MU Consumer Practice, in collaboration with IPSOS, has conducted a comprehensive study focused on the market and leadership challenges within the consumer goods, and retail sectors. The survey targeted organisations within these sectors, uncovering a mix of optimism and caution as they navigate current economic uncertainties.
Stockholm – June 4, 2024 – A new study by Ipsos, conducted on behalf of MU, reveals a prevailing optimism among executives in the consumer goods, and retail sectors, despite ongoing economic uncertainties. The study, which surveyed executives, highlights the dynamic landscape of these industries as they adapt to changing consumer behaviours and market conditions.
The study shows that leadership development is imperative for long-term success in these sectors. But worryingly, the perceived preparedness of the leadership team to take advantage of opportunities is seen as moderate (mean 6,2 on a scale from 1-10). The top 5 key competencies for shaping the leaders of tomorrow, and bringing future success are Communication, Vision, Strategy, Agility and Leadership.
The research identifies key opportunities driving growth, including product innovation (48%), diversification of product portfolio (38%), and a growing focus on sustainability practices (37%). However, executives also acknowledge significant challenges, such as price pressures (44%), geopolitical instability (42%), and the ongoing challenge of attracting and retaining top talent (40%).
"Despite these hurdles, businesses are responding with strategic initiatives, including investments in innovation, talent development, and exploring new markets", noted Alexander Zeh, Research Director at Ipsos. "A majority of respondents (75%) anticipate revenue growth in the coming year, indicating a cautiously optimistic outlook for the consumer and retail sectors."
The study also underscores the crucial role of leadership in navigating these complex times. Communication, Vision, Strategy, Agility, and strong Leadership are identified as the top competencies needed to drive future success.
Executives perceive that leadership effectiveness has improved in recent times, although they still desire further development to address all challenges. However, there is no clear idea of how to achieve this, and bridging this competency gap is vital for ensuring the long-term success of organisations within these sectors.
"Following a record response rate, we have seen that the outlook in the Retail and Consumer sector is extremely positive and optimism levels are far better than expected. At the same time, we found out that leaders don’t feel prepared to leverage certain opportunities. There's a clear need to further develop these competencies within their organisations to fully capitalise on emerging opportunities," added Brigitta Berger, Partner & MU Consumer Practice Leader
This study provides valuable insights for businesses seeking to thrive in the evolving consumer and retail landscape. By understanding the key challenges, opportunities, and leadership imperatives shaping these sectors, organisations can make informed decisions to drive sustainable growth in the years to come.
In the dynamic landscape of consumer goods, FMCG, and retail sectors, opportunities for growth and innovation thrive. Companies are proactively seeking to meet evolving consumer demands through product innovation. Additionally, expanding product lines and venturing into new markets are recognised as vital strategies for sustainable growth.
Organisations generally feel prepared to capitalise on opportunities, but there's a recognised need to enhance preparedness, especially at the leadership level.
Sustainability practices are gaining traction, driven by a growing emphasis on attracting eco-conscious consumers and meeting regulatory standards. These survey findings are strengthened by similar insights from MU’s ESG Practice. While 70% of leaders believe their company is ready for the sustainability transition, only 25% have had a strategy in place for over 3 years and 40% do not have a strategy in place at all.
Embracing technological advancements is also deemed essential for enhancing operational efficiency and customer engagement.
Yet, amid these opportunities, significant challenges loom. Rising costs put pressure on profit margins, while geopolitical uncertainties and trade disruptions add complexity. Talent retention remains a critical issue in the face of intensifying competition for skilled professionals.
To navigate these challenges and capitalise on growth opportunities, organisations are taking a wide variety of strategic initiatives. Heavy investments in innovation aim to keep them ahead of the curve, while robust talent strategies seek to attract and retain top performers. But the shortage of workers remains one of the top 3 challenges.
Optimism is present, with a majority of respondents anticipating revenue growth in the coming year. This positive outlook underscores the necessity for continued strategic investments and adaptations to thrive in a fiercely competitive market.
To mitigate potential risks, companies are implementing proactive measures such as cost reduction, innovative go-to-market strategies, and market diversification.
Moreover, the survey underscores a critical need to close the competency gap. The most relevant competencies are Communication, Leadership, Vision, Agility and Strategic Thinking – and there is a need for improvement especially in the last two mentioned.
Executives perceive that leadership effectiveness has improved in recent times, although they still desire further development to address all challenges. However, there is no clear idea of how to achieve this, and bridging this competency gap is vital for ensuring the long-term success of organisations within these sectors.
"Leadership matters at every level—from Leadership Teams to CEOs and Boards. Their effectiveness shapes organisational success and individual fulfilment at work. While the cost of failure is extraordinary, the opportunities unlocked by effective leadership are immense. Success demands context-specific leadership tailored to the unique needs of each organisation—it's never 'one size fits all.'" — Mieke Weijenberg, Global Practice Lead, MU Board & CEO Practice.
Here you can learn more about our Leadership Development service, and learn more about our Board & CEO Practice, and our ESG Practice.