Beyond the Counter: 2024 Executive Outlook for Consumer & Retail

In this report, Dr Alistair Clark, Principal in the Consumer & Retail Practice at Odgers Berndtson, analyses the results of an extensive survey involving over 150 business and HR leaders within the Australian and New Zealand consumer and retail industries.

Consumer Behaviours & Business Strategy

The survey reveals a predominantly negative perception of current consumer sentiment in Australia and New Zealand, with 75% of respondents expressing a neutral or negative view. This perception of current consumer sentiment highlights the importance for businesses to adapt their strategies to navigate uncertain times and find innovative ways to maintain competitiveness amidst a cautious consumer base.

85% of organisations proactively adapt their marketing and brand strategies based on evolving consumer values and preferences. This suggests a strong commitment to staying attuned to market dynamics and meeting consumer demands effectively. Moreover, this data indicates the importance of aligning marketing and brand strategies with shifting consumer preferences. In a rapidly changing marketplace, businesses that demonstrate agility and responsiveness to evolving trends are better positioned to maintain relevance and engage effectively with their target audience.

Operational Challenges & Opportunities

70% of businesses are experiencing significant or moderate impacts from supply chain disruptions, posing challenges in inventory management. 

In response to these challenges, businesses are implementing measures to enhance inventory management efficiency. Such measures include diversifying suppliers, optimising inventory levels, implementing robust forecasting methods, and leveraging real-time inventory tracking and management technology. 

The survey reveals that 85% of respondents assign a moderate to high level of importance to technology investment, particularly in AI adoption and integration.

This indicates a widespread recognition among businesses of the transformative potential of AI in disrupting and enhancing business operations, from automation and predictive analytics to personalised customer experiences. Indeed, the survey results indicate that 80% of organisations rate their agility in adopting emerging technologies as moderate to highly agile and proactive. 

In what areas do you see the most potential for technology-driven innovation within your industry?"

The results highlight that all surveyed organisations have robust data protection measures to address data privacy concerns and maintain customer trust in an increasingly digital landscape. Additionally, all businesses surveyed indicated that they have implemented various cybersecurity measures and conduct regular assessments to protect against potential threats and ensure data integrity. 

Social & Environmental Responsibility 

The survey findings reveal that 52% of organisations consider sustainability and ethical sourcing an integral part of their business strategy. 

These results indicate a growing recognition among businesses of the importance of integrating sustainability and ethical sourcing into their practices. By prioritising sustainability, organisations align with societal values and expectations and mitigate environmental impacts, enhance brand reputation, and foster long-term resilience. Organisations that embrace sustainability as a core principle stand to gain not only in terms of environmental and social impact but also in terms of competitive advantage and stakeholder trust. A continued emphasis on sustainability will be essential for businesses to thrive in an increasingly conscious and interconnected global marketplace.

In addition, 57% of organisations have comprehensive programs and initiatives to address workplace diversity, equity, and inclusion (DEI). This suggests that these organisations are actively implementing strategies to promote a more inclusive and equitable work environment. The prevalence of comprehensive DEI programs and initiatives among surveyed organisations reflects a growing recognition of the importance of diversity and inclusion in driving organisational success. By embracing diversity and fostering an inclusive workplace, businesses can harness their employees' collective talents and perspectives, leading to innovation, collaboration, and sustainable growth.

Employee Experience

The survey findings indicate that 94% of organisations prioritise employee wellbeing, with various programs and initiatives supporting it. This suggests that these organisations recognise the importance of fostering a work environment that prioritises their employees' physical, mental, and emotional health. By implementing well-being programs and initiatives, organisations demonstrate a commitment to supporting the holistic well-being of their workforce. These initiatives may include employee assistance programs, mental health resources, flexible work arrangements, wellness workshops, access to fitness facilities, and work-life balance initiatives. 

Moreover, 47% of organisations face moderate to significant industrial relations challenges, such as Enterprise Bargaining Agreement (EBA) negotiations or wage remediation issues. The prevalence of challenges in industrial relations highlights the importance of proactive management and effective communication in navigating these complexities.

Business Growth & Leadership Trends

According to the survey results, 57% of respondents foresee revenue growth in 2024 through organic means, indicating that they expect to achieve growth through internal initiatives such as expanding existing operations and increasing market share. Additionally, 23% of respondents anticipate combining organic and inorganic growth, suggesting they plan to supplement internal growth efforts with strategic mergers and acquisitions (M&A) to capitalise on market opportunities and accelerate expansion. On the other hand, 19% of respondents do not anticipate any growth in revenue in 2024. 

Based on the survey, six essential leadership skills for success in 2024 are: 

• Strong leadership and change management skills indicate the importance of effective leadership in guiding businesses through periods of change and uncertainty.
• Strategic vision and adaptability suggest the significance of having leaders who can develop long-term strategies while remaining flexible and responsive to evolving market conditions.
• Data literacy and analytics skills reflect the growing importance of data-driven decision-making and the ability to derive actionable insights from data.
• Digital transformation expertise highlights the importance of leaders who can drive digital initiatives and navigate the complexities of digital transformation in today's business landscape.
• Technology agility highlights the need for leaders adept at leveraging technology to drive innovation and improve organisational efficiency.
• Cross-functional collaboration skills emphasise the value of leaders who can foster collaboration and teamwork across different organisational departments and functions.

These capabilities reflect the evolving demands of executives in a rapidly changing business environment. Effective leadership, strategic foresight, digital acumen, and collaborative abilities are essential for businesses to thrive and adapt to the challenges and opportunities in 2024.

According to the survey, 85% of businesses have a robust succession planning process for C-Suite roles. This indicates a proactive approach to leadership development and continuity within these businesses (for further insights on succession planning, read Future-Proofing Leadership: Enhancing Organisational Resilience.) However, despite having succession plans, 39% of respondents still anticipate potential recruitment needs for specific C-Suite roles in 2024.

This suggests that while businesses may have succession plans, they also recognise the potential for unexpected changes or gaps in leadership that may require external recruitment or executive search services. Even with succession planning, businesses understand the importance of being prepared to fill key leadership positions quickly and effectively to maintain continuity and drive organisational success.

While succession planning is critical for organisational resilience and leadership continuity, businesses also acknowledge the value of being flexible and responsive to potential recruitment needs within the C-Suite. By combining robust succession planning with strategic talent acquisition efforts, businesses can be well-prepared to navigate leadership transitions and sustain long-term success.

The 2024 Outlook

According to our survey, economic factors, including domestic discretionary spending, consumer sentiment, and the competitive landscape, will significantly shape discretionary retailers' top-line sales. To maintain profitability in this environment, organisations must implement major cost-of-doing-business (CODB) reductions and adapt their strategies to meet evolving consumer demands.

Internationally, factors such as fuel prices, production of goods, and shipping will continue to disrupt operations, necessitating business adaptability and flexibility. Businesses relying highly on international production may need to engage in risk reduction activities, with domestic suppliers becoming increasingly attractive alternatives.

As businesses navigate these challenges and opportunities, they need to prioritise talent and leadership development. While many organisations have robust succession planning processes, the potential for unexpected changes or gaps in leadership highlights the importance of being proactive and prepared to fill key executive roles quickly and effectively.

To ensure organisational success in 2024 and beyond, Odgers Berndtson is well-placed to support consumer and retail businesses with their executive talent requirements. With our expertise in executive search and leadership advisory services, we can assist businesses in identifying top-tier talent that aligns with their strategic objectives and cultural values. By partnering with Odgers Berndtson, organisations can access a global network of executive talent and invaluable insights to navigate the complexities of today's business landscape.

Get in touch. Follow the links below to discover more, or contact our dedicated leadership experts from your local Odgers Berndtson office to discuss your executive talent requirements.