Deloitte report reveals retailers’ top four investment priorities for 2021
Digital acceleration tops the list of four retail investment priorities for 2021 as identified by retail executives in a new report by Deloitte.
Most (88%) of the executives said they would be making moderate to major investments in ramping up digital, according to Deloitte’s 2021 Retail Industry Outlook: The New Rules of Retail report, followed by investments in health and safety (78%), supply chain resilience (78%) and realignment of cost structure (72%).
The report, for which Deloitte surveyed 50 retail executives and industry experts, offered suggestions on how retailers can navigate “the new rules of retail’ to maximize their investments in the four areas. Highlights are below.
*Digital investment drives growth: Most retailers expect a digital engagement increase throughout 2021. Only three in 10 executives rated their organizations as having mature digital capabilities and, as such, many are planning “major” investments in e-commerce, contactless capabilities, and store technology upgrades.
“While having a digital touchpoint might help retailers meet minimum consumer expectations, they should look for additional capabilities to differentiate themselves as customer acquisition costs rise,” the report advised. “For the long game, the new rule of retail is about looking for new revenue models, like subscriptions or memberships, and forming new partnerships and alliances to create a profitable and digital omnichannel experience.”
*Health and safety remain a top priority: Most retail executives plan to make moderate to large investments in health and safety in 2021, with three-quarters investing in sanitation and barriers, while one-third plan to invest in employee testing capabilities.
Executives stated that both “health and safety” and “trust” would be among the top 2021 purchase drivers for US consumers.
Retailers should go beyond the status quo where health and safety investments are concerned to create greater differentiation, loyalty, and trust.
*Improving supply chain resiliency: Eight out of 10 retailers expect moderate to major supply chain investments in 2021. The same number also view measuring supply chain resiliency as increasingly important.
Order fulfillment (e.g., last-mile delivery and curbside pickup) will see the heaviest investments, followed by warehouse management and procurement, according to Deloitte’s research.
“Given the disruption consumers felt during the pandemic, it will be important for retailers to build back confidence by winning the last mile, fortifying every link in the supply chain, driving decisions through the consumer lens, and measuring resiliency investment,” the report said.
*Cost realignment opportunities: COVID has created a unique opportunity for retailers to rebalance cost structures, and new rules of profitability will enable retailers to explore alternative ways of engaging consumers.