Retail and consumer

60%

of consumer goods CEOs think emerging markets will drive more growth than developed ones

15th Annual Global CEO Survey

Retail and consumer industry insights

R&C CEOs are coping with sluggish demand in developed economies, increasing buying power in emerging markets and new expectations from digitally aware consumers. How are they driving growth with the industry changing radically?

Demand is weak in industrialised economies. Persistently high unemployment, the sovereign debt crisis in the Eurozone and the huge fiscal challenges that exist throughout the West are dragging down consumer spending. For both retail and consumer goods CEOs, that's cause for concern. Only 8% of retail CEOs and 14% of consumer goods CEOs think the global economy will improve in 2012. So it's not surprising they're less confident of growth this year.

Nearly half of retail and consumer goods CEOs expect the global economy to worsen

But buying power in the emerging markets is growing. The income disparity between the middle classes in the emerging and developed economies is rapidly shrinking. The ranks of the middle class in the emerging markets are simultaneously exploding, while in developed markets, the middle class is shrinking. Global consumer goods companies need the opportunities inherent in the emerging markets. That's why 60% say emerging markets are more important to growth prospects than developed markets.

60% of consumer goods CEOs expect more growth in emerging markets

And consumers everywhere are becoming more digitally empowered. In both the developed and emerging markets, consumers are more digitally savvy. Thanks to technology, today’s consumers have a tremendous amount of information at their fingertips; they can shop anytime, anywhere. Customer expectations and attitudes are changing dramatically, too. So it's not surprising that responding to customer demand tops the list of reasons why retail and consumer goods CEOs are changing their strategies.

Retail and consumer goods CEOs are changing course

Quotes

Luiza Helena Trajano Inácio Rodriguez

CEO, Magazine Luiza SA View profile

In a globalised world, even localised crises end up having an impact on all economies. The 2008 crisis taught us that.

Luiza Helena Trajano Inácio Rodriguez

CEO, Magazine Luiza SA View profile

Innovation is not just about technology. It means having different ways of providing good customer service, because delivering what the customer wants is your obligation. This means that surprising your customers by doing things differently from your competitors is what makes a difference. The same goes for customer service: it doesn’t matter how many processes you invent or how many written procedures you have in place, your relationship with the person you are serving is paramount.

Keith McLoughlin

President and CEO, AB Electrolux View profile

At the moment, the mature markets are slow-growing or in decline with respect to high ticket consumer durables. In North America, the housing collapse and high unemployment have combined to create one of the lowest levels of consumer confidence in decades – which means discretionary purchases get postponed. There are similar consumer constraints in Western Europe as a result of the banking crisis and sovereign debt issues.

Keith McLoughlin

President and CEO, AB Electrolux View profile

Companies with the best talent win. So the question is how do you attract, develop and retain the best talent? You have to adjust and make sure that your job offers are tailored to meet these new expectations.