The retail executive market is busy. In 2020, there were over 50 senior appointments in ASX-listed retailers and in 2021, we anticipate this number to increase. The market for the early part of the calendar year is already busy, with a large number of organisations undertaking senior executive searches or succession planning processes within the consumer/retail market.  The degree this number will vary will be in line with market confidence.

The senior executive market is tight as the opportunity to introduce offshore talent is limited due to the threats of ongoing COVID-19 relapses.  Whilst we conduct global searches and identify the appropriate international candidates for each assignment, it will be highly unlikely that those based offshore will leave their country, family, friends and networks.  It will certainly be less than usual.  Therefore, this places emphasis on the domestic market and will stimulate appointments of those coming through the ranks.

Since the start of 2021, the US and the UK have seen COVID-19 infection rates decline in line with the vaccination rollouts.  Australia has managed to keep infection rates low whilst India is seeing some of the sharpest increases since mid- 2020.  Those who believe the virus to be in its later stage are more optimistic about the potential of emerging from the pandemic this year.  Post pandemic optimism is reflected in most markets, including Australia.  Central to this confidence is vaccination rates and in particular, the pace of the rollout.

Several countries have already outlined their intention to reopen borders for those who have received the required doses.  Some countries, including Australia, are also developing vaccine passports in preparation to have customers fly again.  India has experienced a tremendous turnaround in economic sentiment after its first positive quarter of growth since the beginning of COVID-19, and others such as the UAE and Australia are on track for a V-shaped recovery. It is anticipated that Hong Kong will continue to face economic challenges in 2021, and pessimism is high in the UK with extensive lockdown periods taking a toll.

Data illustrates that contrary to expectations of consumer spending exploding, most people are not yet filled with enormous confidence and as such, are remaining disciplined and financially prudent given elements of uncertainty.  However, Australia is arguably better placed than most and positivity is returning with low unemployment numbers and a belief that the impact of the end of JobKeeper will be short and markets will step up.

What is concerning and is impacting the consumer/retail market is the enormous opportunity that is being lost due to a lack of forward-thinking policy.  With no significant reform in tax and industrial relations policies being undertaken, there is a growing sentiment of indifferent leadership across the business and political landscapes.  The Morrison Government has seen more than a 10% net decline in support since last year, which will only increase as the vaccine rollout continues at a mediocre pace.  The State Premiers are difficult to predict, and whilst arguing for the good of their individual state, many have argued they are losing sight of the bigger picture for the nation.  The Federal Government has also, according to many business heads, failed to influence the Premiers to act in a more coherent manner leaving world investment on the sideline.  The relationship with China is also a major area of focus and needs some necessary repair.  The impact of the current engagement means all trading organisations need to examine other markets and commence building a comprehensive market strategy. In this respect, the world has changed.

Whilst other countries position themselves as “open for international business”, we arrive at short term band-aid solutions of cheap flights around the country.  No doubt, this is a great move for a number of industries, but it isn’t enough.  JobKeeper and JobSeeker have been terrific life support mechanisms. Now that JobKeeper has run its course, we have the opportunity to really get moving and seize the initiative, but instead, we limit ourselves to the same old red-taped, bureaucratic methodology of doing business. The other week saw the American Chamber of Commerce, PwC Australia and representatives of American companies with a combined market value of c. $4.5 trillion put forth the report “Attracting US Investors to Australia: The Opportunity Is Now”, highlighting this very point and bringing home the short-termism and lack of vision for the Australian economy.  We rely on our natural resources industry and dig more holes as opposed to taking this moment in time to apply the necessary pressure and deliver some needed reform to business regulation in an effort to achieve international competitiveness and stimulate entrepreneurship.  Business leadership has a role to play, and senior consumer/retail executives are in a position to positively influence the future course of their businesses, and by extension, the Australian economy.

People are returning to offices and starting to question the arguments around the proposed “new normal” working lifestyle, noting productivity, team culture, innovation, sense of social engagement and contribution being different in the office environment to the home.  Others are standing firm that the “new normal” is the long-term play and that we will not see a return to the office culture.  It will be interesting to review this in two years; however, trends are indicating movement back to the office.

For the consumer/retail market, the emphasis has been on digital, which has been the lifeline, the last mile and the ecosystem and how this can be extended to deliver value and capture the necessary customer and customer’s customer.  Behind the chatter, there is disappointment and exhaustion.  Unfortunately, for many, the pain lingers.  Truly successful digital transformations are rare. Research shows that 70% of them fail, and this has not been lost on the consumer/retail market. Secondly, the landscape is fierce.  Local retailers are caught defending against a heavy influx of international competitors encroaching market share.  Further, with interest rates low and some retailers struggling, the opportunity for market consolidation looms.  Recent research suggests cross-industry partnerships will be a significant driver for further growth in 2021, but such strategies remain largely untested.  At the same time, those with digital capability, excellent distribution and appropriate connectivity have witnessed outstanding growth in revenues and an opportunity to re-structure the business as they engage with the “new normal” customer.

Much of this change has shone the light on the composition of both the executive and Board in terms of the necessary future skills, highlighting gaps in technology and a general need for accelerated decision making.  COVID-19 has fast-tracked much of the planned digital strategy to a period of rapid implementation, a streamlining of roles, an examination of outsourcing and putting forth the question around the future of working from home being be replaced by offshore models.  As has been remarked, “Why pay someone to work at home if I can get the same productivity for half the price outside of Australia working from their home?”  Others have noted, “The working from home model will save us significantly in property costs.”  Some that are seeking to have their staff return are worried by the potential implications of health and safety regulation and possible legal suits from those based at home.  According to the Blenheim Partners Board Practice, “There has been further questioning around technology capability and understanding as well as experienced leadership. The demand for applicable industry experience to the organisation has increased.”

Blenheim Partners’ dedicated Consumer/Retail Practice has built and will continue to gather intelligence on a pool of current and future senior executives.  We have also invested heavily in our Technology and Digital Transformation Practice and continue to occupy a lead position promoting diversity in the Executive and Board as an essential characteristic of the most effective and successful teams.  We believe diversity is a multivariate attribute that includes gender, ethnicity, experience, culture, language and other factors.

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