Hot off the heels of ShopTalk Las Vegas, we took a trip to Barcelona to attend and speak at the World Retail Congress. With Matt, our Co-founder & Exec Chair speaking on the future of the industry and the current state of investment market in a private top 30 global CEO forum and Archie, our Innovation Director speaking on Circularity and Retail's Journey to Net Zero – read more below!
The event covered four key areas of retail:
Resilient retail
Transformational retail
Purposeful retail
Customer-focused retail
Retailing has faced huge challenges in recent years, from the Covid-19 pandemic through to today’s worsening macro-economic conditions. We’re seeing enormous operational pressures across retail and the industry’s response has been to show incredible resilience, implement rapid change, embrace risk and to be more creative than ever.
In the spirit of democratising access to the event, we’re lifting the lid on our top takeaways:
I came away from WRC with pages and pages of notes, always a good sign of a thought-provoking conference! We covered a lot of ground in the sessions, broadly speaking the themes of health & wellbeing, gaming & sports, discount concepts, plumbing tech and ESG.
My key takeouts:
I was very interested in exploring some of the trends coming out of China, specifically the way that retailers are developing technology that enables them to replace clunky, long-term ERP systems with digital-only operating systems. This trend highlights the importance of staying up to date with the latest technology to improve business efficiency and stay competitive in the market.
ESG-driven companies have an 8% growth advantage compared to others, according to McKinsey. This highlights the importance of focusing on sustainability and social responsibility to enhance business performance.
Suppliers are becoming competitors due to technology commoditization, allowing them to be very agile against established brands. The Shein model is a great example of this. It's crucial to remember what your key assets are to stay ahead of the game.
Wage inflation has risen significantly, with an average of 5.2% between 2017 and 2022, compared to 2% between 2012 and 2017. Furthermore, 60% of vacancies are on the front line, which highlights the need to address wage issues and employee retention.
Many brands are now focusing on share of life rather than just share of wallet, opening up revenue streams in retail media, marketplaces, and B2B that were not previously explored. There's significant upside potential in those three areas, roughly 3x the market.
There's a belief that two-thirds of the workforce will require some form of upgrading. Significant investment is required to upgrade skills, enhance productivity, and retain talent, highlighting the importance of employee development and training programs.
Whilst at the World Retail Congress, I co-hosted a workshop on Net Zero and Circularity and so my key takeaways are largely focused on that theme – both from the workshop and what others said on the main stage:
DEGLOBALISATION:
Despite the headlines, the overwhelming sense was that there is no real sign of major deglobalisation. The decoupling of the West and China is happening in tech, but for companies the speed and convenience of existing supply chains is still critical. That being said, we did note that there is a growing investment into diversification away from single reliance on a particular country or region.
CONSUMER BEHAVIOUR:
Whilst the pandemic continues to permeate every conversation, post pandemic consumer behaviour now seems to be normalising. The two big shifts of travel and remote working seem to be structurally different now and here to stay.
CLIMATE CHANGE:
2022 was the first year where climate change disrupted global economy. The Yangtze River – the third longest river in the world - virtually dried up last year, bringing major disruption to food supply chains and hydro energy production across Eurasia. Even if companies and countries do make sustainable changes, it still takes a long time before it changes climate.
There are still big climate risks everywhere that need managing and mitigating, and ambitious Net Zero targets and transitioning to circular models are now front of mind for Retail CEOs. But these changes are still seen as a cost and regulatory challenge.
The overarching sense is that the most successful retailers and brands in the future will be those that recognise and capitalise on the inevitable opportunities that are emerging. Innovation is starting to drive a transition of the $8tn global food sector, and there are huge opportunities for investors, entrepreneurs, and startups across four primary areas: alternative proteins, clean nutrition, functional food, and food waste reduction.
CIRCULARITY:
Between 80%-90% of consumers’ environmental footprint is through production, and 60% of unwanted garments are thrown away in Europe - 85% in the US. These statistics show that the current production model has a long way to go and needs to be reinvented. The consumer sector needs to find ways to get more revenue from things that have already been made, driving a shift from Consumption to Use and Re-use.
PURPOSEFUL RETAIL:
A recurring theme throughout the event was purpose, and optimism about the future. There is increased demand across all generations of consumers, for purposeful retail from consumers, even with the current cost of living crisis.
The pandemic has made us pause and think, and since then, awareness of sustainability has more than doubled. Consumers expect brands to stand behind values and have more cohesive view of what a brand stands for. But as Chairperson of the John Lewis Partnership, Sharon White said in her keynote speech, people want Value as well as Values.
I’ve not attended an event this size and scope since before the pandemic, and it was so great to be surrounded by such an amazing group of retailers from across the globe. Watching the keynote speeches, it struck me that there are so many leadership styles and how effective they can each be.
It was also great to see a good gender split on the stage – something I’m very passionate about – and it feels like we’re making a real step change. There were, however, hardly any CEOs of colour on stage.
There was a lot of reflection on the impact of the pandemic – even three years on it’s still having such an impact – but equally, lots of optimism about growth returning and the future of the bricks and mortar. Another hot topic was climate change and sustainability, which came up in nearly every fireside chat.
Here are my top takeaways from the event:
By far the most impactful was listening to Professor Scott Galloway who had over 130 slides to present in 20 minutes… He covered the top 1% of wealth and the inequality it’s driving, the negative impact social media is having on our children – and his belief that TikTok should be banned.
Suzie Wokabi, Founder of SuzieBeauty and SB Dada was so inspiring! She spoke about her journey and how she is about to go again with a new beauty brand aimed at Gen Z.
Listening to Paul Marchant, CEO of Primark reflect that the leaders came together so well in the pandemic, but now are going back to pre-pandemic behaviours. In the pandemic all the CEOs came together on Helen Dickinson, CEO of the British Retail Consortium's call each week to support and educate each other. We instigated our own version for our portfolio CEOs and still do this every month, to share ideas and grow as a team.
Awareness Code Book - the periodic table for leadership. How to become extraordinary!
The Homeless Entrepreneur and driving meaningful social impact.
Louise Greenlees from our partner brand TJX getting the Woman of the Year award – congratulations Louise!
Listening to a talk from David Boynton, CEO of The Body Shop about going back to its founding purpose and the success of their open sourced Open Hire policy.
Kids Against Plastic - a 19-year-old and 9-year-old stole the show when they closed the Tuesday session with their presentation on climate change. They gave a rallying call for the retail leaders in the room to not just set achievable targets over years, but to make changes every day to drive significant change.
Interested in learning more about future-proofing your consumer, tech or retail brand? Our Innovation team would love to chat with you. We’re always asking if there’s a better way — for businesses to grow, create change through technology, and achieve more meaningful success.
Alternatively, you can find out more about the work we do at True on our website www.true.global
