Retail market complexity has increased by over 2180% in just four years, putting huge pressure on CEOs looking to grow, maintain or save their businesses.
Understanding future market trends in such an unpredictable world has gone from difficult to virtually impossible. Millions of individual market signals need to be evaluated to understand future commercial, sector and customer direction, which can only be achieved using the latest AI and strategy consulting technology.
Maurice N’Diaye, CEO of Descartes & Mauss, commented: “Globally the retail sector is facing uncertainty and change on a scale never seen before which means executive teams are struggling to set future strategies. CEOs are faced with thousands of questions but the amount of information to be analysed means they are not getting answers.”
In 2019 Descartes & Mauss, the leading StraTech (Strategy Technology) company identified and actively monitored 57 data sets essential to understand future retail strategy. In 2023 there are now 1300 critical inputs to the index, reflecting the dramatic increase in market drivers which retailers must factor into their short, medium and long-term planning.
The factors range from the increase in input costs to supply chain disruption, the global pandemic, Ukraine war, inflation, adjusted buying habits, new regulations and just in the last few days the European banking crisis.
“If we just look at one of these areas, regulation, the increase in business complexity is affecting firms’ ability to produce and distribute products. Country by country different legislation is being introduced for climate change, packaging, labelling, banned chemicals, animal welfare, data protection and even Buy Now Pay Later (BNPL). For example, in the last two years, the number of food retail regulations has increased from 3,000 to 7,000. Being able to factor this level of change into business plans could be the difference between making a profit, breaking even or going out of business,” added N’Diaye.
Descartes & Mauss believe that the increase in retail complexity is forcing firms to act tactically dealing with issues day-to-day, rather than trying to develop strategic answers.
“Post-pandemic CEOs want to return to strategic planning, but the market is now too complex. They know that their 2019 playbook is no longer relevant and trying to set a new direction based on what worked in the past, is not an option. This is why firms are turning to StraTech and using AI to analyse millions of new data points to help formulate new strategies. If firms, particularly multinational retailers, are not able to find market answers, they risk being left behind by companies who understand the power of new technology,” concluded N’Diaye.
