There is certainly no shortage of challenges facing retailers these days and research from national professional services firm EY — formerly Ernst & Young — shows that the industry’s top leaders are feeling the pressure.
The rise of digital, consumer shifts toward experiential spending and high brick-and-mortar costs have all helped to send fashion brands and retailers packing recently.
Wet Seal, BCBG, American Apparel, Pacific Sunwear of California (PacSun) and Aéropostale Inc. are among the many firms that have filed for Chapter 11 protection in the past year alone.
Now, industry leaders are scrambling for effective solutions and go-forward strategies. In the interim, store closures and layoffs have become par for the course — Sears, Macy’s Inc., The J.C. Penney Co. and Nordstrom have all implemented some combination of those measures.
In early 2016, EY interviewed more than 200 senior executives from consumer products and retail globally and got the lowdown on some of the major concerns weighing on the fashion c-suite.
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Here, we round up five of them:
66% of retail executives say that traditional value-creation tactics are losing their potency among consumers.
77% said that their businesses can no longer reliably sustain profitable growth.
60% say they expect things to be even more difficult in the future.
74% said they see their profit margins getting squeezed.
68% admit that previous attempts to change their operational models have failed.