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Having a strong head for business while being an admired and respectful leader can be a tough balance to strike. Here, executive leadership and consulting firm Spencer Stuart’s global retail team picks out the outstanding characteristics of high-performing retail CEOs
1. Disruption and instability are the norm
Retail presents an ever-changing landscape. Geopolitical risks, varied labour markets, sustainability pressures – including circularity becoming a must – and inflation are all shaping the current macro landscape, creating market volatility.
The stigma around second-hand goods is waning as some customers become more price-sensitive and increase demand for sustainable products.
From a growth perspective, the US has a strong outlook. Meanwhile, Europe and China are experiencing less growth. As a result, leaders should consider diversifying their supply chains to better weather market variability.
To navigate unpredictability, retail leaders must become high performers, requiring a willingness to challenge traditional ideas and strategies.
Strong leaders are also adept orchestrators, building teams with a variety of attributes (adaptability, good communication) that help navigate instability.
2. Digital and artificial intelligence become retail’s backbone
Retailers that do not integrate artificial intelligence into their business model will fall behind.
AI can help address persistent business challenges such as operational and production efficiencies.
For example, instead of creating many iterations of one product, retailers can use AI to create and refine multiple digital prototypes before going to production, saving materials, time and money.
Leaders must stay current with AI advancements to quickly identify relevant and effective use cases for their businesses.
Collaborations with chief technology officers or digital and analytics leads can help retailers develop, test and iterate different AI applications and tools.
3. Customers want ‘retailtainment’
Product is quickly taking a backseat to experience. Therefore, retailers are finding ways to seamlessly integrate into the customer lifecycle, especially in areas where the concentration of stores is high and the distance to offline shopping is short.
Retailers should build brand communities and seamless omnichannel experiences that transcend traditional retail.
For example, themed pop-ups and private member events can pique customer interest and build stronger relationships and an emotional brand connection.
Leaders can look to adjacent industries for inspiration and double down on customer feedback and social media listening to learn what customers like and want more of.
Chief experience officers can also guide what makes an experience stand out and help leaders ask the right questions.
4. Gen Z want more
Customers, especially Gen Z, demand more from retailers. As the most diverse customer demographic, Gen Z has changed the landscape of ecommerce, challenging retailers to come up with new and exciting ways to interact with them seamlessly on and offline.
Leaders can leverage tech and digital capabilities (such as AI) to personalise the customer experience and offer tailored choices in-store and online. However, retailers should be thoughtful about their sales and marketing approaches. Gen Z demands authenticity and value-led engagement.
Retail leaders should clarify their values as a company and use this as the foundation to inform product creation, messaging and interactions with Gen Z customers.
We don’t know what the rest of 2024 will bring but we are keen to see how c-suite leaders navigate the implications of these four trends.
Adeline Ducray and Christof Hirsch are consultants in Spencer Stuart’s retail, apparel and luxury goods practice.
