Deloitte: Key retail priorities for 2022 include employee retention

With great challenges, come new opportunities.

That’s one of the main themes of Deloitte’s 2022 Retail Industry Outlook, which is based on interviews with 50 senior retail executives, all of which come from companies with at least $1 billion in annual revenue. More than half have $10 billion or more in annual revenue.  

Recent retail industry headlines paint a dire picture, from empty store shelves and hiring instability to rising inflation, the report noted.  But the challenges have yielded some positive results as retailers have been forced to reexamine their legacy systems and strategies that shaped the industry for years.

“In many ways, the pandemic has opened the door for a long-overdue great retail reset that can help move many retailers into more stable—and potentially more profitable—positions than ever before,” Deloitte stated.

Executives appear optimistic about revenue growth and margins for 2022. Some are even taking perceived headwinds and turning them into opportunities. For example, 58% saw inflation as an opportunity to take price and improve margins. Others are rethinking their old buying and discounting cadences. With fewer products to sell, some stores even stopped offering promotions, thereby boosting profits.

Other findings from the report are below.

• Seventy-percent of the executives surveyed believe that employee shortages will hamper growth and 68% believe that supply chain disruption will do the same.  

• Eighty-percent of the executives plan to make moderate-to-major investments in digital and supply chain.

• Eighty-percent of executives said they believe that consumers will prioritize stock availability over retailer loyalty in the upcoming year.

• Fulfillment and inventory and warehouse management are expected to attract the most investments in 2022. However, 57% of executives still have no plans to invest in robotics and automated material handling. 

“This is particularly concerning given the current workforce challenges the industry faces,” the report said.  “Forward-thinking retailers should strive to automate their processes as much as possible and consider making significant investments in automated driving technology and last-mile delivery.”

Deloitte identified several retail priorities for 2022, which are highlighted below.

• The workforce reimagined: After “the great resignation,” 83% of retailers say they are having to invest most heavily in recruiting new employees and retaining them. As retailers look towards the future, they should invest in technology and automation to compete with more tech-savvy industries while also offering culture, flexibility, and purpose to attract talent.
• A shifting supply chain: Current supply chain capabilities are changing as organizations desire more credible information and technology updates to develop a more agile system that can fit the modern-day shopper. Automation, transparency, and new partnerships are key priorities among retailers.
• Physical and digital intertwined: The fusion of digital and physical experiences is set to accelerate, with 70% of retailers planning for moderate to major investments in digital marketing, and 67% citing e-commerce and online shopping as top investment areas. Data security is a major concern, but only 25% of executives planning to make major investments in this space.

To read the complete report, click here: Deloitte’s 2022 Retail Industry Outlook.