Headhunters wouldn’t get very far if they didn’t know how to listen. They specialise in helping chairs, CEOs and senior executives find future colleagues with the right mix of skills, experience and cultural aptness to help them solve their organisations’ problems. And they do this by listening carefully as these leaders articulate their want and concerns. Have enough of these discussions and you’ll start to recognise patterns.
Four trends in the retail and consumer industries have become clear in recent months, as leaders prepare for the second half of the decade. These will shape how boards and CEOs approach 2025.
Streamlined leadership teams and boards
Boards and executive committees are beginning to take a ‘less-is-more’ approach to hiring C-suites.
Increasingly, we’re seeing the chief commercial officer (CCO) role expand to include both marketing and sales. At the same time, contrary to the article of faith that “people are at the heart of any business,” we’re seeing the chief people or HR officer either removed or downgraded. There is also a growing trend towards consolidating merchandising and supply chain functions.
In part, these changes follow a philosophical belief in agility, breaking silos that might otherwise have left the business less responsive to shifting market demands.
But these are also classic indicators of market pessimism. By looking to trim senior-management overheads, boards are signalling that they anticipate tough trading ahead. The shift in emphasis from marketing to sales under results-driven CCOs suggests a focus on getting cash in tills.
Harnessing AI, intelligently
Retailers are not strangers to predictive AI, which they’ve used to optimise inventory and drive operational efficiency.
While we predict more GenAI-enabled hyper-personalised customer experiences in the future, today the focus is on chatbots. And, with GenAI, cost-cutting is also a key focus.
AI bots are cheaper than traditional customer-service operations, but they’re also riskier. The fundamental challenge is that you can’t design how AI will respond to a customer issue – you can only train it to improve.
Errors could be costly. Given how expensive it is to acquire new customers, you can’t afford to let existing ones leave because, for example, the AI got confused and the customer couldn’t get through to a human being. As Mark Zuckerberg pointed out recently, complex systems can fail.
The trick will be to identify and prioritise VIP customers and those with unusual problems, and make it easier for them to talk to a human, while continuing to use the chatbot for everyday issues. This is particularly important for retailers serving middle-aged and older customers who are more likely to experience digital fatigue.
Retailers are still adapting to GenAI, so prompting and model-training skills are at a premium, especially when blended with traditional user-experience nous.
Omnichannel evolves
The binary era of digital challengers versus legacy retailers is over. Whatever your firm’s heritage, seamlessly integrated physical and online channels are no longer optional.
The general principle is to reach customers where they are: in different places at different times. But the wisest business leaders are also carefully exploiting the relative strengths of each channel, corresponding to different behaviours.
Judging by the dense December crowds on London’s Bond Street, consumer demand for experiential retail – shopping as a pastime – remains healthy.
As the cost of digital customer acquisition continues to rise, more retailers are looking to experiential and brand activations to win new customers and build emotional connections with existing ones.
For years physical-retail skills have been neglected in favour of digital skills. It’s therefore become harder to find people who can turn plain floor space into places of surprise and delight – but it’s all the more impactful when you get it right.
The middle is squeezed (again)
The cost-of-living crisis may not be worsening, but millions still feel its burden. Retailers therefore must find creative ways to balance quality and affordability.
There was talk a decade ago about market polarisation as the financial crisis squeezed the mid-market and we’re seeing something similar now. Consumers are spreading their spend across stores at different parts of the pricing spectrum.
In the groceries category, for example, it’s not unusual for affluent customers to shop mostly at Waitrose, but occasionally also at Aldi or Lidl, while also buying Riverford organic veg and fine meats from their local butcher.
The consideration for mid-market retailers is whether to try to appeal to different price points or stick to their lane.
Quality will be key, as it can command both high prices and perceptions of value for money.
It’s why brands, such as Hermès, that are associated with real artisanship, with products that are built to last and command high resale value, have been able to weather the downturn in luxury retail. That principle is likely to hold in other market segments too.
Headhunters wouldn’t get very far if they didn’t know how to listen. They specialise in helping chairs, CEOs and senior executives find future colleagues with the right mix of skills, experience and cultural aptness to help them solve their organisations’ problems. And they do this by listening carefully as these leaders articulate their want and concerns. Have enough of these discussions and you'll start to recognise patterns.
Four trends in the retail and consumer industries have become clear in recent months, as leaders prepare for the second half of the decade. These will shape how boards and CEOs approach 2025.
