Consumer goods and retail CEOs' survey key findings | KPMG | AU
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Consumer goods and retail CEOs' survey key findings

Consumer goods and retail CEOs' survey key findings

KPMG’s 2016 Global CEO Outlook survey reveals optimism tempered by concerns about customer loyalty and the global economy.


National Sector Leader, Consumer & Retail

KPMG Australia


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Shopping bags

Consumer goods and retail industry leaders are navigating a bewildering array of daunting challenges including digital technology’s disruptive impact on business models, shifting consumer loyalty, looming talent shortages, bold new competitors, and volatile economic conditions.

While concerns about managing critical change in the digital age are real, however, so is their resolute optimism regarding growth prospects for the industry, according to KPMG’s 2016 Global CEO Outlook, which includes the insights of 185 consumer goods and retail CEOs.

Optimistic outlook


Three quarters of the consumer industry CEOs surveyed expressed confidence about industry growth over the next 12 months, with 43 percent saying they were confident, and 32 percent very confident. On growth prospects for their own organisations in the coming year, they were even more optimistic, with 83 per cent expressing confidence—46 percent saying they were confident and 37 percent saying very confident.

That expectant outlook remains consistent for the next three years as well. A total of 84 percent expressed confidence about longer term industry growth, with 45 percent confident and 39 percent very confident. As for growth for their respective companies over the next three years, again they were slightly more optimistic, with 38 percent saying they were confident and 48 percent saying very confident.

In this era of growth, CEOs are not underestimating the impact that technology and a reshaped retail marketplace will have for their industry. Seventy-six percent agreed that the next three years will be more critical for their industry than the previous 50 years. In fact 71 percent of the CEOs said innovation is among the top three issues on their personal agenda, and 18 percent said it is number one.

“These are the most challenging times for leaders in an industry that’s undergoing revolutionary change. In response, consumer goods and retail CEOs are prioritising technology and customer focus to drive growth and loyalty,” said Willy Kruh, Global Chair for Consumer Markets, KPMG International. “Innovation is a leading priority for CEOs who want to differentiate and stay ahead of the competition.”

Growth barriers

Which factors will inhibit growth over the next three years? For 17 percent of the CEOs, increased competition from new competitors or disruptors was the number one expected impediment, followed by current competitors, global economic factors and/or domestic economic factors, each cited by 12 percent, and access to talent, cited by 10 percent.

Digitisation and customer focus are top strategic priorities

In light of the opportunities and challenges ahead, we asked the CEOs what their top 3 strategic priorities would be for the next 3 year. Digital transformation, a focus on customers and geographic expansion were at the top of the list, each cited by about 1 in 5 executives.

This was consistent with the findings of another recent KPMG survey of consumer goods and retail executives , which also revealed that consumer industry executives are focused on becoming more digitised and customer-centric global organisations.

The global economy and customer loyalty are top concerns

As for what is keeping CEOs awake at night, the global economy and customer loyalty were ranked as the top two concerns for CEOs (90 percent and 89 percent respectively).

Other top concerns included: staying on top of what’s next in services/products (87 percent), the impact of Millennials (86 percent), potential loss of market share to competitors (84 percent) and regulations inhibiting growth (84 percent).

Cyber-crime as a top risk

When asked which business risks caused them the most concern, CEOs ranked regulatory risk (31 percent), third-party risk (29 percent), geopolitical risk (28 percent) and cyber security risk (26 percent) as the top four from a list of 14. Interestingly, although cyber risk was cited as one of the top risks—which is not surprising given the potential damage a cyber hack or other cyber crime can cause—only 22 percent of the CEOs said they were fully prepared for a cyber event.

Future outlook

With the disruptive impact of technologies such as cloud computing, the internet of things and advanced robotics dramatically reshaping the industry, CEOs were asked what their organisations might look like in three years. While 58 percent expect to be largely the same company as they are today, 42 percent expect to be transformed into a significantly different entity.

Other highlights of the survey include:

  • Automation: Thirty-seven percent said it’s likely and 11 percent said it’s extremely likely that machine learning and automation will replace 5 percent of their sales force within the next three years, while 30 percent said they will turn to automation to help manage future skills gaps.
  • Growth: A majority of CEOs (58 percent) anticipate top line growth per annum over the next three years of between 2 and 5 percent. 25 percent anticipate weaker growth of 0 to 2 percent, 12 percent anticipate annual growth of between 5 and 10 percent, and 3 percent expect annual growth of 10 percent or higher.
  • Data quality: Concerns about the quality of the data upon which business decisions are being based were cited by a total of 83 percent of CEOs, and 28 percent said increasing data analysis capabilities is a top three investment priority for the next three years.
  • Data & Analytics: On using D&A to improve performance, 68 percent said they are using D&A fairly effectively. Fewer than one in four (22 percent) considered their company a leader in using D&A to understand customer behaviour, while 8 percent are still evaluating their usage of D&A.
  • Headcount: Over the next 12 months, 49 percent expect headcount to grow by less than 5 percent, while 18 percent expect similar growth over the next three years. Eighteen percent expect headcount to rise by 6 to 10 percent, and 56 percent anticipate the same increase over three years.

Read further insights from our Global CEO Outlook 2016.

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