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VALUE REDEFINED: Boosting Margins in Western European Retailing
 

VALUE REDEFINED: Boosting Margins in Western European Retailing

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The economic climate of Western Europe remains difficult which poses challenges for both retailers and shoppers, but it also provides scope for the retailers to explore new opportunities and ...

The economic climate of Western Europe remains difficult which poses challenges for both retailers and shoppers, but it also provides scope for the retailers to explore new opportunities and innovative customer centric solutions.

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    VALUE REDEFINED: Boosting Margins in Western European Retailing VALUE REDEFINED: Boosting Margins in Western European Retailing Presentation Transcript

    • VALUE REDEFINED: Boosting Margins in Western European Retailing 1 © 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL
    • HIGHLIGHTS A PLANET RETAIL WIPRO Report The economic climate of Western Europe remains difficult which poses challenges for both retailers and shoppers, but it also provides scope for the retailers to explore new opportunities and innovative customer centric solutions. Success depends of how retailers add value to consumers which is more complex because of sophistication in the need and preferences of the consumer. For the retailers to convey value to the consumer, they must first know the answer to the question What do their shoppers actually WANT ? The continued rise of e-commerce means that the competitive stakes are even higher 2 © 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL
    • Operating Environment in Western Europe Challenging economic outlook Changing retail landscape Weak non-food sales  The economic outlook across Western Europe remains challenging and real GDP growth across this area remains low  The general economic situation also is showing no signs of improving anytime soon. If anything, things are getting worse, for the short term at least.  Retailers are looking beyond just low prices to include convenience, in-store shopping experiences and “retailtainment” and anytime, anywhere shopping Saturation Rise of ecommerce Rising Fuel Prices Regulations Urbanization  Hypermarkets, and to a lesser degree supermarkets, are getting squeezed.  There is continued growth for convenience stores & grocery formats–shows that there is more to value than just low price  Typically big product assortment and lower prices relative to convenience stores at least - are no longer enough on their own to win with consumers  Convenience and proximity to where consumers live or work has become significant 3 © 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL
    • The Changing Consumer Landscape Convenience DEMANDING Aging Population Tech-savvy Personalized Single Households Uncertain Economy Value Fast paced lifestyles Value Consumers are demanding more. Across Western Europe still want to treat themselves on day to day essentials like food and beverage, and will still spend more on items – as well as in retailers - that provide good value regardless of price 4 © 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL
    • Path to Purchase in the saturated markets Who are they? Are they men, women, old, young, singletons, parents? Is it routine, a top up, something more urgent or a bit more leisurely? For what purpose or occasion are they shopping? Where? In which channel? How & When? Retailers must understand who their core shoppers are and how they define value. They must know their shoppers’ different needs, missions and purchase occasions Establishing such clarity has become even more crucial given that the grocery sector in Western Europe is extremely saturated. The only Western European markets where the top 5 players do not hold a share of more than 60% are Italy, Spain and Portugal 5 © 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL
    • Retailer Perspective: The Role of Retail Technology SELF SERVICE IN STORES Reduces labor costs and copes with traffic peaks SHOPPER INTERACTION Analyze shopping behavior and target consumers in a more personalized way     6 OPTIMIZATION SOLUTIONS BASED ON PREDICTIVE ANALYTICS Improve margins and on-shelf availability REAL TIME ACCESS TO INVENTORY AND CUSTOMER INFORMATION ACROSS CHANNELS Enable a seamless shopping experience and optimize inventory For operational excellence, retailers can use automation and self-service technologies Optimization tools based on predictive analytics, to streamline supply chain efficiency. To understand consumer demands and improve merchandise planning, big data using predictive analytics can be used. And to serve customers seamlessly across channels, (near) real-time data access is now mandatory. © 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL
    • Focus on Germany: Illustrating the Nuances of Value According to Anglo-Dutch FMCG giant Unilever, Germany’s grocery retail landscape is “the hardest in the world”. WHY? 1. Consumer focus on low prices The answer to that question lies in the fundamental nature of Germany’s retail marketplace, which is characterized by three key factors despite being Europe’s most populous nation: 2. Oversaturation of retail outlets supports discount channel 3. Most German retailers privately owned Norway(480mn), Germany(337mn), Denmark(405mn) and Austria(441mn)- stores per million population- are the four Western European markets where the discount channels claims the highest share of overall food retail sales. Taken together, the top five grocers account for more than 80% of food retail format sales in Germany, and show just how consolidated the competitive landscape has become At present, convenience retailing remains completely underdeveloped in Germany 7 © 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL
    • Focus on Germany: Illustrating the Nuances of Value Is change looming on Germany’s retail horizon ? CASE IN POINT: Open up to brands: create new, added value shopping environments Justify Value: convince skeptical shoppers of product quality and ‘added value VALUE Products: accelerating their innovation cycles 8 Convenience: to become a viable grocery channel  Rewe Group’s supermarkets, for example, co-operate with regional farmers to distribute their products to local consumers.  The group is now experimenting with its Rewe to go concept at several locations. One of the key learnings for the grocer has been that shoppers want a seating area attached to the store to facilitate food consumption on-the-go © 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL
    • Future Channel Directions for Western European Retailing E-commerce will drive regional grocery sales Proximity and convenience are the new value Hypermarkets must make most of space Multi-channel is key to success Discounters must move beyond price and private labels GEORGES PLASSAT CEO, Carrefour “The hypermarket has lost its human touch. It must become attractive again [...] with an offer that answers clearly identified needs and customer expectations.” To continue offering value, retailers must adapt their businesses to consumer demands as they evolve, using technology to help with efficiency, pricing, product assortment and, ultimately, shopper interaction 9 © 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL
    • Proximity and convenience are the new value Europe: Discounters Retail Sales Prospects, 2013-2018 Europe: Convenience Store Retail Sales Prospects, 2013-2018 Discounters must move beyond price and private labels and hypermarkets must make the most of space 10 © 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL
    • The Hybrid Shopping Experience: Planet Retail’s Vision The future of retailing belongs to those who can best integrate e-commerce with their bricks and mortar stores. By incorporating in-store and e-commerce elements, retailers can create a hybrid shopping experience that caters to customers’ every need Supports the drive pick-up Automatically picked and packed Encouraging impulsive buys Focus on fresh food Last minute orders can be added on site Serviced Counters Multiple checkout options Source: The Planet Retail Value Redefined report 2013 11 © 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL
    • Conclusion  Due to the ever changing grocery landscape in Western Europe, “value” can no longer be simply defined as the lowest possible retail price. Shoppers now demand other value propositions including convenience, enhanced shopper experience and engagement, customisation and personalisation  With consumers becoming ever more tech-savvy, retailers must satisfy anytime, anywhere shopping and technology can help retailers win with shoppers anytime and anywhere.  Optimising the real-time interaction between the customer, the product and the retailer; delivering the right message, offer, product, recommendation at the right time via the right channel to the individual; all in real-time is critical 12 © 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL
    • For more details please visit the link below: http://www.wipro.com/Documents/value-redefined-boostingmargins-in-western-European-retailing.pdf 13 © 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL
    • About Planet Retail 14 © 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL
    • About Wipro Wipro Ltd. (NYSE:WIT) is a leading Information Technology, Consulting and Outsourcing company that delivers solutions to enable its clients do business better. Wipro delivers winning business outcomes through its deep industry experience and a 360 degree view of “Business through Technology” - helping clients create successful and adaptive businesses. A company recognized globally for its comprehensive portfolio of services, a practitioner’s approach to delivering innovation and an organization wide commitment to sustainability, Wipro has a workforce of 140,000 serving clients across 57 countries. For more information, please visit www.wipro.com. For more information, please visit www.wipro.com 15 © 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL
    • Thank You ©Wipro Limited, 2013. All rights reserved. For more information visit www.wipro.com No part of this document may be reproduced in whole or in part without the written permission of the authors. Wipro is not liable for any business outcome based on the views presented in this document. For specific implementation clients should take advise from their client engagement manager. 16 © 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL