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End-of-year review: Retail & Consumer Good

Our consultants working in this sector offer their take on a busy year

Head of Retail & Consumer Goods  


It’s been another eventful year in the retail and consumer goods industry. This time last year, I noted that spending habits had changed as people’s values began to be reflected more in their shopping. Companies then shifted their strategies accordingly. An emphasis on customer insights at the start of 2022 gave way to companies restructuring while improving partnerships and pricing strategies in Q3. So, what has changed since last year – and what do the coming 12 months hold?

Key points from 2023

It might be useful to start by considering some of the key things we’ve learned over the last year in the retail and consumer goods sector:

  • Value never goes out of fashion Aldi, Lidl, and Primark have captured many new customers who have switched due to the cost of living crisis. They like what they’re getting – meaning consumers who stopped shopping at traditional middle-class retailers like Marks & Spencer and Waitrose won’t necessarily rush back when the economic picture improves.

  • Value of e-commerce under scrutiny COVID encouraged unchecked growth in the e-commerce sector – but over two years on from the lifting of most pandemic restrictions, many retailers are now finding that focusing on e-commerce cannibalises their existing business. It is also usually lower margin, and for these reasons we’re seeing more and more companies questioning its value.

  • Department store model under pressure The rapid shifts of the past few years have not been kind to department stores, who continue to report losses and closures. John Lewis, House of Fraser...who will be next?

  • Hospitality and leisure wins out over shopping Consumers’ post-pandemic habit of prioritising spending on experiences, rather than retail, has not gone away. Still, this can’t go on indefinitely – COVID savings have to run out at some point.


Looking ahead

Recent news about inflation going down is positive – but I’ll be particularly interested to see how Christmas goes. Last year, consumers said they were going to spend less during the festive season, but that didn’t actually happen, so a similar scenario may well transpire this year. Many companies will be looking at how to hold onto their existing client base – while hopefully adding some new customers – in the leadup to Christmas, and then reassessing in January.


I hate to say it, but things are likely to get harder over the next six months. Still, it’s not all doom and gloom; there are some interesting trends to watch out for on the horizon, as well as opportunities coming through that look optimistic.


Talent trends

For me, the key areas to watch for talent in the retail and consumer goods industry next year will be roles connected to ESG and loyalty respectively. Net zero is becoming real for many retailers, especially as more and more customers try to be environmentally conscious with their shopping. However, there’s a struggle to fund the transition, as store estates are very expensive to retrofit. Separately, loyalty will become even more important to retailers. You can expect them to look into this area more closely – see Tom’s notes below for more on that – especially as they look to wean customers off discounts and promotions. Instead, you can expect retailers to focus on rewards for their most loyal customers instead of supplying blanket reductions for all.


For clients, I’d reiterate something I mentioned in a recent piece: be willing to take a punt on candidates who might not be the finished article but tick most of the boxes. It’s a better bet than wasting time for the ‘perfect’ person to come along! I’d recommend making hires strategically in the areas that you’re looking to strengthen. As Tom notes below, if you’re looking to recruit someone in either the data and/or AI spaces, you might well pick up a bargain. 


Senior Consultant, Interim & Consulting

What have we seen in 2023?

As Mark has mentioned, inflationary pressure is causing a big strain on customer loyalty as shoppers seek out better prices. We’re seeing consumers looking for the same value proposition without additional costs – which is complicated when 50% of European retailers have seen a rise in costs. The increased price of goods, as well as operational costs, put more and more pressure on retailers’ margins.


Given the competitive landscape, customer experience is more important than ever – both on and offline. Retailers are keen for e-commerce to be frictionless. It’s worth noting that generative AI and machine learning tools are being explored to improve customer experience and operational efficiency. This is far from being the finished article, however: businesses need to ensure processes and current technologies are robust before incorporating such sophisticated technology into their systems.


What have we seen for candidates and clients?

As for interim talent in retail and consumer goods, I would say that with the sector under pressure to perform amid increasing costs and competition, it is more important than ever for businesses to bring in candidates who can operate at pace and possess strong communication and soft skills. The latter point is crucial, with clients placing increasing importance on finding a cultural fit – even for interim candidates. It seems to me that businesses want interim resources to feel like as much of an investment in a team as permanent hires.


I’d advise interim talent to think about how best to focus on delivery; these days, clients want execution-focused resources from candidates who can not only provide solutions but also offer support with the implementation.

Senior Consultant, Digital & Technology


Tech trends in retail and consumer goods

For what concerns tech talent in the retail and consumer goods space, I’d say that the more noticeable trends have been around ‘hands-on’ work. That is, we’ve seen more hires for roles like engineers and data architects than, say, e-commerce or leadership. Why? Because given the challenging economic climate, organisations have been reluctant to hire leaders. Instead, they need people to come in and get things done – like boosting security or moving systems to the cloud – rather than doing a big revamp.


E-commerce giving way to omnichannel

Mark mentioned that many businesses are examining their approach to e-commerce. Where companies have overhauled their e-commerce offerings, this probably happened during COVID; the focus is now more likely to be on omnichannel delivery. We’ve seen examples like Asos and Avon opening their first spaces in the UK, as well as increased in-store presence from the likes of Sephora. It’s a noticeable pattern, seeing retailers that mostly operated online expanding into brick-and-mortar stores. The experience they’re offering customers is being brought to the fore.


AI and machine learning – watch this space

As my colleagues have mentioned, AI is a big talking point – though it’s too early to say definitively just how seriously retailers are examining this. Unilever, for one, have very recently opened an AI innovation lab, though time will tell if this will become a mainstream trend.


One thing AI and machine learning will most likely influence even more is customer profiling; the technology is perfect for synthesising data about spending habits and generating relevant targeting models. This makes it easier to predict and influence what customers will want by curating their shopping experience; retailers are starting to explore this in earnest. It’s the next step in an evolution that began in the early days of loyalty schemes like the Tesco Clubcard; retailers have seen what their customers buy, but many don’t have the infrastructure or talent to really harness the information.


For such structures to work, the data flow needs to be very robust – that is, where your data is kept and how it is organised. Proprietary AI is only as good as the data you feed it, so companies looking to capitalise on this would be well advised to make some strategic hires now before demand increases in earnest.


Do you need help sourcing talent in the retail and consumer goods space? Please get in touch – we’d love to help!


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