Our latest global CEO Survey examined the dual imperative facing corporate leaders: how to reinvent their business for tomorrow while simultaneously addressing near-term threats. We explored this through a series of questions grouped into three themes: the race for the future, managing today’s tensions and forming a balanced agenda that delivers on near- and long-term priorities.
Respondents to our survey included retail and consumer goods CEOs from Canada and around the world. Their answers painted a picture of an industry buoyed by optimism after navigating significant volatility in recent years. They also revealed several opportunities and challenges that, if successfully addressed, can help make their positive outlook a reality.
1. The race for the future
Many CEOs see the potential for disruption on the horizon. Even after adapting to a global pandemic, supply chain snarls and a customer base that’s grappling with the rising cost of living, consumer markets CEOs recognize further action is needed to prepare their business to meet tomorrow’s challenges.
15% of Canadian consumer markets CEOs (versus 34% globally) don’t believe their business will be viable after 10 years if it continues on its current path.
More than half (54%) of Canadian consumer markets CEOs (59% globally) said changing customer demands and preferences—a topic we explored in depth in our latest Consumer Insights Pulse Survey report—will affect the industry’s profitability to a large or very large extent over the next decade.
Only 13% of Canadian consumer markets CEOs (19% globally) say they’re highly or extremely exposed to cyber threats over the next 12 months. But that feeling of exposure rises to 23% both within Canada and globally over a longer five-year outlook. This disconnect in time horizons raises the question of whether CEOs risk being blindsided by cyber threats as they focus on more immediate risks—especially if they inadvertently introduce new cyber vulnerabilities as they make important business technology investments.
2. Today’s tensions
The state of the Canadian and global economy is among the biggest immediate challenges facing consumer markets CEOs. As we saw in our Consumer Insights pulse survey, fears of a recession are already causing many shoppers to cut back on non-essential purchases. But retail and consumer goods CEOs have become accustomed to managing complex challenges—even though their survey responses suggest they’ll need to accelerate those efforts to achieve their growth expectations.
69% of Canadian consumer markets CEOs believe Canadian economic growth will decline over the next year. Among their global peers, 57% believe economic growth will decline in their own country.
Despite this negative macroeconomic outlook, 54% of Canadian consumer markets CEOs (40% globally) are extremely or very confident in their own company’s revenue growth prospects over the next 12 months. That rises to 69% (52% globally) over the next three years.
Many Canadian consumer markets CEOs are slower off the mark than their global counterparts in taking steps to mitigate against potential economic challenges and volatility in the next 12 months. Less than half (46%) have reduced their operating costs, compared to 64% globally. We also see consumer markets CEOs walking a fine line between reducing labour costs and making sure they have the employees they need to grow their business. While 10% of Canadian consumer markets CEOs (17% globally) have started to reduce their workforce, 56% (60% globally) have no plans to do so.
3. A balanced agenda
To manage their dual imperative, CEOs must start with their own calendar and how their time is divided between different priorities. This balancing act extends into how corporate resources are allocated into various initiatives—and making sure your people can successfully execute.
Canadian consumer markets CEOs spend 29% (26% globally) of their time driving current operating performance. Like their global peers, they’d like that to decline to 20%—freeing up more time to spend on evolving the business.
Canadian consumer markets CEOs’ top investment priority over the next year is automating processes and systems (cited by 82% of Canadian respondents and 80% globally). That’s followed by deploying cloud, artificial intelligence and other advanced technologies (cited by 77% of Canadian consumer markets CEOs and 65% globally) and upskilling the company’s workforce in priority areas (64% in Canada and 70% globally).
The overwhelming majority of Canadian consumer markets CEOs have cultivated a shared vision with their employees, with 92% (86% globally) saying the behaviours of staff are aligned with their company’s values and direction. But there are signs that the conditions aren’t in place for managers to pursue new business opportunities or respond to threats on their own. Only 5%—notably lower than the global average of 23%—say leaders in their company make strategic decisions for their function or division without consulting the CEO.
Takeaways for Canadian retail and consumer goods CEOs
We see Canadian CEOs wrestling with key questions about what it takes to succeed in our dual-imperative world, even if they don’t always explicitly recognize it. Pinpointing the biggest possibilities—and vulnerabilities—can help CEOs stay ahead of short-term threats while making long-term investments needed to remain relevant with consumers.
Our survey results revealed several important opportunities for Canadian retail and consumer goods CEOs to find this balance by making their companies more agile, streamlined and flexible:
Invest in data to build privileged insights. Retailers already understand the value of their firsthand access to customer data. And many consumer goods companies are similarly developing a deeper understanding of their customers as they pursue direct sales models. But, as PwC authors argued in their 2022 book, Beyond Digital, having good customer insights isn’t enough. Retail and consumer goods companies need to continuously invest in gaining privileged insights to build and maintain their competitive differentiation.
This includes earning consumers’ trust by communicating the value you’re creating as well as how you’re treating their data and using your insights. It also involves enhancing your mechanisms for gaining customer insights and asking critical questions to evaluate your capabilities. For example, how are you measuring the success of your loyalty program? And how effective are your one-on-one direct-marketing campaigns?
Redesign your organization to reduce costs. Leading retailers and consumer goods companies are finding efficiencies and reducing their cost structure by adopting automation and artificial intelligence, particularly in their distribution, merchandise and assortment systems. These technologies also help companies manage natural employee attrition in a tight labour market.
We’ve seen top-performing companies use periods of slow economic growth to make strategic investments that position their organizations for future growth. Companies that implement automation and artificial intelligence to remove friction from the consumer experience and address staffing shortages can take advantage of rising demand when economic growth accelerates.
Retain and upskill tomorrow’s leaders. Positive employee experiences lead to positive customer experiences. And we’re seeing retail and consumer goods companies explore new ways of engaging frontline employees. Directed task management and gamification techniques improve staff productivity, remove friction through automation and help bring new employees up to speed quickly.
As your employees grow to become leaders within your company, they’ll need to be ready to make business decisions amid growing uncertainty and risk. And your existing leadership team will need skills and competencies different from the ones that helped them reach their current role. Reimagining how you develop your current and future leaders can build an organizational culture that helps employees advance their company’s business strategy.
A human-led, tech-powered future for retail and consumer goods companies
We believe that consumer goods CEOs who transform their operations and reimagine their workforce strategy can navigate a slowing economic environment while meeting consumers’ rising expectations.
Combining human insights and powerful technology can help reduce costs and enhance the customer experience—helping companies compete today while creating a sustained competitive advantage.
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