Optimism despite disruptive forces in retail sector: WTW’s Global Retail Survey
07 Março 2024 - 7:15AM
Retailers are optimistic about their prospects and the future of
physical stores. But they face growing risks in a highly
challenging and complex market, driven by disruptive forces such as
social commerce, artificial intelligence (AI) and the metaverse,
according to WTW’s Global Retail Risk Outlook 2024.
WTW (NASDAQ: WTW), a leading global advisory, broking, and
solutions company, surveyed 700 senior decision makers in food and
supermarkets, luxury and fashion, department stores, health and
beauty, electronics, home and DIY and online-only retailers, to
understand how the sector sees the future and its risks, challenges
and opportunities.
Key findings include:
- Physical stores are here to stay: As consumers
continue to value the in-store experience, 84% of
retailers say they will have a mix of physical stores in 3-5 years’
time. Surprisingly, that includes 7% of online
pure-play businesses, who have no physical footprint today.
- AI a gamechanger?: Artificial intelligence is
viewed as a pivotal opportunity, with 48%
expecting it to revolutionise retail operations. However it comes
hand in hand with increased risks. More than 4 in 10
(43%) of respondents identified cyber threats as
significant business risks and 45% named rapid
changes in technology among their greatest obstacles to achieving
strategy.
- Reputation risks are increasing: The danger to
a retailer’s brand and reputation was identified by
50% of those surveyed as the greatest risk facing
the sector in the next three to five years. The rise of the
influencer and the popularity of celebrity endorsements opens
brands up to social media controversies.
- Tough customers: Consumers have become more
elusive and harder to please, increasingly expecting a seamless
experience. Retailers are looking to technology to provide a more
personalized, seamless service, with 52% naming
improving the customer experience among their top strategic
priorities for the next two years.
- Hard to get the right insurance: As risks
increase, firms face a raft of challenges in getting the cover they
need at an acceptable price – 44% cited high
deductibles, 36% historic loss experience, and
32% lack of risk or claims data as barriers. This
may be leaving businesses dangerously exposed.
- Reasons for optimism: Despite challenging
trading conditions, retailers expect for their strategies to reap
rewards in the near term, with 58% responding that
they expect to be a little or a lot more profitable within two
years.
Garret Gaughan, Head of Direct and Facultative, at WTW, said:
“It is reassuring to see that the Retail Industry is very upbeat
about the future and embracing new technology such as AI whilst
maintaining a healthy awareness of the risks that go with this.
“It will be crucial though that businesses navigate this new
digital world safely. Public confidence and reputation are hard won
and swiftly lost and by embracing tech and the digital landscape,
businesses need to be aware they need to protect themselves in new
ways.
“However, it is fascinating that despite so much commentary
regarding the demise of physical retail, even purely on-line
companies, see their future as including some element of physical
retail space.”
About WTW
At WTW (NASDAQ: WTW), we provide data-driven, insight-led
solutions in the areas of people, risk and capital. Leveraging the
global view and local expertise of our colleagues serving 140
countries and markets, we help organizations sharpen their
strategy, enhance organizational resilience, motivate their
workforce and maximize performance.
Working shoulder to shoulder with our clients, we uncover
opportunities for sustainable success—and provide perspective that
moves you.
Learn more at wtwco.com.
Media contact
Sarah Booker: +44 7917 722040Sarah.Booker@wtwco.com
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