New research has found that after a tough start to the year, 86% of retailers are feeling positive about the rest of 2024 – with over a third (36%) describing their outlook as very positive.
The survey of more than 100 retail professionals, conducted by Fluent Commerce, revealed growth is on the horizon for retailers. 93% said they expect to grow their business within the next year, with two fifths (39%) forecasting significant growth. Just 1% of respondents anticipate making a loss in 2024.
This is despite many retailers facing a disappointing start to the year as the aftershocks of the Covid-19 pandemic continue to impact consumer spending. Despite high inflation easing, recent ONS figures have shown stagnant Q1 sales, casting a shadow of doubt on the industry’s resurgence. When asked about the biggest challenges facing their business today, over half (54%) of respondents said the cost of living crisis.
“As economic pressures have continued to bite, consumers have had to think twice about discretionary spending. As a result, the focus for retailers to date, has been on managing costs and driving operational efficiency,” explained Rob Shaw, SVP and GM EMEA at Fluent Commerce. “It’s fantastic that we’re finally seeing a shift towards growth as we look set to embark on retail’s long-awaited revival.”
The survey did underline the fact that issues like supply chain disruption have become a real headache for retailers over the last few months. It found that recent disruptions such as the attacks in the Red Sea by Houthi rebels have impacted three quarters of retailers, with 7% of respondents labelling these disruptions as ‘severe’.
When asked about the biggest concerns stemming from these disruptions, nearly half (47%) of retailers said having large amounts of stock unavailable online. 45% were concerned about limited stock driving people away from bricks and mortar stores and 43% said if seasonal stock didn’t arrive in time it would result in bigger markdowns.
However, these challenges have offered an opportunity to boost supply chain resilience. In response to these complications, 38% of retailers have looked to make their supply chain more resilient, with one fifth already implementing changes.
To do so, 44% retailers looked at diversifying their suppliers and 39% looked into sourcing goods from local suppliers. 15% said they hadn’t yet looked into different sourcing or fulfilment options but might do so if disruptions continue.
According to the survey, another key pressure facing today’s retailers is keeping up with new technologies – with 42% of respondents naming this as a key challenge. Diving into their specific technology pain points, retailers are most concerned about delivering a seamless omnichannel experience (48%) and implementing new technologies like AI (45%). A quarter of respondents also admitted that they lack real-time inventory visibility.
“Retailers are under increasing pressure to adopt new technologies quickly and roll out applications faster,” Shaw said. “Used correctly, not only does technology help businesses to predict and react to changing conditions, it often can assist in providing a competitive advantage.”
When asked about their leading strategic priorities for the next five years, investing in new technologies was the top priority for two thirds (70%) of respondents. Other priorities were investment in product innovation (44%), sustainability initiatives (40%) and expansion into new markets (30%).
