last edition of World Retail Congress
24 Sep. 2012
SI’s exclusive report on the 6th World Retail Congress
Last week, from 19th – 21st September, this year’s World Retail Congress, hosted at London’s Excel Exhibition Centre, closed its doors. In its 6th edition, the annual event gathered the global retail elite to network and debate on shifts in the retail landscape. About 1100 delegates from 50 countries listened to key note sessions, interactive business streams and in-depth discussions on stage.
The Congress kicked off with a speech by Ira Kalish, Director of global economics Deloitte, who highlighted a wide-ranging global economic outlook and influencing conditions on international retailing – with nothing slowing growth in China and the US and citing emerging markets with high potential. Ita Kalish said, “I see that we have a more intelligent consumer empowered by technology, whilst we also have emerging markets with great demographics, rising middle classes and a growing working age population across India, the Middle East, Latin America and Asia”.
This rapid change by online revolution, with mobile and social commerce, has an immense influence on the role of the physical store. The changing face of retail; questioning what role the physical store will play for the next generation of shoppers, was a strong debate on last weeks agenda. CEO of Saks, Steve Sadove stressed that, “There was a lot of speculation that the internet would destroy stores, but that’s simply not the case. The synergy between the two channels provides a more powerful experience. It’s important to retain the brand position and we remain committed to our stores!” In addition to its flagship stores in the US, Saks also opened stores in the Middle East and will soon launch a new store in Kazakhstan. Consensus was that a personalized service and the shopping experience were the two most important reasons why customers shop in the store.
‟Retail is all about entertainment! If you’re not entertaining your customer, there is no reason for them to come and visit you! We create a unique and special place for our customer with a
Deloitte’s consumer business specialist, Alison Kenney Paul, stressed that retailers need to re-evaluate their future store counts and footprint strategy. This was a result of a Deloitte study, showing that retailers expect the percentage of sales generated by traditional brick- and-mortar stores to significantly decline from 91% to 63% over the next five years. Yet, according to a research for World Retail Congress, conducted in August 2012, stores remain the clear primary channel for retail growth. Retailers expect to increase their number of domestic stores over the next 12 months by almost 63% and 52%. With the consumer’s adoption of new technologies, Kenney Paul urged to weave the virtual world into the physical store. A recent study showed that about 42% of shoppers use smartphones for fashion-shopping related activities at least once in the last year.
Furthermore, the necessity of developing a seamless multi-channel strategy in store, as well as online and mobile shopping, marked other big headlines of the congress.
“Our 20 year old customer has been brought up in a digital world and buys up to 50% of their clothes online!” Nick Robertson, CEO Asos questions the role of stores. The fashion retailer reported an overall sales increase by 45.7% in 2011/2012, benefitting from the company’s global free shipping and the launch of sites in further countries.
Many retailers like John Lewis, Adidas, Debenhams or Marks & Spencer stressed that multi -channeling is central to their retail strategy. Laura Wade Grey, multichannel and e-commerce director, announced that by the end of the year, Marks & Spencer will be trading online in 10 countries- but didn’t say in which countries the websites will be launched. CEO Philip Clarke stated, “Digital does not just offer smart new ways to shop. It gives the opportunity for a warmer, more meaningful conversation with our customers, colleagues, local communities, and the suppliers working with Tesco.”
Further panels included Adam Bain, President of Global Revenue Twitter - said that Retail ranks high on interest with 36% on Twitter. Jonathan Ramsden, Executive VP Abercrombie & Fitch and Dieter Holzer, CEO Tom Tailor, both debated on tailoring the business model to the market. And Karstadt CEO, Andrew Jennings, expressed that a clearly communicated strategy and overall vision were key for a successful retail turnaround.
Before revealing international plans and its first UK store opening within the next year, J.Crew, CEO Mickey Drexler warned about the level of promotion in the fashion market and stressed that there is a lot more discounting and competition than ever before. “People don’t care about the goods, but more about the numbers. I see much more copying and less creativity. It shouldn’t be about beating the clock, but to think long-term as public company.” Steve Sadove, CEO of Saks added that luxury retail should also not influence the brand experience or its status through discounting, but alternatively think about a more personalized, more targeted and individual way to address the consumer.
The congress ended Friday, with an extensive insider-report by UK- based Leo Burnett Group, on how people shop through the lens of 6 different shopping archetypes, highlighting different behavior patterns of shopping modes, needs and touch points.
Next year’s annual World Retail Congress is taking place from October 7th to 9th, 2013, in Paris. The third Congress for the Asia Pacific region in Singapore will run in March 2013.
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