56 EY and the World Retail Congress (WRC) have published a report that explores the resilience of the retail sector and its future growth prospects. This collaboration unveils the models required for retailers to thrive in today’s challenging environment drawing from interviews with retail leaders, proprietary EY research including the EY Parthenon CEO Outlook Survey and the EY Future Consumer Index and data from Coresight Research, Oxford Economics, Capital IQ, Euromonitor, MarketWatch, ThredUp, Business Research Insights. The report, Adapting the Retail Model for a New Growth Plan, highlights the enduring strength of the retail sector, which has weathered numerous disruptions over recent decades, including the online shopping boom, smartphones, social media, financial crises, a global pandemic, supply chain disruptions, geopolitical instability and inflation. Despite these challenges, the market capitalization of the top 20 retailers globally has increased threefold, demonstrating the sector’s ability to adapt and thrive. The six priority areas identified by retail leaders to accelerate progress are: 1. Leveraging existing assets to provide B2B services – retailers are recognizing the untapped potential of their infrastructure, expertise, customer base and investing in these capabilities to unlock revenue growth opportunity across the supply chain both upstream, through offering additional value to suppliers, and downstream through acquisitions and bolt-ons that shift them into a media- or platform-led offering. 2. Repurposing physical and digital spaces to deliver more service-based offerings – although online sales continue to grow, physical stores continue to play a vital role in driving revenue. Repurposing the store and truly measuring their success from an omnichannel perspective will be more important. We see retailers repurposing store space into community hubs, click-and-collect hubs, piloting rental, resale and repair services and more. In grocery and pharmacy, integrating health services such as instore clinics and wellness programs offers further opportunities to meet evolving consumer needs. 3. Reshaping businesses through strategic divestments and acquisitions to boost performance – the EY CEO Confidence Index reveals significant attention is being directed to streamlining portfolios and restructuring to save costs and free up Adapting for growth Retail business models need to adapt to drive growth, according to new report from EY and World Retail Congress
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