The retail industry is one of the most important sectors of the economy, accounting for more than $3 trillion in annual sales in the United States alone. It employs more than 18 million people and is a key driver of consumer spending. Yet there are also significant problems for the retail sector. Several significant retailers have struggled in recent years to adapt to the retail industry's shifting environment. Brick-and-mortar retailers have suffered as a result of the rise of e-commerce, which has resulted in decreased in physical stores and a high employee turnover rate.
As a result, many retailers are struggling to find new CEOs who can navigate these challenges and lead them into the future. However, there is hope, as many retailers are taking steps to adapt to the changing retail landscape and are actively recruiting new executives with the skills and competencies to successfully take their business into the digital era.
History of Big Retail
Retail was forever changed in 1962 when Walmart opened its first store in Arkansas. A new era of big-box retailers with a focus on low pricing, a wide assortment, and consumer convenience was ushered in by Walmart. Other big-box stores like Target, Kmart, and Sears quickly followed Walmart. With their assistance, the retail sector underwent a revolution, leading to lower pricing and greater consumer choice. In the decades that followed, Walmart, expanded quickly and became both a global icon and the biggest retailer in North America.
However, the retail industry began to shift in the late 1990s and early 2000s with the rise of e-commerce. Amazon, founded in 1994, quickly became the leader in online retail. In the same period, Walmart and other large retailers began to struggle to keep up with the changing landscape.
How E-Commerce Changed Retail
The retail sector has undergone quick and profound change because to the internet. E-commerce has exploded in popularity in recent years, with US internet sales exceeding $514 billion in 2018. Amazon, who has emerged as the unchallenged leader in online retail. Amazon now controls more than 40% of the US e-commerce market, and its growth shows no sign of slowing down. However, this rapid growth of online retail has had serious repercussions for traditional brick-and-mortar retailers.
With the ease and convenience of online shopping, many consumers are opting to purchase their goods from the comfort of their own homes. As a result, physical store sales have been steadily declining, forcing many traditional merchants to close or consolidate their locations.
High Turn-Over and Low Morale
Further issues have emerged for the retail sector as a result of the reduction of physical storefronts. The high employee turnover rate is one of the most visible problems in the retail industry. Since working in retail is a notoriously problematic and a challenging career for employees who have worked on the floors of big retailers, many people see retail as a temporary career and are eager to find work in other fields. In the retail sector, this has had a significant negative impact with companies find it challenging to build a strong team culture and deliver reliable customer service when there is so much employee turnover. Low pay and a lack of benefits for retail workers are further problems from the store floor up to management positions.
What Is Causing Retail CEO shortage
The decline of brick-and-mortar stores has had a further consequence for big retail, and that is a shortage of qualified CEOs. Finding a new leader who can address the changing environment and develop a winning future strategy has become increasingly difficult for many big retailers. The main reason for this shortage is the complexity of the retail industry. Large retailers like Walmart and Target are highly complex businesses with a wide range of stakeholders and interests. This makes it difficult for a traditional executive to create an effective strategy. At the same time, there is an increasing demand for digital and data-driven leadership. Traditional retail executives may lack the technical skills to drive digital transformation within their businesses.
Executives from conventional retail companies might not have the necessary technical expertise to lead their companies' digital transition. Due to this, there is a scarcity of qualified executives who can guide big retailers into the future.
The Future of Big Retail
In spite of the current challenges, there is reason to be optimistic about the future of big retail. Many large retailers are beginning to take the necessary steps towards digital transformation by investing in new technologies and business models, to make the transition to the digital age.
For example,“Walmart+” membership program provides subscribers with free same-day delivery for select items. Drive Up Returns is the newest way Target is improving upon their convenient and painless return policy.
These type of digital transformations are essential for retailers to stay competitive in the digital age. At the same time, several major retailers are aggressively seeking out new executives who can give their organisations a contemporary viewpoint. This is essential for these retailers to remain competitive in the future.
