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Retail Execs Acknowledge Need to Better Understand Customer Needs, Survey

June 26, 2019, 09:00 AM
Filed Under: Retail
Related: KPMG Survey

The overwhelming majority of U.S. chief executive officers (85%) in the consumer and retail (C&R) industry are looking to inorganic growth strategies over the next three years to build long-term growth.  These CEOs see M&A as an opportunity to identify targets that could either disrupt the industry or provide adjacencies to their existing portfolio, according to the KPMG CEO Outlook 2019 survey.

"Consumer and retail CEOs continue to be optimistic about the growth prospects of their companies, but understand that it is not business as usual – the playbook needs to change," said Mark Schmeling, National Sector Leader and National Advisory Industry Leader, Consumer & Retail, KPMG LLP. "Portfolio reshaping and understanding where and how target consumers spend their time and money need to be key components of that revised playbook."

Investment in Technology Increasing

Technology continues to play a significant role in the industry's transformation with 75 percent of U.S. C&R CEOs increasing investment in new technologies to enhance their connections to customers, and build the brand experience.  Eighty-five percent also expect a significant return on investment from digital transformation, artificial intelligence and robotic process automation within a three-year period.

"CEOs indicated that they are stepping up their investments in technology, including cloud computing, artificial intelligence, machine learning and blockchain to drive efficiencies in the business, improve the consumer experience and provide the necessary data and analytics capabilities to the organization to drive insights," Schmeling said. "Laggards that fail to make these investments or defer them, will struggle to compete in the future."

Cybersecurity to Build Customer Trust

While investing in technology is critical, 80 percent of U.S. C&R CEOs agree that a strong cyber strategy is needed to build trust with the public. The majority (75%) said that protecting customers' data is one of their most important responsibilities and is essential to growing their customer base.

"Data privacy is a mission critical capability, not only as a regulatory mandate, but also from a customer trust perspective," said Schmeling. "Current and future customers will continue to interact with companies that are committed to protecting their data and privacy."

Agility & Employing the Right Talent Critical to Success

Seventy-eight percent of U.S. C&R CEOs also said that acting with agility is key to their businesses' success. Almost two-thirds (62%) said that over the next three years, their organizations need to improve their innovation processes and execution, and 73 percent said that they must look beyond purely financial growth to achieve long-term, sustainable success.

To strengthen resilience, 84 percent of CEOs said that they are actively transforming their leadership teams. They also identified modernizing the workforce as the most important strategy to ensure their organizations are future-ready.

"C&R companies are actively looking for the right talent and skills, especially in data and analytics, to build resilience, and allow their organizations to remain competitive and grow," said Schmeling.

Understanding Customers and Personalizing the Customer Experience

KPMG's research also revealed that 80 percent of U.S. C&R CEOs believe that they can significantly improve their understanding of their customers. However, 55 percent think that to date, the investments made in trying to personalize the customer experience have not delivered the growth benefits they were hoping for.

"Understanding customers and personalizing the customer experience are critical strategies," said Julio Hernandez, KPMG Advisory partner and leader of the firm's Global Customer Center of Excellence and U.S. Customer Advisory Practice. "However, there is a clear mandate to do this in an ethical and a protected way. Companies are seeking to navigate this need in a thoughtful and deliberate manner, to fuel profitable growth."

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