1、Focus on customers,brand,and agility vital to retail success 2022 Canadian retail outlook01 2022 Canadian retail outlook It has been two years of uncertainty for Canadas retailers.In the first months of the pandemic,they shifted into crisis mode,making long-overdue investments in systems and process

2、es as quickly as possible to meet consumers rapid embrace of omnichannel shopping.Then,new and sometimes unexpected challenges arose.Snarled supply chains led to empty shelves,longer lead times,and higher shipping costs.Demand for talent led to higher labour costs.Inflationary pressures increased at

3、 a rate not seen in years.Even as we edge toward a sort of normalcy,these challenges persist.The difference is that retailers now have an opportunity to catch their breath and plan for the future more strategically.What will that future hold?To find out,Deloitte surveyed Canadian retail executives t

4、o gather their perspectives on the issues and trends that are likely to preoccupy the industry over the next 12months.*For this retail outlook,Deloitte surveyed Canadian retail executives in January 2022 at companies reporting between$300 million and$50 billion in annual global revenue.A range of su

5、bsectors were included in our survey,including big box,grocery,warehousing,and e-commerce;57%of companies surveyed were headquartered in Canada.We also spoke with Deloitte retail industry leaders who specialize in areas such as supply chain,technology,store operations,human capital,and ESG.022022 Ca

6、nadian retail outlook 5 key insights Retailers are optimistic about revenue growth but concerned about margin erosion Aggressively reining in costs and strategically investing in“no-regrets moves”will be crucial to ensure top-line growth does not come at the expense of profit.Supply chain complexiti

7、es will impact planned investment Retailers ability to meet customer fulfillment promises from same-day delivery to easy returnsis critical to being competitive.The difficulty will be in investing the right amount at the right speed,as the fluctuating demand of the past two years may not be a reliab

8、le guide for the future.Retailers should be meticulous in removing as many friction points as possible fromoperations.To fight for the best talent,know what you standfor Retailers expect the competition for qualified talent to intensify over the next year.To succeed in this labour market,retailers m

9、ust be employee-centric,developing workforce strategies that promote flexibility,support diversity,equity,and inclusion(DE&I),and make working in retail fun and rewarding.In other words,the workforce is as important as thecustomer.Consider ESG an organization-wide responsibility Organizations can no

10、 longer view environmental,social,and governance(ESG)work as the responsibility of any single individual or teamit must be embedded in a companys culture and everyday operations,with goals and progress communicated to employees,consumers,and potentially regulators.This is a significant transformatio

11、n in howsuccessful retailers willoperate.Retailers must focus on their brand andthe customer while remaining adaptable Throughout the pandemic,retailers have proven how adaptable they can be.Those that can continue to be agile as consumer demands evolve and technology advances are more likely tosucc

12、eed.Major Moderate investmentinvestmentMinimal No investmentinvestment03 2022 Canadian retail outlook Upbeat on revenue growth and concerned about profits Most retail executives surveyed(77%)expect revenue to rise in 2022 and almost all(93%)are confident in their organizations ability to hit its gro

13、wth targets.However,40%expect margins to fall in 2022 and 37%feel theyll remain stable.77%expect revenues to rise 93%are confident in their organizations ability to hit its growth targets Figure 1 Size of financial investment retailers are planning to make in various strategies in 2022 Expanding dig

14、ital capabilities Resetting physical stores for omnichannel Modernizing the supply chain Enhancing data privacy and security Tapping alternative higher-margin revenue streams Incorporating ESG practices Engaging in M&A(mergers and acquisitions)Making the workforce future-ready 04 2022 Canadian retai

15、l outlook Revenue expectations are comparable between the United States and Canada,thoughCanadian executives are slightly more conservative Worsening supply chains are top of respondents list of retailing risks(87%),followed by worker shortages and inflation(both 65%),government actions that reduce

16、retail store capacity(39%),and falling consumer demand(26%).Nearlyallrespondents(97%)say they plan to invest in expanding their digital capabilities to mitigate these risks;80%intend to enhance data privacy and security;and 77%plan to modernize their supplychain.Figure 2 Retail executives expectatio

17、ns for industry revenue growth in 2022 54%expect growth up to 5%32%expect growth of 5%or more Figure 3 Expectations for year-over-year operating margin Higher 30%Stable 38%Lower 30%Figure 4 Expectations about the 2022 consumer are consistent between the United States and Canada CanadaUS Active and o

18、utgoing,seeking experiences outside the home 80%84%Willing to spend but having to rely more on credit or buy now,pay later 63%64%Expecting seamless experience across channels 93%96%Pursuing retailers with strong ESG initiatives 67%68%US figures are from the 2022 retail industry outlook published by

19、Deloitte US.87%of retailers say worsening supply chains is a top retailingrisk05 2022 Canadian retail outlook 86%of retailers expect customers to prioritize stock availability over retailer loyalty 85%of retailers also expect to invest in supply chain automation,inventory management,and othertechnol

20、ogy Strengthening supply chains on the agenda Supply chains are integral to the customer experience,with most retailers(86%)expecting customers to prioritize stock availability over retailer loyalty.Top priorities include avoiding stock-outs(95%)and making their supply chain networks more agile(90%)

21、and resilient(90%).Many aim to achieve a more reliable flow of goods across suppliers and carriers(50%)and distribution/fulfillment networks(47%)while addressing rising supply chains costs(50%).Almost two-thirds(65%)plan to diversify their overseas supplier network and 10%intend to reduce their reli

22、ance on overseasvendors.Retailers also expect to invest in supply chain automation,inventory management,and other technology(85%),expanding distribution capacity and other infrastructure(75%),recruitment(55%),and process improvements(50%).The traditional supply chain,designed to optimize service lev

23、els,was disrupted by the COVID-19 pandemic.The challenge for retailers will be trying not to invest too much or too quickly,as the shifts in demand over the past two years might prove an unreliable guide for the future.Retailers can focus on building supply chain resilience by enhancing end-to-end v

24、isibility,adding buffers where possible,and building agility through higher levels of collaboration and information-sharing withpartners.06 2022 Canadian retail outlook Major investmentMinimal investmentModerate investmentNo investmentReady to fight for talent Nearly all respondents expect the compe

25、tition for qualified,skilled talent to intensify over the next 12 months,and 77%believe it will be tough to hold on to their best employees.Talent shortages are most likely to be felt in store operations,IT,and customerservice.To fight for talent,retailers must develop employee-centric strategies th

26、at make retail a fun and meaningful place to build a career.Many retailers plan to make talent investments across recruitment,improving workplace DE&I,and automating some tasks to enable staff to focus on higher-level work.They intend to offer better working conditions(73%),more attractive pay and b

27、enefits(67%),and better learning and development opportunities(43%).They also plan to engage younger Canadians to promote retail career opportunities(63%)and better explain career advancement options(40%)in recognition of the need to offer employees meaningful routes from the store floor to HQ.We be

28、lieve getting future talent investments right will depend on how retail leadership handles the make-or-breakdecisionsinvolved.Figure 5 Size of financial investment retailers are planning to make in workforce-related strategies in 2022 Diversity,equity,and inclusion Recruiting new people Technology t

29、o automate work Preparing for the future of work in our industry Improving employee retention Rearchitecting jobs to be more human-centered and engaging for the workforce07 2022 Canadian retail outlook 07ESG will matter more than ever Retail executives believe that ESG factors will matter more than

30、ever in 2022.Most(80%)believe governments and regulators will increase ESG-related mandatesand 63%feel employees are more likely to prefer working at retailers with clear ESG goals and initiatives.A majority of respondents(60%)think a companys ESG record will influence investors,but just 43%believe

31、ESG commitments will improve customer loyalty.This suggests retailers need to communicate their ESG progress more effectively and authenticallyan annual sustainability report cant do it alone.Neither can a single individual or team;ESG must go beyond the mandate of one department to become an integr

32、al part of a companys culture and everyday operations.Retailers should certainly have plenty to report on in the year to come,with planned investments in local communities,sustainable sourcing,and improving ethics,integrity,and compliance.Figure 6 Retailers planned investments in ESG Supporting the

33、community63%Ethics,integrity,and compliance53%Sustainable sourcing50%Embedding purpose into strategy and decision-making 50%Sustainable retail operations43%Decarbonization40%08 2022 Canadian retail outlook Figure 7 Most likely to occur in the next 10 years 70%Staff-free,cashier-less stores will be c

34、ommon 47%Retailers will increasingly engage consumers through digital goods sold in video games,the metaverse,and/or as non-fungible tokens(NFTs)40%Resale/second-hand goods market will grow significantly 30%Cryptocurrencies will be widely used by retailers and consumersalike 27%Retailers will use au

35、tonomous vehicles anddrones to transform customer/storedeliveries 23%Voice commerce(voice commands to find and purchase products online)will bewidelyadopted 23%Retailers will widely adopt blockchain(e.g.,for customer data,supply chaintransparency)13%Renting of consumer products will be widelyadopted

36、 3%Direct-to-consumer sales of 3D-printed products will impact retailsales Focus on customers,brand,and agility vital toretail success The pandemic has shown us that retailers can adapt quickly when needed and will invest in capabilities that were not on our radars just a few years ago.How retailers

37、 meet the demands of customers will continue to evolve as consumers preferences change and technology continues to advance.Retailers that stay true to their brand and what they stand for while remaining laser-focused on their customers,responsive to changing industry dynamics,and open to embracing n

38、ew ways of transacting digitally will bein the best position to succeed.09 2022 Canadian retail outlook Contact Marty Weintraub National Retail Leader martyweintraubdeloitte.ca Contributors Kelly Nolan Manager Retail Transformation Aly Pintea Senior Consultant Retail Transformation Hetal Pandya Part

39、ner Human Capital Joe Solly Partner Sustainability and Climate Change Leader Shai Verma Partner Enterprise Technology andPerformance Vinder Sodhi Partner Supply Chain Paul Beaumont Senior Advisor Retail Transformation Andrea Ng Director Retail Transformation James Park Director Retail Transformation

40、 Mike Alikhan Director Retail Transformation Shelize Jadavji Senior Manager Retail Transformation|This publication contains general information only and Deloitte is not,by means of this publication,rendering accounting,business,financial,investment,legal,tax,or other professional advice or services.

41、This publication is not a substitute for such professional advice or services,nor should it be used as a basis for any decision or action that may affect your business.Before making any decision or taking any action that may affect your business,you should consult a qualified professional advisor.De

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