At a time of increasing uncertainty and change across the global retail industry, together with our international partners, JCWG felt that it was critical to understand more about how retail leaders are identifying and responding to these challenges. Part three of five blogs on this report focuses on Customer-Focused Retail.

In the intricate world of customer-focused retail, success pivots on the ability to establish customer-centric operations and cultivate the necessary capabilities. Recent findings shed light on the current landscape, revealing both promising strides and areas for improvement within the industry.

Surprisingly, only 45% of respondents indicated that their business operations are currently (very much) customer-focused. More than half admitted to not actively prioritizing the customer, with a significant 20% of retail executives stating that their operations are not customer-focused at all. This sentiment varied across sectors, with Home/DIY/Garden/Pets and Food & Groceries/Health & Beauty registering the lowest levels of customer-centricity.

A noteworthy revelation emerged when considering geographical differences, with customer-focus being highest in the Asia-Pacific region (67%), surpassing Europe (43%) and the Americas (20%). While these results are indicative due to a low number of respondents, they highlight a potential shift in focus across continents.

Turning attention to customer-focused capabilities, the majority of respondents are actively implementing or planning to implement CRM/loyalty programs, customer metrics, and customer satisfaction management. However, only 43% reported actively engaging in ‘customer-focused leadership,’ revealing a gap in fostering a customer-first culture within their businesses. Equally concerning is that only 45% are working with or developing a Customer Data Platform (CDP), a crucial tool for a holistic 360-degree view of the customer.

In a fascinating revelation, 90% of retail executives foresee the enduring importance of physical stores over the next five years. While online stores and marketplaces also feature prominently, newer channels like the metaverse and livestreaming are in the top-3 for less than 1-in-10 executives. This suggests a current focus on more established and robust channels, rather than the hyped-up emerging ones.

Interestingly, the Fashion/Shoes/Sport category stands out, showcasing an almost equal investment focus on physical and online channels (85% and 76%, respectively). This signals a more omnichannel approach within this category compared to others.

A snapshot of the current digital sales landscape reveals that nearly half of respondents had a limited share of sales from digital channels in 2022, ranging from 1-5%. However, there is a collective expectation for substantial growth, with 35% anticipating their digital sales share to increase to over 25-100% by 2028. This trend is most apparent in categories like Food & Groceries/Health & Beauty, where retailers currently in the 1-5% bracket are expected to accelerate toward higher percentiles.

The dynamics of customer-focused retail showcase a spectrum of progress and challenges. As the industry navigates this landscape, a clear call to action emerges — bridge the gaps in customer-centric capabilities, embrace omnichannel strategies, and prepare for the undeniable surge in digital sales. The future of retail rests in the hands of those who heed these insights and adapt with agility and foresight.

Unlock valuable insights and stay ahead in retail leadership! Download the World Retail Congress Global Retail Executive Survey report today to gain a competitive edge, informed decision-making, and actionable strategies. Click the link here to access your copy now!

For help with making sure your retail business remains customer-focused, reach out to the team at JCWG!

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