Mapping retail’s changing landscape

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At AlixPartners, we work with retailers around the world, both healthy and successful, and also those under operational and financial pressure.

Successful retailers are those who carefully and constantly watch how their consumer markets are changing and work out how best to respond to those changes – whether through changing formats, categories, locations, or channels – so AlixPartners was delighted to sponsor the Emerging Leader Award at the Oracle Retail Week Awards earlier this month, Many of today’s senior managers and directors of large retailers are now into their 50s and have seen far-reaching change since they began their careers in the 1980s or earlier.

There’s been the growth of global retail, game-changing technology, the arrival of the internet – all nigh-on impossible to predict back in the 1970s and 1980s.

So the people running retailers today have been no strangers to change in the industry, and yet some of the shifts predicted to occur over the next 10 years may be even more far reaching.

Some analysts are talking about the death of the local high street, as more and more of our shopping now takes place in out-of-town centres, online, or through newly-emerging technologies such as social media.

We are seeing an ever-growing number of specialists collapsing as the major grocers and online shopping take more of the non-food market. Global retailers continue to consolidate and grow, and despite a slight slowdown in expansion at present as retailers batten down the hatches to weather their own local storms, the pace of global growth is bound to continue.

In a few years’ time, the concept of ‘UK retail’ may seem as anachronistic as the 1930s newspaper headline, “Fog in Channel – Continent cut off”.

Our belief, therefore, is that the successful retail leaders of the future will be those who do not focus exclusively on their own business model and performance, but rather look outwards to see how the retail landscape is changing, whether geographically, technologically or demographically, and staying one or two steps ahead of that.

They will be far more adept at managing stakeholder relationships with private equity funds, banks, shareholders, credit insurers, technology partners and suppliers.

They will be global in outlook and probably multilingual. They will be totally comfortable in stores, online, and anywhere between the two – we are already seeing examples of major retailers hiring chief executives who bring these critical skills to the table.

Along with a much broader international and multichannel outlook will come a different philosophy, one of ever-present change.

As customers move between countries and channels, and touchpoints become ever more disparate and unpredictable, the retail leader of the future will need to be able to embrace a world of continual change and enable their retail business to respond and adapt.