2022 promises to be a more predictable year for retail, with lockdowns a thing of the past (we hope), where borders are open, populations are mobile and face-to-face retailing is celebrated.
That said, it is not likely to be all beer and skittles!
The acceleration of online retail continued in 2021, as many consumers made it their channel of choice and there is no doubt that it is here to stay. Data-driven online retailing is the new oil and will continue to challenge traditional bricks-and-mortar models as the channel-agnostic customer becomes more demanding than ever.
The Australian Retail Outlook 2022 (PDF 5.6MB) – co-produced with Inside Retail Magazine – offers key insights into the year ahead. In addition to the annual Inside Retail survey results, KPMG retail specialists dive into the key trends and forecasts including expert commentary on topics including personalisation, supply chain agility, ESG, business model transformation, merchandise planning and omni channel reporting.
The agile shall win the day. In 2021, we saw many retailers become truly omnichannel and redefine their customer strategy, promise, and journeys in a disrupted retail landscape. As we move on from what we hope was the worst of the pandemic, best practice retailers are continuing to adapt to the new normal, including upgrades in their front, middle and back offices, store rationalisation, and heavy investment in understanding their customer, digital offerings, and supply-chain agility.
Key highlights
Summarised below are four articles from the report where KPMG Australia retail specialists share their thoughts for the year ahead:
Coronavirus’ call to transform
The pandemic has accelerated the pace of change in retail, creating an opportunity for businesses that can adapt faster and better than their peers. Stakeholder management will be key.
As we gather momentum in 2022 and return to a ‘new normal’, retailers are looking to transform their business models to leverage a retail environment where consumer behaviours and expectations have changed at warp speed.
This report explores the real cost of transformation and the key operational hurdles that retailers will need to overcome including:
- Supply and freight costs
- Back to business as usual
- ESG: retail’s new ticket to play
- Stakeholder management
Personalisation is the new loyalty program
Customers and businesses benefit when engagement goes way beyond awarding and cashing in points. Today, customers expect highly tailored and targeted interactions to be of value, they need to be personalised timely and must provide meaningful and relevant experiences.
This requires creating a digital fingerprint that integrates the customer’s profile data, captures their transactions, tracks all interactions across all channels and can predict future behaviours, values, and preferences.
This report focuses on capabilities that need to be aligned to develop deeply personalised customer engagement including:
- A cross-functional way of working
- Collection of deep customer insights
- Continual and transparent measurement
- A scalable customer engagement platform
Welcome to the supply chain of the future
A handful of major obstacles stand in the way of retailers being prepared for the demand and supply issues they will face in the year ahead.
Whilst 2020 was about dealing with the outcomes of the acceleration of e-commerce and omnichannel, in 2021, retailers were trying to cope with a perfect storm of demand and supply issues, including international shipping uncertainty, loss of capacity, increased costs – even a lack of containers and pallets.
This report explores solutions to overcome today’s major challenges for retailers including:
- Building a new target operating model
- Integrating process and physical automation throughout the supply chain
- Managing increased process complexity
- Understanding true channel cost and SKU profitability
- Integrating new suppliers and third-party logistics partners
Level up: What's next for sustainability?
It’s no secret that environmental, social and governance (ESG) expectations have increased exponentially. The subject is dominating the media, with the retail sector firmly in the spotlight.
Brand purpose and how well ESG is integrated within an organisation can truly set it apart. Consumers are judging retailers on their treatment of employees, company diversity, human rights in the supply chain, environmental footprint, and resource circularity. All this has helped push consumer brands to prioritise ESG as a strategic business focus.
This report discusses the following three categories of ESG integration that position most Australian retailers:
- Need to review goals and priorities
- Need to operationalise ESG
- Leading on ESG
Reverse logistics is becoming more critical, driven by environmental, social, and governance requirements, and larger return volumes. Retailers need to optimise reverse networks just as much as delivery, often using different capabilities from their third-party logistics partners.
Download the Australian Retail Outlook 2022 (PDF 5.6MB) to read all the reports on retail trends and expert forecasts for the year ahead.
We hope you find this report valuable and that it contributes to your own thinking about the year ahead.
