The role of the CEO has long been focused on growing the business. While that remains a high priority, the number one focus for CEOs in 2015 is the urgent need to retool the business in response to the requirements of omni-channel commerce and fulfillment. That was one of the interesting shifts uncovered by the latest annual CEO survey conducted by PwC on behalf of JDA Software – Global Retail & Consumer Goods CEO Survey: The Omni-Channel Fulfillment Imperative.
In last year’s edition of this study, the top three priorities all centered on expansion, either through entering new regions and markets or through adding more stores. While expansion into new regions and markets remains the top long-term focus in this year’s study (66 percent), the number one priority for CEOs in 2015 is to reduce or reformat physical store formats to focus on expanding their ecommerce business. And improving their omni-channel fulfillment capabilities became CEOs second most important priority overall (59 percent).
The CEO survey received responses from 410 retail and consumer goods companies across Australia, China, France, Germany, Japan, Mexico, the United Kingdom, and the United States. It is interesting to note that priorities varied by country, with Australia, Germany, Japan, Mexico and USA having expansion to new regions and markets being their top priority overall while improving omni-channel fulfillment capabilities was the top priority for China and UK. France was an outlier by listing adding new stores as their top priority even though this was the lowest priority for the eight nations overall.
The reason behind the shift in priority toward omni-channel concerns is evident when you examine the main external and internal threats CEOs listed. The external threat chosen as most likely to occur (66 percent), and which CEOs said would have the greatest impact on their business (40 percent), was having online and traditional retail giants offering widespread same-day or next-day deliveries. Again, the responses in this area varied by country, with this concern highest in China and USA while for Australia, Japan, Mexico and UK the top threat was exchange rate volatility. China’s top threat was volatile energy and raw materials costs.
Turning to internal challenges, there is no lack of concerns for CEOs to address, with all key challenges coming within a few percentage points of each other. Emblematic of this even distribution of internal challenges, among the eight nations surveyed, there were five different top challenges chosen. Most of the top challenges can be attributed to the rise in importance of omni-channel shopping, with failing to meet customer expectations across all channels rated as the most likely to impact organizations to a great extent.
Reflecting the shift in perceived threats and challenges toward omni-channel issues uncovered in the survey, the priorities CEOs have for 2015 are also shifting toward responding to omni-channel requirements. The top priority (57 percent) is spending capital on creating new customer experiences, closely followed (56 percent) by using stores as fulfillment centers for faster delivery of online purchases. Also, the top long-term priority is offering customers more options for order fulfillment.
Thus, the CEO survey results for 2015 show that CEOs are very focused on improving their omni-channel capabilities for customers, and in particular, omni-channel fulfillment. In fact, 25 percent of the CEOs say they will oversee this function themselves. I think it is safe to say that with this kind of attention, omni-channel customer experiences will improve significantly this year.
To read the full report, click here.
To hear my more in-depth discussion of the CEO survey results with Bruce Rogers, Chief Insights Officer for Forbes Media, register for the Forbes-JDA webinar on May 14, 2015.