Businesses that are fit for the future are excelling beyond their rivals. They thrive by achieving goals such as business growth, faster innovation, and improved sustainability. Their strategic foresight and agility have allowed them to succeed amid uncertainty. 

Here are some highlights from our Future Fit data, which show how organisations that effectively integrate sustainability into their operations and projects are better positioned to thrive in the evolving retail, wholesale and leisure landscape. 

• Champion organisational change: Leaders must drive change with accountability and transparency, ensuring employees and the market are aware of actions and intentions.
• Harness the power of partnerships: Collaborating within the broader ecosystem could help future-proof businesses and foster a resilient market environment.
• Act without delay: Staying abreast of changing consumer behaviours is crucial to avoid falling behind in a competitive landscape.

Consumer-facing businesses in the retail, wholesale and leisure sector have faced significant challenges due to the Covid-19 pandemic and subsequent cost-of-living crisis. However, our research indicates that with strategic planning and proactive measures, businesses could capitalise on growing consumer confidence.

Our research delves into various growth drivers, including digital transformation, supply chain collaboration, recruitment and retention, and sustainability investment. To stay competitive, retail, wholesale and leisure businesses must adopt these forward-thinking practices.

• Identify the low-hanging fruit: Look for sustainability improvements that deliver savings or drive revenue growth.
• Embrace collaboration: Work with industry partners on sustainability initiatives that drive mutual benefit.
•  Avoid greenwashing: The backlash for consumer-facing businesses making unfounded claims about sustainability could be considerable.

The importance of sustainability is clear, with 78% of businesses recognising it as a competitive advantage. Environmental, social, and governance (ESG) issues are becoming central to business strategies, with 73% of leaders anticipating that sustainability will remain a significant focus.

Businesses must now translate their sustainability commitments into measurable actions. While 53% have the capabilities to monitor environmental performance and 58% have reduced energy consumption, fewer have adopted practices such as generating their own energy.

The challenges of recent years may have made it more difficult for the sector to take positive steps on sustainability, David reflects. And these businesses have faced less regulation on ESG issues than their peers in other industries. Still, David warns, the dangers of not acting are real. “Consumers look for change and they are prepared to punish less sustainable businesses. Employees also increasingly want to work for greener companies.”

Identifying areas where sustainability aligns with financial goals is now essential. For instance, improved energy efficiency reduces costs and carbon emissions, while greener products could attract more consumers.

• Experiment with new technologies, including artificial intelligence (AI), to secure first-mover advantage.
• Identify partners and ecosystems to innovate collaboratively, improve risk-sharing, and reduce the cost of upfront investment.
• Use data to understand consumer preferences and behaviours, personalising the customer relationship to an ever more granular level.

The pandemic forced many consumer-facing businesses to adopt new digital sales channels. Now, 68% of businesses explore new business models and 69% embrace a 'fail-fast' approach to innovation.

Businesses in the sector also focus on the power of the data their activities generate. “There is so much data available that helps these businesses to understand the market and their individual customers,” David says. “That drives far more informed decision-making, with a much more rapid response to changing consumer demands.”

With 60% already using data-driven decision-making and 64% implementing new data science capabilities, the sector is poised for further digital advancements. Leaders must now focus on change management and AI integration, with 39% and 35% respectively already making strides in these areas.

• Reframe the buyer-supplier relationship by focusing on mutual interests and collaborate with greater transparency.
• Leverage sustainability goals such as Scope 3 emissions to foster deeper cooperation along the supply chain.
• Implement traceability and monitor ESG performance to ensure robust supply networks.

Supply chain disruption has been a recurring theme for consumer-facing businesses in recent years, undermining the case for complex, globalised supply chains focused on cut-price procurement. More than three-quarters of retail, wholesale and leisure businesses (79%) now say they value supply chain resilience over cost and speed and 82% look to work with more local suppliers.

Leading businesses in the sector are focused on the benefits of collaboration across their entire value chain – 50% regularly collaborate with key suppliers or always include them in strategic decision-making and 32% say the same of their customers.

“There is a huge change taking place, with a much more honest and candid relationship between businesses in the sector and their suppliers,” says David. “Without having that conversation, it’s very difficult to be confident in the stability and security of your network.”

• Map the skills that the business needs over the medium to long term, then work backwards to develop a plan to secure them.
• Analyse what potential employees of all ages and backgrounds are looking for from the business and build a compelling employee value proposition that reflects this.
• Collaborate to promote the sector as an exciting and rewarding place to build a career.

Many retail, wholesale and leisure businesses face significant skills shortages and talent gaps. A small minority attempt to address this issue by thinking more strategically about their future workforce – 16%, for example, have mapped their long-term skills needs and partnered with outside organisations to resolve them – but others have some catching up to do.

The reality, David says, is that businesses need to work together to change perceptions about careers in the sector. “There are good long-term opportunities in this industry, but people often think of these jobs as temporary or part-time roles,” he says.

Engaging with educational institutions could expand the talent pipeline. David also points to employee share ownership plans as a valuable tool for building enduring relationships.

Many in the sector are realistic about their inability to pay salaries competitive with other industries. Half (50%) agree that they will not recruit and retain staff by focusing only on remuneration. Instead, the sector’s leaders are focused on a broader value proposition for employees.

Investment in future fitness requires not just resources but visionary leadership to navigate the complexities of the current market and emerge stronger.

“These are incredibly competitive industries where the pace of change can be breathtaking,” David says. “Many businesses have simply been trying to get through the tough times, but there is now some light at the end of the tunnel. That requires leaders to be absolutely clear about where they want to take the business and how to get there.”

By acting now to prioritise change, your business could be more ready to boost future resilience, meet market demand, reduce costs, or access capital. Find out about all the ways we could support you here: 

Retail | Ulster Bank

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