In KPMG’s most recent global survey of consumer and retail chief executive officers of companies with annual revenue of more than $1 billion, the overall sentiment was positive as the world marks more than a year of dealing with the impact of COVID-19.
The authors of the report found 90 percent of consumer and retail CEOs “want to lock in the sustainability and climate change gains that they have made as a result of the pandemic,” while a similar number noted they are “confident or very confident in their company’s growth prospects in the next three years” and 92 percent of executives polled said they “are confident or very confident in the sector’s growth prospects in the next three years.”
In regard to issues that threaten their company’s growth prospects over the next three years, “supply chain risk” garnered the most votes with 43 percent.
That sentiment comes as bottlenecks, labor shortages and congestion at major ports impede the flow of finished goods as well as raw materials. On its third-quarter call last week, Nike cited supply chain issues as hurting its inventory and impeding sales, while brands from Peloton to Stitch Fix have said the same. Only this week the fragility of the world’s shipping system made headlines when a huge transport ship ran aground in the Suez Canal, effectively shutting of that vital waterway to almost all traffic with no sign of when it will be unblocked.
Matt Kramer, KPMG’s national sector leader for consumer and retail, said the “challenges in the supply chain are numerous from demand predictability, production capacity constraints, port delays, carton and driver shortages, as well as higher input and transportation costs. Ensuring products are efficiently delivered through the supply chain to customers with greater transparency will be both a challenge and significant focus in 2021.”
When asked about the digitalization of the industry triggered by the pandemic, 68 percent of retail executives said “in a matter of months the pandemic accelerated the creation of new digital business models and revenue streams,” while 17 percent of those polled said “progress accelerated sharply, putting them years in advance of where they expected to be.”
Fifty-five percent of respondents also noted that the pandemic accelerated “the creation of a seamless digital customer experience in a matter of months,” while 38 percent said that progress sharply accelerated, putting them years in advance of where they expected to be.
When it comes to customer engagement, 65 percent of those polled said these processes are being done by AI chat bots, via social media and on websites.