Retail

We help clients develop distinctive strategies to match today’s rapidly evolving retail landscape.

Winning online and off

Traditional retailers face disruption and existential challenges from the continued growth of online retail, taking customers and sales away from stores — and changing shopper expectations for product assortment, price, and retail experience. To compete, traditional retailers must redefine the role of the store, developing their own distinctive capabilities by leveraging both their physical and digital footprints.

At PwC’s Strategy&, we work with retailers around the world to define and execute the strategies they need to succeed in this environment. We help our clients develop distinct competitive capabilities and make tough choices to focus their resources on what matters most for growth — while reducing and eliminating costs in areas that do not drive competitive advantage.

Winning online and off

2017 Retail Trends

2017 Retail Trends

Each year, Strategy& looks at the major trends shaping different industries to help you navigate the challenges and seize opportunities.

For some retail sectors, showrooms may provide an attractive combination of consumer experience and compelling economics.

Find out more

How we can help you

Capabilities-driven strategy

In today’s turbulent retail environment, we believe companies succeed by adopting a “way to play” that is both differentiated in the market and founded on distinctive capabilities—a small number of things that an organization does better than any competitor. At Strategy&, we help clients reassess and reinvent their business strategies for long-term viability. We work with leadership teams at retailers around the world to identify and build the distinctive capabilities they need to win now and in the future.

Find out more

Talk to us

Fit for Growth

As retailers invest in new capabilities necessary for online and digital markets, they are seeing costs rise. At the same time, competition from off-price and online channels and increased price transparency is driving prices down. At Strategy&, we use the Fit for Growth approach to help retailers identify and invest in the capabilities they need to win, while freeing up resources from other less critical areas. The result is a more competitive offering in the market and lower costs. Our Fit for Growth approach helps companies by:

  • Ensuring strategic alignment
  • Investing to support distinctive capabilities for growth
  • Transforming cost structure
  • Aligning the organization and operating model
  • Enabling change and cultural evolution

Find out more

Talk to us

Promotions and pricing management

For most retailers, promotions and markdowns are a core part of driving revenue and margin. But retailers are often also stuck on a relentless treadmill of promotion “manufacturing” that leaves little time for post-event analysis, optimization, or innovation. At Strategy&, we bring deep experience in promotion design and analysis, retailer and vendor insight, and analytic tools to help retailers seize the initiative in the promotions cycle. Our approach helps retailers maximize their bang for the vendor buck and builds a true organizational capability in superior promotions management, driving measurable revenue and margin improvement.

Talk to us

Omni-channel strategy and operations

Traditional store-based retailers must find ways for their stores to be a source of competitive advantage both against online-only players and other traditional retailers. At Strategy&, we work with retailers to define the most impactful role for stores and how that interacts with online channels. For retailers, the right answer involves understanding consumer behavior and pain points, cost-to-serve, the nature of the categories sold, assortment, demand, desired consumer experience, and pricing. We support retailers to build distinctive capabilities, design detailed work flows, and implement new processes and experiences in stores and online.

Talk to us

Digital strategy and services

Digital is fundamentally altering the customer and employee experience. To stay relevant and grow over the long-term, retailers must approach digital as more than a series of siloed initiatives and approach ecommerce, social, mobile, loyalty, in-store experience, and supply-chain efficiency as a whole. At Strategy&, we work with clients to develop holistic strategies around how experience design, network economics, store operations, technology, and analytics come together to create value.

Find out more

Talk to us

Operations strategy

The continued growth of online retail and other changes in consumers' shopping behaviors are reducing and reshaping demand at traditional retailers. At Strategy&, we help retail clients develop the capabilities to effectively serve omni-channel demand and efficiently provide shoppers with a differentiated retail experience. We drive growth by tailoring merchandise flows to manage assortment complexity and demand response, while developing logistics capabilities to fulfill omni-channel demand. We improve efficiency by optimizing distribution networks and merchandise replenishment, while improving in-store labor productivity and utilization with lean processes, digital tools, and dynamic labor scheduling.

Find out more

Talk to us

M&A transformation

At Strategy&, we help clients transform their business through deals that realize strategic goals, capture value, and deliver growth. We work with companies to overcome the challenges created by industry disruptions and to take advantage of new opportunities including ecommerce, digitization, and consolidations.

Find out more

Talk to us

Insights

Case studies

Capabilities-driven strategy

U.S. retailer realigns capabilities across organization

A leading U.S. apparel company was gradually losing market share to specialty brands department stores and online competitors. Strategy& worked with the client to articulate and align on its way to play, expressed as a matrix of price and fashion preference. Based on this way to play, Strategy& identified the differentiated capabilities that were required to win and helped build and reinforce these capabilities across the client’s organization. As a result, the client was able to align their capabilities to support their go-to-market strategy, including the creation of an institutional product development capability (i.e., developing a capability more accurate and trend-predicting than any individual “style” leader). The results were better products, more of the time; fewer markdowns; and improved margins—online and offline.

Fit for Growth

U.S. retailer cuts costs and makes targeted reinvestments for growth

A leading U.S. retailer grew dramatically via an aggressive new-store opening strategy, but its expansion also meant high costs, causing a reduction in overall profitability. Strategy& used its Fit for Growth methodology to help generate significant savings, bolster existing differentiating capabilities, and build new digital ones. We benchmarked the retailer’s performance, assessed its organizational effectiveness, set improvement targets, and developed an agenda for strong growth. The initial phase was followed by a detailed design phase in collaboration with the CEO and senior leadership team. We implemented new management forums, decision-making processes, performance management, and talent development processes. As a result, the company increased its organizational effectiveness and fueled a high-performance culture ready to drive growth. In parallel, it improved its capabilities in digital, customer insights, merchandising, and marketing via targeted reinvestment. The client ultimately saved more than $1 billion and its stock price saw a 40 percent increase within 18 months.

Promotions management and pricing management

A leading convenience retailer relied heavily on promotions (and the associated vendor funding) to drive traffic and basket. However, the company lacked a systematic promotions management process and tools to evaluate effectiveness. As a result, it was too often at the mercy of powerful vendors and suspected it was leaving money on the table. We worked with the client to redesign and codify the monthly promotions management process, building in analytical tools to evaluate promotion economics (both standalone and including basket effects), formal check points to articulate and sign-off on promotions and post-event analysis. We also designed and built a promotions “library” to capture promotion characteristics, funding terms and results to enable future analyses and insights levarageable in vendor negotiations.

Omni-channel strategy and operations

Leading retailer redefines omni-channel economics

A large online and offline retailer was struggling to compete with pure play online retailers on cost and service levels. In order to lower cost and get products to the shopper’s door more quickly, we helped our client invest in a ship-from-store capability, not just as a “surge capacity,” but as the primary means of e-commerce fulfillment. We worked with our client to develop best-in-class operations for in-store picking and packing, including time standards, lean six-sigma-process improvements, and packing area layouts. As a result, the client was able to significantly reduce fulfillment costs and improve service levels, making its offerings much more competitive and maintaining the viability of the store base.

Operations strategy

Tailoring merchandise supply chains to improve sales and margins

At a large U.S. retail chain, sales were declining and a growing assortment was eroding margins due to supply chain complexity and markdowns. Strategy& developed tailored product streams to differentiate product flows and policies across core, seasonal, and fast-fashion segments. As a result, the retailer stabilized same store sales while improving the gross margin and operating margin by six points.

M&A transformation

Digital acquisition accelerates omni-channel strategy

A leading U.S. retailer needed support with the due diligence, pre-close planning, and post-close execution of an online, pure play e-retailer to accelerate its position in omni-channel retailing. Strategy& evaluated complex demand drivers—such as the impact of creating tax nexus for the online player, multiple revenue synergy plays, and supply chain and back office integration opportunities. As a result, the successful execution of the acquisition enabled the client to maintain a multi-website model, with a pure-play extended assortment and shop your local store formats, before ultimately bringing the entire digital model together into one of the strongest offerings in its category.

Related content