on profitability, with 64 percent of businesses stating this belief. In fact, one-third of retailers now expect to collaborate with consumers as a means of driving innovation, according to KPMG International Cooperative. The survey suggests that for businesses, the old adage that the customer is always right is once again true.
“The world of retail is always fluid, as technology evolves and demographic trends alter. What is interesting from this research, however, is that businesses are turning to tried and tested tactics to ensure they not only survive in this new climate, but grow in it. Perhaps the main conclusion to take from this research is that while new trends such as IT transformation are important, businesses still recognize the overriding need to have good products and low costs, all delivered with an unwavering focus on the customer. It is simple business, but appealing in today’s economic climate,” said Sabine Ritter, Executive Vice President at the CGF.
“Globally, consumers have increasing access to technology and information and, as a result, are demanding more of everything. These consumer expectations, coupled with rising input prices, complex supply chains, regulation and competition, make it a challenge for many consumer companies to grow or even sustain margins. The results of this important survey explore the issues that are at the top of consumer executives’ agendas, and how their companies are navigating a complex and changing environment,” said Willy Kruh, Global Chair of Consumer Markets, KPMG International.
Discussion about this post