where will retail be in 10 years from now?

1. RETAIL 2020
A GLIMPSE INTO THE FUTURE OF RETAILING
Bangalore Retail Association

2. We have heard the hype…
And in India…
• Consumers:
Blogging
Supply chain M-commerce
– understanding the customer will cause
victory
• Merchandising:
– provide the right products at the right
price will beat the competition.
• Talent
– retention, and providing growth
• Real Estate:
Forecasting
Scientific retailing
Loyalty management
RFID
Social
Analytics
media
Customer centricity
Bio-metric
Middle class
– will cause an upper hand in running a
successful operation in India.
• Supply Chain:
– needs to be conquered
• Policy
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3. Last some years
It has been like a long train wreck over the disastrous few years
• Early warnings:
– Starbucks store closings and
consolidation
– Walgreens sales dropping
• Around the globe - store
closings and bankruptcy
•
•
•
•
Disastrous trading results
Intractable customers
Information asymmetry
Discord between business
strategy and technology
– JC Penny starting to look like
the newest victim
– Reliance continues to open
and close stores
– Subhiksha has vanished
– Others have struggled to
integrate (e.g. Aditya Birla
Retail)
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4. We have also seen
Supply chain
Increasing,
growing
pressure on
supply chain.
Right size,
optimize.
Customer
discretion
Customers are
becoming
increasingly
difficult to
please.
Demand
Driven, not
merchandise
driven
Environment
Technology
Slimming
margins
Environmenta
l pressures
keeps
increasing
Technology is
rapidly being a
disruptive force,
and allowing
hitherto
unknown
players to play
Margin
pressures keep
mounting even
though the
worst of the
recession is
past
Running a successful retail operation is now more difficult than ever before
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5. What really matters
Location, Location, Location
Share of
wallet
Share of
decision
Renewing of
brand
Leveraging
of brand
Changing
consumer
Global
perspective
The shape and levers in retail have already started to change, forever
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6. Vision 2020
Media Convergence
Web 3.0
Green Retailing
Social Media
Customer Centricity
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M is the new e
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7. Vision 2020: technology
• Advent and progress of the
web
– Web 2.0 itself has brought in
simplicity to human interface
– The gradual creeping in of web
3.0 type interfaces will further
revolutionize the way people
make purchases
• The world is a much smaller
place, thanks to technology,
communication and human
mobility
– Each of these has an impact
on the way retailing is done
– Retailer’s outlook needs to be
global in nature
• Convergence of media
– Will continue to play a major
part with same information
available through hand-held
devices, computers,
televisions, and household
devices
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8. Vision 2020: social media
•
If you
thought
facebook,
twitter, lin
kedin etc
were
passing
fads, thin
k again!
•
•
•
•
•
•
•
Social media has overtaken porn as #1 activity on the web. And
porn as an industry (on the web) did not do that well in 2009.
1 of 8 couples married in the US last year, met via social media
More people follow Ashton Kutcher and Ellen Degeneres than
the combined population of Ireland, Norway and Panama
Over 200mn blogs, 54% bloggers post or tweet daily. 78%
people prefer peer recommendations, than search engine
results. Only 14% trust advertisements and TV commercials.
If Facebook were a country, it would be the 4th largest, though
China’s Q-zone is larger. >1.6Mn pieces of content are shared on
Facebook, daily!
80% of twitter usage is on mobile devices.
Youtube is the 2nd largest search engine in the world. 34% post
opinions about products and brands
35% book sales in the US are already on Kindle. News is now
pushed, to you. Same is about to happen to products, and
brands.
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9. Vision 2020:
Green Retailing – beyond plastic
M
is the new
e
•
•
•
•
•
Various reasons for mobile commerce
not to have been successful in the
past
iPhone brought in a revolution of
sorts
Faster networks, better security helps
Smarter identity management
Prominent in the developing world
bags
• Initiatives from the retailers:
– Curbing waste, reducing packaging
– Better use of energy
– Tightening route planning, reducing
distribution trips
– Reducing product miles
• Expect regulations to come in
• Carbon credits are already a tradeable commodity. Will have a larger
economic implications.
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10. Vision 2020: through the looking glass
• Retailing would have changed forever.
• Physical store-fronts would have changed
too.
• Shopping will be 24X7X365, Always Open.
• Replenishments will happen automatically,
in many cases.
• Marketing, advertising would have taken a
new shape completely.
• Will be difficult for larger stores not to be
click-and-mortar.
• Store within store depending on area of
expertise.
• Potential for biometrics again.
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11. …and in India
• Watch for internet penetration in
Tier II & III cities
Internet user base penetration (%)
2000
2009
Top 8 Metros
77
34
Other metros
13
18
Non-metros
10
48
• Retailer chains will
have to take
advantage of
mutual synergies
• New capital advent,
and consolidation
• Wake up, and
outsource.
• Expect NE-India to
play a part in CRM
• Considerable
dependence on
social media
o Rapid rise in internet penetration
in school children even in remote
areas
o Those are your future customers
• Inevitably
– Retailers will start supplying
(at least to themselves)
– Suppliers will start retailing
– Quality labor shortage at
lower compensation points
will continue
– New-age retailers will take
advantage of the above
– Many more MNCs with
franchise models
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12. Where do we go from here?
1
Value remains critical, but
not enough
Connect brand with customer emotion
2
Knowledge of shopping
behavior
Knowing your customer, intimately
3
Battle for shopping trips
Striving to maintain the shopping trips
gained during recessionary times
4
More than just a transaction
Leverage unique bond of trust if gained in
the past
5
M-commerce
Get on the bus, quickly. It will be a gamed
changer, the way was in the past
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13. Where do we…(contd.)
6
Outside the box
Brands must participate in digital
conversation that surround decision making
7
Share of wallet
High performers will maximize the share of
wallet of their profitable shoppers
8
Developing markets
Large opportunity in developing markets gaining
loyalty, causing economic transformation
9
Long term vision
Think short terms Vs long term, sustain
brand equity
10 Slim profit margin players
Retailers with such business models will
cause disruption
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