The short-term outlook for the U.S. retail sector may be positive, but the industry requires a heightened level of investment in digital capabilities to remain competitive, according to a KPMG report.
The recent U.S. CEO Outlook report showed that 95% of industry CEOs expect favorable businesses in the next three years while investing in physical and digital infrastructure will be crucial for two-thirds of executives.
In the following years, existing retailers should prepare for possible business disruption from start-up companies and technological innovation, according to the study.
For this reason, executives have decided to invest in artificial intelligence, machine learning and the Internet of Things to keep up with changing trends. At the same time, data mining and cybersecurity are among their top priorities.
The KPMG research’s findings somehow aligned with the results of a separate report. Aside from strengthening digital capabilities, businesses need to improve their retail management training courses for employees. This is especially important amid the approaching holiday season in 2017.
KPMG principal Matthew Hamory believes that the retail industry’s efforts to innovate are still not quick enough. “Expansion and scaling the supply chain” may have been viable in the last 30 years, but clearly that strategy is no longer effective, Hamory said.
Retailers should focus on how to leverage customer data and improve skills in customer relation management. These will allow them to keep up with start-up firms that have flaunted customer-focused brands.
On the other hand, the changing market trends lead larger companies to buy out start-up companies instead of building new infrastructure to rule out any problems on competition, KPMG managing director Mark Belford said.
While business may be good for U.S. retailers in the coming years, there is no doubt that the industry should start resolving their weaknesses in the digital forefront to keep up with fast-rising companies.