Retail leadership for extraordinary times
AlixPartners @ World Retail Congress 2023
"Digital has been a major strategy for retailers for the past decade, though it means different things to different companies. But for almost all companies it has led to profit erosion. As the industry prepares for a difficult 2023 in the face of potential recession and other disruptions, retail leaders need a path to profitable growth through Digital-First Retail."
AlixPartners @ World Retail Congress 2023
"Digital has been a major strategy for retailers for the past decade, though it means different things to different companies. But for almost all companies it has led to profit erosion. As the industry prepares for a difficult 2023 in the face of potential recession and other disruptions, retail leaders need a path to profitable growth through Digital-First Retail."
RESEARCH
Turning profit destruction into customer and shareholder value
Digital commerce drove retail’s growth over the past decade. But our analysis shows that as online penetration grows, retailers’ profits shrink. The cost of serving customers anytime, anywhere, at any speed does not bring in enough topline growth to best monetize existing investments in machinery and technology.
Our proprietary research with World Retail Congress tells us:
- Retailers are spending big—but inefficiently—when it comes to digital, so they're not seeing the intended results.
- Many retailers lack an understanding of digital profit across the organization, which drives misaligned actions.
- Digital-first retail (DFR) is how to profitably evolve. It views digital not as a channel, but as the core of your business model, which is a completely new way of operating.
- Retailers must establish new KPIs with a digital-first lens to match their new operating model.
Click below to access the report and learn more about these implications for retailers.
CAPABILITIES
Digital-First Retail:
Online. Offline. Bottom Line.
Retailers continue to invest a lot to keep up with the omnichannel customer. But, for most, increased digital penetration is leading to shrinking profits—so their bottom lines stay right there, at the bottom. Until now.
See how our experts can help you quickly unlock profit.
Meet the team
More insights from our retail experts
Online? Offline? It's all about the bottom line...
The impact of the pandemic on digital shopping habits has been both profound and well-documented. However, retailers are facing a genuine post-pandemic dilemma regarding their omnichannel strategies and how to balance bricks and mortar with online. Digital-only retailers and marketplaces are losing value and many are looking to balance their physical real estate alongside their digital presences.
Are you a digital-first retailer or are old paradigms holding you back?
Here’s a thought exercise for retailers as consumer behavior continues to blend channels: “What if you thought of yourself as an online retailer that also has stores, rather than a stores-based retailer that also has a website?” It’s a provocative question that could hold the main clue to the puzzle of slowing profits as e-commerce becomes an increasingly prominent part of overall sales.
How are top retailers preparing for the disruptions of 2023?
Retailers that constantly seek to improve and solve both internal problems and external disruptions will stay resilient and be poised to survive the worst. In addition to the inventory pileups, supply chain issues, inflation, and labor shortages, another big challenge for the industry has been the growing power of the consumer and falling brand loyalty.
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Contact us if you would like to learn more about our capabilities, discuss the future of retail, or other implications for your business.
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