Retailers are growing again, a new study shows, as companies start to embrace strategies like e-commerce and international initiatives.
The new retail CEO study, conducted by PwC Canada Retail Consulting Services, was released Monday. It surveyed 21 CEOs from retail chains in the United States and Canada in the specialty and department store sectors.
The study found, among other things, that optimization across independent platforms had led to growth, said Antony Karabus, PwC Canada retail consulting services leader, in a phone interview with the International Business Times.
What was surprising was the clarity of thought of so many retailers I interviewed, Karabus said. They were very clear on their growth strategy initiatives.
I found this interesting, after they spent all this time surviving. Now, they're putting a tremendous amount of work in to grow the business. And I was surprised how many people have clear growth strategies.
First and foremost in those growth strategies is the implementation of e-commerce as a sector in their businesses. E-commerce still represents a modest portion of overall sales, but it's growing as much as 10 or 20 times faster than traditional, store-based brick-and-mortar sectors, Karabus said.
It's a trend that is likely to continue. Forty-seven percent of retailers believe e-commerce will account for as much as 10 percent of sales in the next five years, according to the study. Ninety percent of CEOs interviewed said they would increase their use of e-commerce.
Most retailers put Web sites in two or three years ago because everyone was doing it, Karabus said. It was more reactive. Now, they're being more proactive.
One way in which retailers have not been as proactive is in the international market. Fifty-two percent of retailers in the survey had no presence on the international market. However, 24 percent of retailers expect a large shift - they think more than 15 percent of sales will come from the international market.
Among retailers expanding internationally, there was a shift towards franchise or licensee models rather than employing their own capital internationally, Karabus said.
One thing every CEO interviewed agreed on was the concept of integration across many channels and platforms, emphasizing the independence of those channels - e-commerce, brick-and-mortar, mobile commerce and social media.
Karabus said CEOs stressed optimizing across channels, and optimizing each channel independently to globally increase business.
Karabus said one of the CEOs he interviewed - he would not specify because he promised each CEO anonymity during the study - said she had about 75 percent of merchandise available in any channel. It's something that probably wouldn't have happened even a few years ago.
When you think back about five or 10 years ago, there were two channels: brick and mortar, and catalog, Karabus said. In just a few years, retailers have new channels, and have optimized each channel independently of each other.
Some other key findings in the study:
- 76 percent of CEOs said they would likely introduce new stores or store concepts and/or undergo extensive store renovations.
- 70 percent said they will increase their use of private-label programs or exclusive collections.
- 62 percent said they will up their use of social networks.
- 57 percent said penetration of international markets would rise, either directly or through license or franchise partners.