Rohit Talwar ICSC Baltic Retail Conference Presentation - Cctober 20th 2011


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Rohit Talwar's presentation to the ICSC Baltic Retail Conference, looking at innovation and new thinking in shopping centres.

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Rohit Talwar ICSC Baltic Retail Conference Presentation - Cctober 20th 2011

  1. 1. Shaping the Future Driving Retail Innovation and New Thinking in Shopping CentresShopping Centre of the Future ICSC Baltic States RetailReal Estate Conference - Vilnius October 20th 2011 Rohit Talwar CEO - Fast Future
  2. 2. ContentsPresentation p3About Fast Future p 69Background Materials p 80Image Sources p 206
  3. 3. The World in 2015
  4. 4. How do we get there from Here? Customer Continuous New Insight Innovation Business Models
  5. 5. Growth is not Guaranteed…
  6. 6. …Thinking is Back in Fashion
  7. 7. Transformational Change? It’s Only Just Begun
  8. 8. 10 Key Patterns of Change Shaping the Next Decade Economic turbulence, a shift in wealth from west to east and political uncertainty are shaping the landscape Natural Society in Resource Demographic Transition Challenges Destinies Geo-political Generational Complexity Economic Crisis Crossroads and Power Shift RethinkingTechnology Talent,and Science Education, Training Enterprise 3.0 Global Internet Expansion Source: Designing your Future – Key Trends, Challenges and Choices – Fast Future
  9. 9. Demographic Destinies 2 billion more people in 40 years –Demographics is Driving Economics 448 739 691 5231 344 1998 4157 729 1030 585 2010 2050 Source : United Nations
  10. 10. Life Redefined – Lifespans are IncreasingUnder 50’s have 90%chance of living to 100.Aubrey de Grey suggestswe could live to 500 or 1000What are the health,consumption and resourceimplications?What kind of opportunitieswill be created?
  11. 11. Competitiveness and Innovation Rankings World Economic INSEAD – Global Innovation for Forum – Global Innovation Index Development Competitiveness 2011 Rankings Report 2010-2011 – Report 2011-2012 (out of 125) [2] Innovation Rankings Capacity Rankings (out of 142) [1] (out of 130) [3]Czech Rep. 38 27 32Estonia 33 23 25Latvia 64 36 30Lithuania 44 40 26Romania 77 50 55Slovakia 69 37 36
  12. 12. Retail Innovation
  13. 13. The Baltic Outlook
  14. 14. Luxury Retail
  15. 15. Race to the Middle
  16. 16. Local Outlets and Products
  17. 17. Discount Debates
  18. 18. Value or Values?
  19. 19. Stores as a Brand Experience
  20. 20. Pop-up Stores – e.g. Boho
  21. 21. Tesco My Liberec
  22. 22. Innovative Experiences:Edible Furniture - Lithuania
  23. 23. The Slide@T3Changi Airport - Singapore
  24. 24. Technology and Retail
  25. 25. Digital Signage – Unirea Romania
  26. 26. Integrating Physical and Virtual
  27. 27. ‘Scan It’
  28. 28. TMT – Convergence and ImmersionTelephony Connectivity• Voice • Cellular• Messaging • Up to 14 bands• SIM card • WLAN/BT• Phonebook • GPS• Ring Tones • NFC• Security • FMData/ MultimediaEnterprise • Camera 8-16M • Camcorder• 100Mbps • 24M Color Display• Email • Memory (160GB)• IMS • Multiformat A/V• Browsing • HD Video/TV out• VPN • Games• PIM• Ecommerce Software (50-100M Tps) • Protocols • DRM• Payments • Middleware • Applications • User Interface • Minimize fragmentation
  29. 29. Near Field Communications -Mobile Contactless Payments
  30. 30. Mobile EnabledPersonalised Advertising
  31. 31. QR Tags
  32. 32. Daily Social Media Offers e.g. Twitter
  33. 33. Social Shopping in Estonia
  34. 34. Fits.Me
  35. 35. Fits.Me
  36. 36. Store and Product Locators
  37. 37. Kiosks and Interactive Surfaces
  38. 38. Ambient (Embedded) Technologies (IP in Everything)
  39. 39. ‘Virtual Assistants’
  40. 40. Holographic Displays
  41. 41. Augmented Reality atCopenhagen Airport
  42. 42. Gesture Interfaces
  43. 43. Touchable Holograms
  44. 44. Interactive Surfaces
  45. 45. Wearable Displays
  46. 46. Ambient Intelligence
  47. 47. 3D Printing – True Personalization
  48. 48. Innovation –Where are the Opportunities?
  49. 49. Leveraging Customer Insight
  50. 50. Building Trust Brands
  51. 51. Attracting Customers
  52. 52. New Retail Concepts
  53. 53. Chain vs. Independent
  54. 54. Catering and Lounge Experiences
  55. 55. Services
  56. 56. Rethinking Business Models
  57. 57. Best Price Guarantees
  58. 58. Partner Tie-insPullman Bangkok King Power Hotel
  59. 59. Auctions - The $17,739 iPad
  60. 60. So How do we Respond?
  61. 61. Make Time and Space for Change
  62. 62. What does the timeline ofdevelopments and challenges look like for your markets?
  63. 63. Deep Dive on Key Trends / Issues
  64. 64. Are you Sticky and Magnetic?
  65. 65. How Networked Are You?
  66. 66. Conclusions• Expect Turbulence• Understand Trends and Scenarios• Embrace Innovation
  67. 67. Thank YouRohit TalwarCEOFast Futurerohit@fastfuture.comTel +44 (0)20 8830 0766Mob +44 (0)7973 405145Twitter http://widerhorizons.wordpress.comSignup for our newsletters / Download past editions at www.fastfuture.comWatch a short video of Rohit at the Hotels 2020: Beyond Segmentation Report at
  68. 68. About Fast Future
  69. 69. Fast Future – Retail and Real Estate Industry Services• Live Events - Speeches, briefings and workshops for executive management and boards of retailers, property and construction firms, airlines, airports, hotels, venues, CVB‟s and associations• Future Insights - Customised research on emerging trends, future scenarios, technologies and new markets• Immersion - „Deep dives‟ on future trends, market developments, emerging issues and technology advances• Strategy - Development of strategies and business plans• Innovation - Creation of business models and innovation plans• Engagement - Consultancy and workshop facilitation
  70. 70. Fast Future• Research, consulting, speaking, leadership• 5-20 year horizon - focus on ideas, developments, people, trends and forces shaping the future• Clients – ING, ABN Amro, Laing O‟Rourke – Marks and Spencer – Airports - Aeroports de Paris / Schiphol Group – Vancouver Airport Services – Industry Associations – ICCA, ASAE, PCMA, MPI – Corporates - GE, Nokia, Pepsi, IBM, Intel, Orange, O2, Siemens, Samsung, GSK, SAPE&Y, KPMG, Amadeus, Sabre, Travelport, Travelex, ING, Santander, Barclays, Citibank, DeutscheBank – Governments - Dubai, Finland, Nigeria, Singapore, UK, US – Convention Bureaus – Seoul, Sydney, London, San Francisco, Toronto, Abu Dhabi, Durban, Athens, Slovenia, Copenhagen – Convention Centres – Melbourne, Adelaide, Qatar, QEIICC – Hotels - Accor Group, Preferred, – Intercontinental – PCO‟s - Congrex, Kenes
  71. 71. Hotels 2020 – Objectives• Identify key drivers of change for the globally branded hotel sector over the next decade• Examine the implications for:  Hotel strategy  Brand portfolio  Business models  Customer targeting  Innovation
  72. 72. Convention 2020• Global strategic foresight study to help the meetings industry prepare for the decade ahead - Industry-wide sponsors• Multiple outputs Nov 2009 – December 2011• Current studies on future strategies for venues and destinations
  73. 73. Future Convention Cities Initiative• Members - Cities aiming to be global leaders in delivery of business events• Focus - Maximising long term economic benefit of events• Core Activities - Research, sharing of expertise and best practices• Engagement Model - Meet four time a year prior to major industry events• Management - Initiated and co-ordinated by Fast Future
  74. 74. Rohit Talwar• Global futurist and founder of Fast Future Research.• Award winning speaker on future insights and strategic innovation – addressing leadership audiences in 40 countries on 5 continents• Author of Designing Your Future• Profiled by UK’s Independent Newspaper as one of the Top 10 Global Future Thinkers• Led futures research, scenario planning and strategic consultancy projects for clients in telecommunications, technology, pharmaceuticals, banking, travel and tourism, environment, food and government sectors• Clients include 3M, BBC, BT, BAe, Bayer, Chloride, DTC De Beers, DHL, EADS, Electrolux, E&Y, GE, Hoover, Hyundai, IBM, ING, Intel, KPMG, M&S, Nakheel, Nokia, Nomura, Novartis, OECD, Orange, Panasonic, Pfizer, PwC, Samsung, Shell, Siemens, Symbian, Yell , numerous international associations and governments agencies in the US, UK, Finland, Dubai, Nigeria, Saudi Arabia and Singapore.• To receive Fast Future’s newsletters please email
  75. 75. Designing Your Future Key Trends, Challenges and Choices• 50 key trends• 100 emerging trends• 10 major patterns of change• Key challenges and choices for leaders• Strategic decision making framework• Scenarios for 2012• Key futures tools and techniques• Published August 2008• Price £49.95 / €54.95/ $69.95• Email invoice request to
  76. 76. Our Services Bespoke research; Identification & Analysis of Future Trends, Drivers & Shocks Public Speaking, In- Company Briefings, Accelerated Scenario Seminars and Workshops Planning, Timelining & Future MappingPersonal Futuring for Leadersand Leadership Teams Expert Consultations & Futures Think Tanks Identification of Design & Facilitation of Opportunities for Innovation, Incubation & Innovation and Strategic Venturing Programmes Investment Strategy Creation & Development of Implementation Roadmaps
  77. 77. Example Projects• Public and private client research e.g. : – Development of Market Scenarios, emerging trends and strategies for key clients – Government and OECD Scenario Projects – e.g. Migration 2030, Future of Narcotics, Chemical Sector, Family 2030 – Scenarios for the global economy for 2030 and the implications for migration – Designing Your Future (Published August 2008) – book written for the American Society of Association Executives & The Center for Association Leadership – Global Economies – e.g. The Future of China – the Path to 2020 – The Shape of Jobs to Come – Emerging Science and Technology Sectors and Careers – Winning in India and China – The Future of Human Resources – Exploiting the Future Potential of Social Media in UK Small to Medium Enterprises – Convention 2020 – the Future of Business Events – Future Convention Cities Initiative – Maximising Long-term Economic Impact of Events – One Step Beyond – Future trends and challenges for the events industry – Hotels 2020: Beyond Segmentation – Future Hotel Strategies – The Future of Travel and Tourism in the Middle East – a Vision to 2020 – Future of Travel and Tourism Investment in Saudi Arabia – Aviation and Airports e.g. Aviation 2030
  78. 78. Example Clients
  79. 79. Background Materials
  80. 80. Macro Statistics - Czech republic, Slovakia, Romania, Estonia, Latvia & Lithuania Growth % Productivity Business Environment Growth of Real Labour Global Rank Regional GDP 2011 – Productivity (out of 82) Rank (Out of 2030 % Growth 2011- 16)* 2030 % change 2006- 2011- 2006- 2011- change Annual annual av. 2010 2015 2010 2015 av.Czech Rep. 2.2 2.7 27 29 1 2Estonia 3.5 4.1 28 30 2 3Latvia 3.6 3.8 45 47 8 9Lithuania 3.4 3.6 43 46 7 8Romania 3.4 3.4 50 50 10 10Slovakia 3.4 3.6 31 30 4 3* Azerbaijan, Bulgaria, Croatia, Czech Republic, Estonia, Hungary, Kazakhstan, Latvia, Lithuania, Poland, Romania, Russia, Serbia, Slovakia,Slovenia and UkraineEconomist Intelligence Unit,
  81. 81. Macro Statistics cont. Growth of GDP per headCountry Growth of Real GDP per head (% change; annual average 2011 – 2020 2021 - 2030 2011 - 2030Czech Rep. 2.5 2.6 2.5Estonia 3.9 3.8 3.9Latvia 4.4 4.4 4.4Lithuania 4.7 3.1 3.9Romania 3.7 3.8 3.7Slovakia 3.7 3.5 3.6Economist Intelligence Unit,
  82. 82. Direct Retail Sales - Czech Republic,Slovakia, Romania, Estonia, Latvia & Lithuania Estimated Retail WorkforceCountry Sales, US $ Number of % Women % Part Time Mn SellersCzech Rep. 223.5 223,673 95% 85%Estonia 17.2 20,960 95% naLatvia 27.4 24,000 96% naLithuania 41.1 31,235 95% naSlovakia 98.6 98,000 Na naRomania 204.4 245, 560 84% 31%WfDSA International Statistics, [no date]
  83. 83. EU and Euro Area Economic Sentiment IndicatorStatistical Office of the Slovak Republic, 06/11,
  84. 84. European Innovation Scoreboard
  85. 85. Natural Resource Challenges―Companies that are not adequately managing theconsequences of climate change on their business willnot be welcomed as our customers in the future‖ Rick Murray Chief Claims Strategist Swiss Re
  86. 86. Personalization
  87. 87. Reinventing Formats
  88. 88. Curiosity Drives Insight
  89. 89. Booking/Boarding Pass Ads / Offers
  90. 90. Outlook for CEE
  91. 91. 10 Assumptions for CEE through 20201. CEE in its current form will not exist any more – Europe will consist of EU and non-EU countries, and the region will be much more diverse2. The region will not be among the global emerging markets but will remain the main European growth region. GDP growth will plateau at about 2% above WE level3. Although the CEE countries continue to develop from "workbenches" to innovation-driven economies, the gap between Western Europe and CEE will persist4. Lack of basic requirements (institutions, infrastructure) will remain CEEs main weakness, whereas efficiency enhancement is a competitive advantage5. Human capital issues (demographic development, brain drain, education) will remain the second bottleneck for further economic developmentCEE in 2020, 11/10, 13/07/11
  92. 92. 10 Assumptions for CEE through 20206. In 2020, CEE will still be dependent on Western Europe – Pan-CEE business is developing fast and may become a potential way out7. Its unique position as a bridgehead between the emerging markets of Russia, Turkey, China and the advanced economies of Western Europe is CEEs future capital8. Counteracting the scarcity of energy & raw materials, the consolidation of public finances and the consequences of technological progress are the main tasks for the next decade9. The regional growth industries will be energy & utilities, IT & telecom and pharma & healthcare – Shift toward future industries needed10. The main future growth drivers are thought to be energy- related (energy efficiency, renewables) and IT solutionsCEE in 2020, 11/10, 13/07/11
  93. 93. Retail Trends - Czech Republic
  94. 94. Czech Republic Retail Innovation
  95. 95. Czech Retail Trends
  96. 96. Czech Retail Trends• The Q311 BMI Czech Republic Retail report forecasts that the countrys retail sales will grow by 19% between 2011 and 2015, from a predicted CZK929.11bn (US$89.13bn) in 2011 to CZK1,101.57bn (US$105.67bn) by the end of the forecast period.• Rising disposable incomes, easier access to credit, the increasing number of large retail outlets and shopping centres and increasing car ownership are key factors behind retail market expansion.• EU membership since 2004 and substantial foreign direct investment (FDI) continue to drive growth, contributing to predicted annual retail sales growth of 4.0% in local currency terms over the forecast period. Source: Research and Markets, 2011
  97. 97. Czech Retail Trends • BMI data suggest that over the counter (OTC) pharmaceutical sales will grow by nearly 28%, from US$0.81bn in 2011 to US$1.04bn by the end of the forecast period. • Consumer electronic sales are forecast to expand by nearly 24%, from US$4.20bn in 2011 to US$5.20bn by 2015, with per capita consumer electronics spending forecast to grow by at least 19% to US$513 as sales of digital products increase. • Vehicle sales are expected to rise by nearly 24%, from 194,602 units in 2011 to 240,910 units in 2015. On the domestic sales front, new car registrations are estimated to have been flat in 2010 but growth is expected to recover strongly from 2011 as the economy picks up, credit becomes more widely available and the effects of government incentives begin to be felt.Source: Research and Markets, 2011
  98. 98. Czech Retail Trends • Food sales in the Czech Republic, forecast by BMI to be US$12.85bn in 2011, are predicted to rise by 15.4% to US$14.82bn by 2015. Food expenditure as a percentage of GDP is expected to decrease slightly, from 5.8% in 2011 to a projected 5.1% in 2015. This reflects the broader expansion of the economy and the ability of consumers to purchase a wider range of consumer goods, although price consciousness, as in all Central and Eastern European (CEE) countries, still characterises consumers‟ purchasing habits.Source: Research and Markets, 2011
  99. 99. Czech Trends• Chained retailers seek ways on how to maintain consumers• Czech consumers became used to a high level of special offers and discounting actions of chained retailers which chose this strategy in an effort to attract consumers at the end of the review period.• Nevertheless, this strong emphasis on weekly (or monthly) special offers increased the frequency of shopping and reduced the loyalty of consumers.• Moreover, this strategy also had a negative impact on mark-ups and profit of retailers. With respect to this, retailers started to seek ways on how to not only attract consumers, but also to retain them.• These strategies include for example loyalty programmes, a wider offer of private label brands or improvement of the shopping environment. Source: Euromonitor, 2011
  100. 100. Retailers in the Czech Republicinvest in networks modernisation• Ahold continues modernisation of its network in the Czech Republic. In 2010 the company renewed 17 shops, mostly supermarkets. Furthermore, this year Ahold wants to remodel at least 25 shops, according to Financni Noviny.• The other retailers operating on the Czech market also rejuvenate their networks. For example Tesco Czech Republic remodels some of its hypermarkets into Tesco Extra venues characterised by a larger store‟s space and hosting a pharmacy and other supplementary services.• Tesco opened three of those shops so far and the next two will be remodelled later in 2011• On the other hand, discounter chains Kaufland and Penny decided to update shops by changing interiors and layout as well as expanding fresh food sections. Source: CEE Retail, 2011
  101. 101. Tesco Extra Rebranding
  102. 102. Ahold – Network Modernization
  103. 103. Kaufland / Penny – Store Refresh
  104. 104. CEE Retail Real Estate Awards 2010
  105. 105. CEE Retail Real Estate Awards 2010• Mixed-use Project of the Year - Eurovea – Slovakia (1)• Shopping Centre Large: over 40,001 to 75,000 sqm GLA - Eurovea• EUROVEA is a €450 million investment in Bratislava and Slovakia‟s largest mixed-use development to date (2). quarter is spread over an area of more than 230,000 m², and is the largest development in Central Europe.• EUROVEA retail component, with its 150 shops, brings together international retailers, such as Marks & Spencer, Next, Debenhams and H&M. Adjacent to the retail is the Ballymore owned five-star, 209 bedroom Sheraton Bratislava Hotel. The development also contains 30 restaurants and bars, and a 9 screen cinema. The residential component consists of 235 apartments and the project offers also 24,500 m² of Class A office accommodation.• EUROVEA is expected to bring in excess of 12 million people annually to this part of Bratislava. (1)
  106. 106. Slovakia - Retail Trends
  107. 107. Slovakia Retail Trends• „The outlook for consumer spending in Slovakia is currently relatively positive. We expect the Slovak economy to experience a sustained recovery into 2011, complete a rebound in consumer spending by 1.5%. While exports will remain key to growth, we believe that they will begin to play a less prominent role in driving real GDP growth in 2011. Though the unemployment rate remains stubbornly high, we expect that the sustained economic recovery in the country will see this rate come down in the second half of the year. However, high food inflation and recently increased taxes on alcoholic drinks will continue to feed through to consumer prices, negatively impacting volume sales, especially of premium goods. ‟Source: Market Research 2011
  108. 108. Slovakia Retail Trends• Headline Industry Data (local currency)• 2011 per capita food consumption = -0.85%; forecast to 2015 = +9.04%• 2011 alcoholic drinks sales = +3.18%; forecast to 2015 = +15.95%• 2011 soft drinks sales = +6.12%; forecast to 2015 = +37.45%• 2011 mass grocery retail = +1.17%; forecast to 2015 = +12.82%Source: Market Research 2011
  109. 109. Slovakia Retail Trends • A June 2011 study by the real estate consultancy Colliers International (CI) shows that the Slovak capital city of Bratislava has one of the lowest rents in retail space compared to other capital cities in the region. The highest rents are paid in stores in Budapest, namely €65/m² per month. This figure in Bratislava stands at €38/m² per month. • The rents in shopping centres and other retail facilities have gone down in all capital cities in Central Europe over the past year. Owners of shopping centres continue to lower rents in a move to attract tenants. • Rent in Bratislava is the lowest in the region, standing at €40/m² per month. This figures goes up to €86/m² per month in Warsaw, €110/m² per month in Budapest, and to €200/m² per month in Prague.Source: CEE Retail, 2011
  110. 110. Retail Innovation Slovakia
  111. 111. Slovakia - Retail Expansion
  112. 112. Slovak Retail Market Expansion• A total of 85,000 m² in shopping centre GLA was delivered in Slovakia in 2010, a 50% drop against the previous year, according to data from the real estate consultancy Colliers International (CI). No shopping centre was delivered in Slovakia in Q1 2011.• At the moment, the total area of shopping centres under construction in the country is 140,000 m², according to CI.• A major boost to the market will be the construction of the Central shopping centre in Bratislava. Another major shopping centre project slated for completion in 2011 is the Bory Mall -expected to bring some 65,000 m² GLA onto the market.• 2011‟s expansion of shopping centres in Slovakia is also expected to be regional, with centres scheduled to open in Humenne, Cadca and Malacky.Source: CEE Retail, 2010
  113. 113. Slovak Retail Act Abolished• The Retail Act, which was intended to prevent retail chains from abusing their powerful market positions in their dealings with suppliers, was repealed on 12 January 2011 by the Slovak government.• The Act‟s aim was to prevent retail chains from imposing unfair commercial conditions in their contracts with suppliers.• The procedure for the repeal of the Act was initiated by the Ministry of Agriculture, which claimed that it did not achieve its goal of putting an end to the unfair conditions imposed by retail chains on their suppliers. The ministry argued that the abolition of the Act lowers the barriers to entrepreneurship in the field of food supply, improves the business environment in the retail arena and reduces the regulatory burden.• According to the ministry, the Act did not fulfill its goal to put an end to unfair conditions imposed by retail chains on their suppliers. Source: CEE Retail, 2011
  114. 114. Slovak Retail Act Abolished• Opposition MPs have criticised the move, saying that without such a law, the practices of foreign retail chains, which forced suppliers to sell their products to supermarket and hypermarket operators at production prices will return to the Slovak retail market.• On the other hand, the Agriculture Ministry says that without this Act more Slovak products will make it to the market. It argues that once the retail law was adopted some two years ago, multinational chains started to avoid Slovak suppliers completely and to buy more produce abroad. Source: CEE Retail, 2011
  115. 115. Tesco My LiberecTesco My Liberec, based in the Czech town of Forum Liberec is Tesco‟s firsteffort at a department store cum supermarket. This is part of a strategy toexpand beyond the basics of Tesco‟s grocery business.• The Czech republic was targeted as a trial market for the format as it‟s consumers have a very different idea as to what Tesco can provide than do consumers in more established markets.The finished product is very different from a traditional Tesco store.• It bears very little Tesco signage• The grocery area has been given a makeover having more in common with upmarket food halls• The department store space (downstairs incidentally; a reversal of the norm)• Tesco brands rub shoulders with concessions in a carefully designed spaceRetail Week, 19/03/2009,
  116. 116. Tallink Silja Oy –‘1000’ Experience Programme
  117. 117. ”1000 Tuotekehittäjää”Tallink Silja Oy* won the Excellence Finland, Quality Innovation Prize of theYear award for its product development concept ”1000 Tuotekehittäjä䔕 The prize is awarded annually to an innovative product, service or operation concept. Tallink Silja won the prize in the category of large companies• The campaign ”1000 Tuotekehittäjää” was realized for the Silja Line brand in autumn 2009. Consumers were urged to test the cruises and provide feedback. Oy selected 1000 regular customers and offered them a cruise in Class A. These customers then provided comprehensive feedback. The answerers were also able to comment, propose ideas and their own development suggestions.• Several development ideas originating with the project, such as interactive blog Siljan Tuotekehittäjät, have already been implemented and others are pending.• executive manager of Tallink Silja Oy, Margus Schults, has said that Oy ”…intend to develop our products and services in collaboration with our customers also in future”• The project has been held up as a role model for user involved service innovationEstonia Trade, 01/12/10, 12/07/11
  118. 118. Pop Up Malls?
  119. 119. Czech Pop-up Store• Pop-up stores have recently become a phenomenon in the Czech Republic.• The Boho Pop Up Store opened in a space adjacent to the Czech Inn in Prague 10-Vršovice and is the brainchild of Patricia Madarova.• The Boho Pop Up Store is homey, with old used furniture as a backdrop to the clothing and accessories.• Suitcases with their original clasp closures are priced from 390 CZK ($22).• Pop-up stores, and this one included, are only open for a short period. The Boho pop-up stores closing Bang-Bang party was August 11, 2011. Source:, 2011
  120. 120. A First in Slovakia• This year in Central Europe Tesco has launched the Extra store format. The new format has introduced to our stores a range of innovations, from self- service checkouts to retail services, such as pharmacies, opticians, and financial services. Many of these innovations are firsts for the country.• Tesco Mobile was launched in 2010 in Slovakia and is now the biggest alternative Telecoms provider after Orange, T-com and O2. Source: Tesco PLC, 2011
  121. 121. The Baltic States
  122. 122. Retail - Estonia
  123. 123. Estonia Retail Innovation
  124. 124. Estonia Retail Innovation
  125. 125. Sales and Operations Planning
  126. 126. Sales and Operations Planning • In June 2011 Infor, provider of business application software, announced a business partnership with UAB Senuku (Senukai) - the biggest DIY retailer in the Baltics, to deploy Infor S&OP combined with the Infor SCM Demand Planning and Replenishment Planner. • The project encompasses the complete sales and operations planning (S&OP) cycle from demand planning and inventory optimization through to supply replenishment across their retail and wholesale branches. • Infor will help Senukai to reduce overall stock levels while avoiding stock- out situations by improving demand forecast accuracy for every product at every location and planning replenishment across their international supply chain. Infor S&OP enables UAB Senukai to get more insight into their demand and supply plans, perform real-time what-if scenario planning for different demand-supply conditions and assess their plans in unit and financial terms.Source: Retail Technology Review, 28/06/2011,
  127. 127. Help for Start-Ups • HumanIPO is an Estonian based online platform seeks to help gather momentum for startups of any kind from around the world. • Entrepreneurs can use HumanIPO to build a business by sharing their ideas in order to find partners, mentors, consultants, foreign sales agents and investors. • Toward that end, leaders of startups can upload their business ideas in “stealth mode” on HumanIPO, including just basic details such as a startup teaser, pitch and attachments to explain the idea further. From there, they can invite feedback on their idea from contacts on LinkedIn and elsewhere. • As on Facebook, visitors can post comments and suggestions on the startup idea‟s “wall”; they can also follow the concepts they like. Eventually, when the startup is ready for further visibility, the entrepreneurs involved can publish the teaser on the HumanIPO directory, opening it up to new potential partners and funding opportunities.Source: Springwise, 05/11/2010, /
  128. 128. Social Shopping in Estonia • is a social shopping platform from Estonia that gives consumers a way to share their latest purchases and comment on those of their friends. • is a social utility that aims to make it easy for people to track their friends‟ shopping habits. Users enter their purchases via a simple interface, including a photo along with the date, time and price; for updates on the go, a mobile iPhone app is also available. From there, other members can view and comment on each other‟s purchases. The site‟s search tool also lets consumers sort results by country or keyword for a look at trends of interest to them. • is free for users. No word yet on its business model, but as with other such ventures, there‟s clearly the potential not just for advertising but also for referral fees from vendors whose products get highlighted on the site.Source: Springwise, 01/02/2010, /
  129. 129. Retail Innovation Lithuania The Mosaic store, opened in 2008, represented a new retail concept in Vilnius. The project was a year in development. • The Mosaic brand went through a fast track development process which set out a requirement to visually differentiate between Men‟s, Women‟s and Children‟s collections in store. • The brand is aimed toward office workers and as such the store borrows from „office‟ design. • The lighting was also specially designed as was the store architecture.Source: Fibre2Fashion, 11/11/08, 12/07/11
  130. 130. Edible Furniture Innovative publicity stunt: • In February 2011 a store called Adventures in Retail in the Akropolis shopping mall in Lithuania created an entire chocolate dining room. • The store transformed 183-square-foot space into a full-blown chocolate dining room set. • The entire room weighing in at 661 pounds of chocolateSource: Trend Hunter, 17/02/2011,
  131. 131. Retail - Latvia
  132. 132. Estonia - Latvia Programme 2007-2013
  133. 133. Estonia - Latvia Programme 2007-2013 • The Estonia-Latvia Programme 2007-2013, began in 2007 as a cross-border European Commission initiative to promote mutual sustainable development and economic competitiveness through achieving an integrated and cross- border economic, social and environmental development. • The Programme aims to facilitate collaboration on the development of mutual ICT and transport infrastructures and co-operation on environmental and retail issues and the provision of education and other public services. (1) • 14 new projects were announced in May 2011 including – the reconstruction of the road between Killingi-Nõmme, in Estonia, and Mazsalaca, in Latvia; the DELBI initiative to help small and medium enterprises and start-ups access the cross-border market, as well as facilitate cross-border partnerships in different fields; and the FoodArt project, which aims at strengthening the ties between the rural food producers and gourmet restaurants. (2)Source 1: The Estonia-Latvia Programme, March 2010, 2: The Estonia-Latvia Programme, May 2011,
  134. 134. Retail Trends Retail sales, international comparison - US$bn 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015Romania 45.1 59.5 67 54.8 53 55 60.1 66.6 74.7 84.4 Sources: Planet Retail; Economist Intelligence Unit.
  135. 135. Retail Trends • The Q311 Business Monitor International (BMI) Romania Retail report forecasts that the country‟s total retail sales will rise by 18% between 2011 and 2015, growing from a predicted RON20.70bn (US$8.26bn) in 2011 to a forecast RON24.48bn (US$9.77bn) by 2015. • Continuing wage growth, the consumer lending boom and rising disposable income following the introduction of a new flat rate of income tax are key factors behind retail market expansion. • Romania‟s privatisation process since 1990 and EU membership since in 2007 have allowed retailers to make significant inroads into the market, contributing to forecast annual retail sales growth of 4.2% in local currency terms.Source: Market Research, 27/05/2011,
  136. 136. Retail Trends • Retail sub-sectors that are likely to experience strong sales growth over the period include over the counter (OTC) pharmaceuticals, which BMI predicts will total US$0.73bn in 2011 and grow by nearly 37% to US$0.99bn by 2015. • Vehicle sales are forecast to reach 128,368 units in 2011 and grow by 32%, to 169,496 units, by 2015.Source: Market Research, 27/05/2011,
  137. 137. Retail Innovation Romania
  138. 138. Retail - Lithuania
  139. 139. Retail - Romania
  140. 140. Eurozone Scenarios• Debt spiral• Default• Recovery
  141. 141. Supermarket Convenience Stores
  142. 142. 11 Retail Trends for 2011 1. Customers in control 2. Value and values 3. Death of discounting 4. Authenticity (and Fauxthenticity) 5. Vintage retail 6. Store as experience Centres 7. This time it‟s personal 8. The return of Premium 9. Constantly connected 10. All kinds of commerce 11. Considered, 20/12/10,
  143. 143. Top Retail Trends - 2011 1. Customers in control Power is shifting from manufacturers to retailers, and now to consumers, and now “shoppers are beating retailers at their own game”. Technology is driving this trend with price comparison sites and deal of the day apps and e-shopping 2. Value and Values Value has been the megatrend in retail for the past few years, but customers are starting to demand that retailers also espouse “values” such as CSR. We‟re developing a more sophisticated understanding of value. Consumers traditionally confused “value” with “price”. Consumers are becoming less price sensitive and more attuned to quality goods and good, 20/12/10,
  144. 144. Top Retail Trends - 20113. The Death of Discounting Corollary with trend #2. Percentage-offpromotions are running out of puff and discounting is not proving soeffective. In 2011, the answer will lie in engineering real value intoproducts and services in the first place, carefully and inventivelyadding value during promotional periods, and constructing new, morecreative (and fun) ways to grab a bargain – such as allowing shoppersto club together to get a better deal. 4. Authenticity (and Fauxthencity) – cookie cutter retail concepts won‟t work with consumers who‟ve seen it all a million times. Consumers in 2011 will increasingly look for distinctive, “real” retail experiences. Brands with history will be rewarded for innovative store and fit out design and if you don‟t have a narrative – make one up!, 20/12/10,
  145. 145. Top Retail Trends - 20115. Vintage Retail – You can already see this trendemerging with numerous stores and it will gathermomentum in 2011. In Japan (often ahead of thecurve in fashion terms), Kinji is a major (and cool)pre-loved clothing chain, and Book Off is amassive second hand books, manga and CDretailer with 866 stores across the country. 6. Store as Experience Centres – Physical retail needs to play to their strengths versus the online retailers (who have myriad advantages - fast and efficient to browse, compare + purchase) by delivering an experience to shoppers. These should be high tech, highly tactile and designed to create buzz. Apple is a pass master at this sort of experience design, 20/12/10,
  146. 146. Top Retail Trends - 20117. This Time it‟s Personal –Customisation is a growing trend.Having something that is „yours‟not „theirs‟. Nike has been leadingthe way in this department sellinga large number of customisablefootwear and apparel lines. 8. Return of Premium – Luxury retail is coming back. However, retailers can no longer expect to put a logo on something and expect to sell. Products will have to be well-considered, well-crafted, designed to last, have a story to tell and are represented in a stunning physical space in order for consumers to, 20/12/10,
  147. 147. Top Retail Trends - 20119. Constantly Connected – Smart phones have allowedpeople to be constantly connected. The trend is growingrapidly for shoppers to price check and purchase fromtheir mobile phones in stores. The Wall Street Journalreported in November 2009 that shoppers using theirmobiles in stores accounted for a mere 0.1 per cent ofvisits to retail websites. In 2010 it was 5.6 per cent, anincrease of 50 times. 10. All Kinds of Commerce – The future is in allowing the consumer to purchase when and where they want to. Whether using traditional (in-store) commerce, e- commerce, m-commerce (mobile), f- commerce (Facebook), s-commerce (social) and v-commerce (video-enabled, e.g.. YouTube)., 20/12/10,
  148. 148. Top Retail Trends - 201111. Considered Consumption – this defines the post financial crisis consumer. Thedays of mindless consumption are gone, and with them the promise of endlesslyrising comparable store sales. The consumer in 2011 is more of a rational consumerweighing choices and seeking value and the best deal. This is a challenge but aspreviously stated good products, well marketed will still, 20/12/10,
  149. 149. Retail 2020PwC has set out its vision for retail in 2020• Environment an important factor – green retailing now a must for the customer and regulator.• Individualised service – service and in-store experience are moving away from one-size-fits all approach. It is now designed with specific target groups in mind as shopper are a highly differentiated demographic – working women, baby boomers, singles, teenagers etc. etc. Tesco Clubcard, Footlocker US‟ „House of Hoops‟ – Service is set to ‗become an even more finely calibrated proposition between retailer and customer. And service components will evolve increasingly from reactive to predictive as retailers battle to win the loyalty of an ever-elusive—and more fragmented—customer base.‘• Going from Growth – growth in terms of „multiplicity of geographic, online and format offerings,‟. The needs of the consumer are at the heart of this trend. – Tesco again cited with reference to it convenience store strategy in the US and its meticulous approach to researching its customersPwC Retail in 2020, [no date],
  150. 150. Growth of Online Retail
  151. 151. Distance Selling
  152. 152. Global Direct Retail Sales (US Bn $)WfDSA, 04/02/11,
  153. 153. Global Salesforce Size 1998 – 2009 Millions of PeopleWfDSA, Global Sales Force, 04/02/11,
  154. 154. Source: CEE Retail, July 2011
  155. 155. Retail – Czech RepublicThe Czech Republic‟s May statistics on the retail trade reveal that:• sales in retail trade including automotive decreased at constant prices by 0.7%, month-on-month• working days adjusted sales increased by 1.4%, year-on-year• Y-o-y increase of non-adjusted sales by 3.2% was influenced mainly by the development in “wholesale and retail trade; repair of motor vehicles and motorcycles” and non-food goods.• Retail sales via mail order houses or via Internet increased for the nineteenth straight month (+21.0%).• Sales growth was recorded for sale of clothing, footwear and leather goods in specialised stores (+9.8%), retail sale of information and communication equipment in specialised stores (+9.3%), retail sale of cultural and recreation goods in specialised stores (+7.8%), dispensing chemist, medical and orthopaedic goods, cosmetic and toilet articles in specialised stores (+5.1%), and retail sale of other household equipment in specialised stores (+3.4%).• Food was sold less both in retail sale of food, beverages and tobacco in specialised stores (-2.8%) and in retail sale of non-specialised stores with food, beverages or tobacco predominating (-2.5%).• Retail sale in non-specialised stores sales decreased by 0.9%. Czech Statistical Office, 04/07/11,
  156. 156. Retail – Estonia Retail sales volume index of retail trade enterprises and its trend, January 2002 – April 2011 (2005 = 100)Statistics Estonia, 31/05/11,
  157. 157. Retail – Estonia• In April, the retail sales of goods by retail trade enterprises were 315 million euros (about 5 billion kroons).• Sales on manufactured goods increased by 10% on 2009.• Sales increased across all industries bar pharmaceuticals and cosmetics.• In April, the retail sales in non-specialized stores increased 18% on 2009 figures.• Stores selling household goods and appliances, hardware and building materials and other specialized stores increased retail sales 13% and 12%, respectively.• The retail sales in stores selling textiles, clothing, footwear and leather goods that had been in fall since the beginning of the year, turned to a rise again in April, growing 6% compared to April of the previous year. Statistics Estonia, 31/05/11,
  158. 158. Retail - LatviaLatvia Statistics Office, 28/01/11,
  159. 159. Retail - LatviaLatvia Statistics Office, 28/01/11,
  160. 160. Retail - LatviaLatvia Statistics Office, 28/01/11,
  161. 161. Retail - Latvia• Compared to 2009, retail trade turnover at constant prices in 2010 has reduced by 2.2%. Retail in food products declined by 5.3% and non food items by• Compared to November, total retail trade turnover calculating at constant prices in December 2010 has decreased by 1.4%. Retail trade of food products has decreased by 1.9%, but retail trade of non-food products diminished by 1.2%. Latvia Statistics Office, 28/01/11,
  162. 162. Retail - Latvia• Compared to December 2009 total retail trade turnover in December 2010 increased by 8.1%, according to working (trade) day adjusted data, calculating at constant prices. Non-food product group sales increased by 11.9%. Retail trade of food products grew by 1%.• In comparison with 3rd quarter of 2010, retail trade turnover according to seasonally adjusted data at constant prices in 4th quarter of 2010 has reduced by 0.4%. Enterprises selling mainly food products turnover decreased by 2.4%. Retail trade turnover in companies selling mainly non- food products grew by 0.7%.• Compared to the 4th quarter of 2009, retail trade turnover in 4th quarter of 2010 rose by 7.2%, according to working (trade) day adjusted data. Retail trade turnover in enterprises selling mainly non-food products increased by 10.7%, but in enterprises selling mainly food products – by 0.8%. Latvia Statistics Office, 28/01/11,
  163. 163. Retail - Lithuania• The turnover of Lithuania‟s retail trade, wholesale and retail trade and repair of motor vehicles and motorcycles enterprises (VAT excluded) was 2.7bn LTL ($1.121bn) in May 2011• This is a 4.1% increase in retail sales in same period 2010 Lithuania Statistics Office, 06/11,
  164. 164. Retail – RomaniaAdjusted retail sales in Q1 2011 fell by 5.4% on the same period last year.Consumption fell across all sectors:• Food sales fell 10.2% on the year in the first quarter• Fuel sales were down 6%• Non-food sales down 2.4%• Compared with March 2010, Romanian adjusted retail sales decreased by 5.8% However,• A Romania Retail report from Q1 2011 forecasts that the country‟s total retail sales will rise 14% between 2011 and 2014, from a predicted RON20.65bn (US$8.24bn) in 2011 to a forecast RON23.62bn (US$9.43bn) by 2014.• The report credits this potential growth to continuing wage growth, a recent consumer lending boom and rising disposable income following the introduction of a new flat rate of income.• Romania‟s privatisation process since 1990 and EU membership since 2007 have allowed retailers to make progress, contributing to forecast annual retail sales growth of 4.1% in local currency terms.BMI Romania Retail Report, 11/10,
  165. 165. Retail - Romania• Although the population is forecast to decrease slightly, from 21.4mn in 2011 to 21.1mn by 2014, GDP per capita is predicted to grow 42.7% by 2014, reaching US$10,494.• Consumer spending per capita is expected to increase from a predicted US$5,005 in 2011 to US$7,411 in 2014.• The proportion of the population classified by the UN as economically active was 70.1% in 2005 and an estimated 70.7% in 2010.• Retail sub-sectors that are likely to experience strong sales growth over the period include over-the-counter (OTC) pharmaceuticals, which BMI predicts will total US$0.6bn in 2011 and grow by more than 39% to US$0.84bn by 2014… – This could be boosted by factors such as EU membership, privatisation of the pharmaceutical industry and the consolidation and improvement in operating conditions in retail and wholesale.• …and automotive sales. The BMI report believes that the Romanian automotive market has large untapped potential and will grow from an estimated US$4.68bn in 2011 to US$8.33bn in 2014, a rise of 78%. At that time sales are expected to reach 290,000 BMI Romania Retail Report, 11/10,
  166. 166. New Products The Romanian ‘iPad killer’ • Romanian company Televoice officially launched last week under its Evolio brand the Neura tablet which it is positioning as a serious competitor for the Apple iPad. • “Our tablet is an iPad killer since it offers more at a similar size and for a fair price. This proves that Romanians too can launch a high technology product with exceptional performance onto the market,” said Liviu Nistoran, CEO of Evolio.Source: Business Review, 01/08/2011,
  167. 167. New Products• “We estimate sales of 4,000-5,000 Neura units in Romania by the end of the year. We will reach approximately half of the iPad market share, with the prospect of exceeding this level in December,” said Nistoran. “We are in discussions with retail outlets in Bulgaria, Hungary and Poland to distribute the tablet.”• The website has received orders from the United States, United Kingdom, Germany, South Africa and Venezuela.• The tablet runs on the Android 2.2 operating system and is now available in local retail stores around Romania.
  168. 168. Slovakia - RetailStatistical Office of the Slovak Republic, 06/11,
  169. 169. Retail Slovakia Turnover in retail trade Year Turnover in retail trade (Million Euro) 2000 9224,1 2001 9995,6 2002 10 886,9 2003 10 746.4 2004 11 810,3 2005 12 805,4 2006 14 116.4 2007 15 152.2 2008 16 743.8 2009 17 441.2 2010 17 249.1Statistical Office of the Slovak Republic, 28/06/11, 11/07/11
  170. 170. Retail Innovation SlovakiaUniCredit will be distributing MasterCard branded cards to enable contactlesspayment to their customers for use at more than 3000 contactless cardacceptance point throughout Slovakia.• UniCredit is the first to implement such a service in Slovakia• Payments over 20 euro will require an authorisation PIN.• The system will be in place in fast food restaurants, supermarkets, cinemas and other retail outlets across SlovakiaSource: Near field Communications World, 11/07/11, 12/07/11
  171. 171. Retail Innovation RomaniaGerman discount grocer Rewe Group obviously believes that Romania is arobust potential market for discount retail. Rewe plans to open an additional 20„Penny‟ stores in the country on top of the 100 it already operates after 2010results showed a 4.3% Increase in turnover. (1)An indigenous success story are Romania‟s wine makers who scooped over 40prizes in the Decanter, International Wine challenge (IWC) and the InternationalWine and Spirit Competition (IWSC), a record level of express.(2)The success comes on the back of the creation of the La Umbra wine brandlaunched by Halewood Romania. The launch follows significant investment, theuse of International varieties and the implementation of internationalwinemaking techniques. (3)(1) Just-food, 24/03/11, 12/07/11(2) Talking Retail, 04/07/11, 12/07/11(3) Talking Retail, 08/12/10, 12/07/11
  172. 172. The Eurozone crisis - 3 Scenarios• Baseline – the situation in 2011 so far…• The initial issue of the European Financial Stability Facility (EFSF) was well received and the emergency meeting of Eurozone heads of government grudgingly agreed to increase the size of the EFSF/ESM both as measures to reassure investors• After what amounted to the failure of its debt auction in early April, Portugal realised that the future costs were unsustainable.• The new European Banking Authority has started the 2011 round of bank stress tests, but stated that banks do not need to make provisions against Eurozone government bonds held in their „banking book‟.• will investors be able to add back their own assumptions of losses and test the capital strength of the banking system?• Will this reveal the fatal flaw in the process?• Eurozone governments have committed to preparing contingency plans for the results of the formal tests, but they are unsure whether these will convince investors of sovereign and bank solvency.• There is also the problem of banks that face a failure of a major counter-party in the inter-bank or derivatives market.
  173. 173. Scenario 1 – Inflationary Debt Spiral • Finance ministers gut the Commission‟s already weak economic governance proposals, and so make it clear to investors that collectively the Eurozones governments are unwilling or unable to enforce serious fiscal discipline. This weakness may become all too apparent from the probable stand-off with the European Parliament and the ECB. • Capital flees the Eurozone and short and long-term interest rates rise significantly in an attempt to prevent the import of rising inflation as the euro weakens. Extra interest costs add extra strain onto budget deficits and locks in the debt spiral.
  174. 174. Scenario 2 - Default• Finance ministers and the European Parliament agree tough governance package• But at an risk state rejects the harsh measures called for and baulks investors leading to default . Steadier states fear a domino effect in other weakened states• Potential losses are vast as demonstrated by the stress tests and we see a spate of bank nationalisations.• Some Eurozone members leave the EU and revert to their past currencies, based on large and overly competitive devaluations• Fury in other Eurozone states quickly leads to the breakdown of the political and economic union.• The EU ceases to operate as an organised political system
  175. 175. Scenario 3 – Federal Eurozone Emerges• A strong, federal „Eurozone‟ emerges.• Eurozone members conclude that it is in their best interest to avoid a collapse of the euro and decide that anything and everything must be done to save it• They agree an economic governance package that goes well beyond the Commission proposals and helps steady the bond markets.• Tougher regulation ensures that the banking system will not become over-exposed again.• Members agree a vastly engorged EU rescue fund• At risk states will be encouraged to take assistance at an early stage rather than when disaster is at door• Collective guarantees ensure recovery in the bonds market• Europe becomes a little insular in this period, focusing on getting its house in order, enlargement is put on hold and relations with non-Eurozone members are cooled.• After a couple of years members finances have improved sharply and the Euro strengthens, reducing the risk of importing inflation and improved regulations reduce the risk of a repeat o f the crisis
  176. 176. Supermarket ‘Convenience’ Stores • It‟s well over 10 years since Tesco Express and Sainsbury‟s Local first opened their doors, and Waitrose have just opened their first „little Waitrose‟. • Critical to understand how shoppers needs differ in this new retail environment. • These convenience stores are changing the ways on which people are shopping – 45% of food brought in a supermarket convenience store is consumed immediately – 15% of shoppers are in store to buy something they need urgently as they have run out – bread shoppers for example will spend less than 25 seconds at fixture in a convenience store so POS needs to be extra simple and impactful. Associated products need to be in reach as few shoppers will look round the whole store.Source: him! Research and consulting, 2011,
  177. 177. Supermarket ‘Convenience’ Stores• The art of convenience stores is getting people in and out as quickly as possible having bought everything they came for.• It is also very important to get shoppers to buy „just one more item‟ as this often represents a „30-50%‟ increase in basket size.• A convenience store shopper is not price sensitive. Fewer than 50% of supermarket convenience shoppers check the price of an item before buying and 2/3 shoppers will pay more in convenience stores that they would in the supermarket• 62% of customers walk to the store so bumper pack offers and volume promotions are less relevant.• Staff upselling can have a greater impact in the convenience store. Him! Say that promotional penetration can triple when a staff member tells the shopper about a promotion Source: him! Research and consulting, 2011,
  178. 178. Race to the Middle• The UK high street (and elsewhere in the developed world) is facing hugely challenging trading conditions at present.• Debenhams is one retailer which might have been expected to find the going tough. However it‟s recently released result suggest otherwise and this is not merely down to their clever management team and product mix research• Debenhams is often bracketed with Marks & Spencer and Next in the mass market end of the middle market. At present this seems to be the place to be in the market. The squeeze on incomes that is hurting the retail market is being felt most keenly by the value end of the market. Those in the middle are holding up ok.• The hardest hit are those on the lowest incomes and much of their spend goes on consumables (food, petrol etc.) leaving little discretionary spend. As a result value supermarkets are doing well. Retail week, 04/07/11
  179. 179. Race to the Middle• Spend on fashion is largely discretionary however and the market has not seen the movement toward the value end as they have in the grocery sector. When people do spend they want quality at a good price and as a result the middle of the market is prospering Retail week, 04/07/11
  180. 180. Luxury Retail EuropeEurope‟s share of the global $238.9bn market inluxury goods rose to 37% in 2010 from 35% in2004(1)• The growth in the market is largely based on Asian influences, based on soaring numbers of high spending visitor, particularly from China.• Many high end retailers are reinvesting in Europe with boutiques springing up in Paris, ItalyConsultancy Bain & Co raised its 2011 growthforecast for luxury sales to 8% after recent salesdata from groups such as LVMH and Burberry (2)• Bain estimates that luxury sales will grow 5- 6% in 2012 and 2013. – This growth is expected to be driven by buyers in emerging markets, Europe and the US (1) WSJ, 23/03/11, 12/07/11 (2) The Guardian, 03/05/11, 12/07/11
  181. 181. Luxury Retail Eastern Europe2010 luxury goods sales figures continued a downward trend in EasternEurope.Sales in the first half of 2010 dropped by as much as 30% in some sectors.(1)• Automotive sales were hardest hit with sales drops of approx. 30% in Romania, Bulgaria, Serbia, Hungary and Ukraine. The Czech Republic suffered a smaller decline• Jewellery and watch sales also suffered, seeing declines up to 15% in all markets• Luxury fashion declined by up to 10%(1) CPP-Luxury, 03/10/10,
  182. 182. Innovation – Czech Republic• Classed among the moderate innovators with innovation performance below the EU27 average• Rate of improvement above that of the EU27.• Relative strengths in Firm investments, Innovators and Economic effects• Relative weakness is in Throughputs.• Over the past 5 years Firm Investments and Throughputs have been the main drivers of improvement. In particular from strong growth in: – S&E and SSH graduates (18.1%) – Venture capital (26.6%) – Private credit (13.6%) – Broadband access by firms (20.1%) – Community designs (24.5%) – Technology Balance of Payments flows (14.5%).” European Innovation Scoreboard, 2009,
  183. 183. Innovation – Czech Republic
  184. 184. Slovakia - Innovation
  185. 185. Estonia - InnovationEuropean Innovation Scoreboard, 2009,
  186. 186. Estonia - Innovation• Estonia classed as an innovation „follower‟ just below EU average• Rate of improvement above EU average• Relative strengths in Finance and Support, Firm Investments, Linkages & Entrepreneurship and Innovators• Relative weakness in Throughputs• Over the past 5 years Firm Investments and Throughputs have been the main drivers of improvement. In particular from strong growth in: – Business R&D spend (20%) – Non R&D innovation spend (29.3) – Community Trademarks (14.5%) – Technology Balance of Payment flow (16.9%) European Innovation Scoreboard, 2009,
  187. 187. Latvia – InnovationEuropean Innovation Scoreboard, 2009,
  188. 188. Latvia – Innovation• Classed as a catching-up country with performance well below the EU average• Rate of improvement above EU average• Relative strengths in Human resources and Finance and support• Relative weaknesses in Linkages & entrepreneurship, Throughputs and Innovators• Over the past 5 years Finance support and Throughputs have been the main drivers of improvement. In particular from strong growth in: – Public R&D spend (12.5%) – Private credit (15.4&) – EPO patents (17.8%) – Community trademarks (35.9%) – Community designs (21%) European Innovation Scoreboard, 2009,
  189. 189. Lithuania – InnovationEuropean Innovation Scoreboard, 2009,
  190. 190. Lithuania – Innovation• Classed as a moderate innovator with performance well below the EU average• Rate of improvement above EU average• Relative strengths in Human resources, finance and support and Linkages and entrepreneurship• Relative weaknesses in Firm investments, Throughputs and Innovators• Over the past 5 years Human resources, Finance and support and Throughputs have been the main drivers of improvement. In particular from strong growth in: – S&E and SSH doctorate graduates (14.8%) – Private credit (21.5%) – EPO patents (15.5) – Community trademarks (26.8%) European Innovation Scoreboard, 2009,
  191. 191. Romania - InnovationEuropean Innovation Scoreboard, 2009,
  192. 192. Romania - Innovation• Classed as a growth leader among the catching-up countries with performance well below the EU average. But…• Rate of improvement that is one of the highest of all countries• Relative strengths in Innovators and Economic effects• Relative weaknesses in Finance and support and Throughputs.• Over the past 5 years Finance and support and Throughputs have been the main drivers of improvement. In particular from strong growth in: – Public R&D spend (18%) – Private credit 25.8%) – Broadband access by firms (46.7%) – Community trademarks (34.5%) – Community designs (37.3%)• Performance in Firm investments, Linkages & entrepreneurship, Innovators and Economic effects has increased at a slower pace European Innovation Scoreboard, 2009,
  193. 193. Slovakia - Innovation• Classed as one of the catching up countries with performance well below the EU average• Rate of improvement above EU average• Relative strengths in Firm investments and• Economic effects• Relative weaknesses in Finance and support,• Linkages & entrepreneurship, Throughputs and Innovators.• Over the past 5 years Finance and support and notably Throughputs have been the main drivers of improvement. In particular from strong growth in: – Broadband access by firms (33.3%) – Community trademarks (34.1%) – Community designs (19.1%) European Innovation Scoreboard, 2009,
  194. 194. Online Retail Growth Forecast Online retail in EU and US expected to achieve double digit growth to 2015 • At a 10% Compound Annual Growth Rate (CAGR) to 2015 the US online retail market will would grow to $279bn. • In Western Europe a 10% CAGR would see the market reach a value of 134bn euro • By 2015, 68%of online adults in Western Europe will have made a purchase online; the figures for Northern and Southern Europe are 80% and 50% respectivelyBizCloud, 12/07/11, 12/07/11
  195. 195. NFC in Czech Republic• Telefonica Czech Republic, Komercni banka, Citibank Europe, Globus CR and VISA Europe have launched a pilot project to trial contactless mobile payments with real customers in the Globus hypermarket in Prague.• The new technology carries over the functions of a classical payment card to a mobile telephone SIM card. The modern trend further improving the payment safety and comfort is coming to the Czech Republic. The payment card application on a SIM card should become part of the standard offering in 2012.• The six-month project was launched July 22nd 2011, it will collect information about the actual use of the contactless mobile payments and prepare the commercial launch of this service. Two hundred customers of Telefonica and Citibank and two hundred customers of Telefonica and Komercni banka will participate in the project, they can use the new technology at the tills of selected Globus hypermarkets - in Chotikov u Plzne and in three Globus hypermarkets in Prague (Cerny Most, Cakovice and Zlicin). Source: TMC Net, 2011
  196. 196. NFC in Czech Republic• The payment application recorded on Telefonica SIM cards was provided by the card association VISA Europe.• Over 260 million terminals are expected to be available for the NFC payments globally in 2014. The advantage of the NFC enabled handsets lies in particular in improving the comfort and intuitive use of payments. The payments are simple and safer and the same time, as users have permanent control over their devices. Source: TMC Net, 2011
  197. 197. Distance Selling• 88% of Czech retailers that were selling their products or services in other EU countries said they also actively advertised their products or services to consumers in other EU countries. Source: Europa, 2011
  198. 198. Digital Signage in Romania • Cisco has announced the deployment of Cisco Digital Signs at Unirea Shopping Centre, one of the largest retail complexes in Bucharest. • At Unirea, Cisco Digital Signs, part of the Cisco Digital Media Suite (DMS), are used to provide a centralised streaming of graphics and video over the Internet Protocol (IP) network to 85 wide-screen displays located across the mall. • The Cisco Digital Signs solution is used to run in-mall advertising for tenants. It helps the mall operator create a differentiated offer, retain a rental premium, and generate new revenue streams. • Carmen Adamescu, president and chief executive officer, Unirea Shopping Centre, said: "Unirea stores are keen to advertise their products, and in-mall advertising is probably the best way to reach customers in a targeted way. “Source: Retail Technology Review, 14/07/2011, g
  199. 199. ‘Scan It’Scan it is a product from Motorola. Its is used by the Dutch grocer Ahold in aselection of their stores in Sweden, Belgium, the US and the CzechRepublic.(1)• The system allows shoppers to scan and bag their groceries as they go using a handheld device.• While increasing throughput the device also allows retailers to advertise to the shopper through the handset. The device commonly shows shoppers what‟s on sale, enticing greater spend per shopper. – Ahold says that shoppers using scan it spend approximately 10% over the averageAhold has now created a smartphone app version of Scan It. it is trialling in thestates and shows the evolution of the product from launch in the US in 2007(2)(1) Kezi News, 27/06/11, 12/07/11(2) Ahold, [no date],, 12/07/11
  200. 200. Mobile Commerce
  201. 201. Near Field Communications
  202. 202. Mobile Contactless Payments TrialIn mid 2011 Komerční banka, Citibank Europe, Globus ČR, VISA Europe andTelefónica O2 Czech Republic are due to launch a project trialling mobilecontactless transactions (1)• The project hopes to learn about how people actually use contactless payment• The CR is thought to have wide potential for such technology• Consumers are expected to use the technology to pay for inexpensive items in particular. If the cost of the good exceeds a predetermined limit then the customer is asked to enter a verification code.Contactless payment is increasing in popularity in the CR. On the back of theGlobus trial McDonalds is considering installing the technology in its stores –they are waiting for their provider UniCredit bank to introduce the system instores. (2)(1) KB, 24/03/11, project-to-take-off-in-mid-2011-1191.shtml 12/07/11(2) CzechTrade, 02/06/11, 12/07/11
  203. 203. Fits.MeFits.Me is a virtual fitting room for online retailers. The technology has beendeveloped at two Tallinn based universities and a German company providinganthropometrical data.(1)• “Lack of a fitting room is the biggest problem for apparel eCommerce. is helping clothing retailers increase the sales, and decrease costs associated with returns”• Fits.Me has designed a robotic mannequin that exactly replicates the buyers dimensions and allows the buyer a far better preview of how the items will look when delivered. It is hoped the technology will help to increase sales and minimise returns(1) Fits.Me, [no date] 12/07/11
  204. 204. Fits.MeThis has come to the market on a backdrop of surging online sales. A reportfrom Forrester Research noted that online sales of apparel, accessories andfootwear reached $27bn in 2009 on 17% year-on-year growth. Double digitgrow this forecast for online apparel sales over the next several years.―Online apparel sales to date have been exceptionally challenging due to thelack of a fitting room. However, it is also the fastest growing e-commercecategory and will produce an estimated annual revenue of $31 billion dollars inthe US in 201. Only 8% of clothing is currently sold online, and VirtualFitting Room is the disruptive technology that will enable online apparelretailers to successfully compete with traditional brick-and-mortar clothingshops.‖ - Heikki Haldre, CEO and co-founder of Fits.meFits.Me, 22/12/10, 12/07/11
  205. 205. Image Sources p.1Page1. Clockwise 1. 2. 3. 4. 5. 6. 7. Clockwise 1. 2. 3. 4. 5. Clockwise 1. 2. 3.