Retail in an age of disruption
Disruption was also identified as a key concern for global retail leaders, according to findings from the 2014 Global Retail Index, exclusive research commissioned by World Retail Congress and conducted by the Australian Centre for Retail Studies (ACRS) in the Department of Marketing at Monash University.
Findings suggest that retail revenue is expected to increase in most markets. This was led by the Middle East and China, with 89 per cent and 88 per cent of retail leaders respectively expecting sales to increase in the next 12 months. Retail leader sentiment in Australia has improved year on year over the past three years, and is now positive, compared to being negative in the past two years.
Congress sessions were devoted to various elements of retail disruption and largely centered on recovering from tough economic times, connected consumers and technological advances, all of which have combined to reshape the retail landscape. Kingfisher CEO, Ian Cheshire, discussed strategies for retailing in a disrupted world, stating “retailers must be prepared to break some of the rules in an era of the first set of globally aware consumers”.
This view is of little surprise given that the past five years have been characterised by unprecedented and disruptive change in retail. Every aspect of the industry – from manufacturing to e-commerce – has fundamentally shifted.
Disruption has also been seen across industry sectors and distribution channels, with discounters disrupting supermarket business models, just as online is disrupting the bricks and mortar channel.
Although these shifts can be seen as negative, there was a real sense that retail today is more dynamic and exciting than ever before. Discussed by both traditional and emerging retailers, the era of disruption also presents an abundance of possibilities for retail growth. This is evident by the success of some of the most iconic global retailers, despite constant disruption.
For instance, heritage UK department store group John Lewis was awarded Omnichannel Retailer of the Year in the 2014 World Retail Awards, however, this is not at the expense of physical stores, with MD, Andy Street, revealing plans to open additional John Lewis stores by “focusing on creating shops which are social spaces – where people want to spend their leisure time”.
Despite the pressure to address to the latest consumer demands and adopt emerging technologies in an era of disruption, the basic fundamentals of retail must be in place.
As stated by Samsung Electro-Mechanics president and CEO, Chi-Joon Choi, the hyper-connections available between “every and any” device created huge opportunities, but that it is a question of retail going “back to basics” to look at what could realistically be achieved. Citing examples such a dynamic pricing, contactless payment and locational guidance, he noted “interchangeability between online and offline is the goal”.
It was also evident at this year’s Congress that the industry is also being disrupted by new retail businesses that often are free of the legacy issues of systems, culture and store networks.
The Congress heard from several retail disruptors, including Shoes of Prey, This is Story, KupiVIP, Priceminister, and Ocado. Importantly, these businesses play by new rules that they themselves have set in response to today’s retail marketplace and consumers.
Product curation, customisation and personalisation were cited as common strategies for these disruptor retailers. Google VP of product management, shopping products, Sameer Samat, noted that in the US “there has been a decline in footfall of 55 per cent, yet sales went up, so consumers are arriving at stores much better informed. Where we are going is really to personalised shopping”.
The Millennial generation was a commonly discussed source of consumer disruption. Coca Cola Global CMO, Joseph Tripodi, noted that by 2030 Millennial consumers will out number non-millennial consumers. He discussed strategies to cater to this emerging consumer market, noting they care more about authenticity than product, which means it is no longer about what a brand sells and more about what the brand stands for. For retailers, this means keeping relevant and meaningful.
Members of the ACRS team attended the 2014 Congress, participated in judging of the World Retail Awards and presented results of the third annual Global Retail Index. Next week, ACRS research director, Dr Sean Sands, and senior consultant, Dr Isabella Maggioni, will present the highlights of the 2014 Congress based on 10 major disrupters, as well as summarising findings of the Global Retail Index and profiling award winners.
Sands and Maggioni will be joined by one of Australia’s own retail disrupters, Will Rogers, founder and director of Kent & Lime. Rogers will share insights into how Kent & Lime is reinventing all aspects of retail, from customer service to personalisation.
The ACRS World Retail Congress Highlights seminars will take place in Sydney on Thursday 23 October and Melbourne on Wednesday 29 October. Event details and registration can be found here: http://www.buseco.monash.edu.au/acrs/seminars/insights/
For discounted table rates, please contact Sean Sands – email@example.com.