Retailers must innovate and embrace new technology to capture consumer spend in the post-slowdown era. This was a clear message that emerged during the opening session of the 2010 edition of the World Retail Congress in Berlin. Across the board, panellists agreed that in 2011, there would be reasons to believe in retail.
Sir Stuart Rose, chairman, Marks & Spencer, said, “Technology, among other things, is enabling companies to expand rather than posing a threat to them.”
Dr Ira Kalish, director, Global Research, Deloitte, said he did not think there would be a double dip and predicted slow growth for 2011. He said in recession countries, consumers were deleveraging and paying down debts while saving more and spending less. “High unemployment in the US is causing uncertainty in the market and will result in a reduction in consumer spending,” he added.
Kalish believes the demographics in India mean that the country’s market has the opportunity to grow rapidly and in Brazil the rising number of middle-class people will stimulate an increase in consumer spending.
Gertrude Tumpel-Gugerell, member of the executive board, European Central Bank, said, “There will be positive underlying momentum of the recovery in the Euro area. Positive consumption is expected to display moderate growth due to weak labour markets, low growth in compensation to employees, higher savings due to economic uncertainty and subdued house prices.”
She further said consumption should, however, benefit from real market developments due to higher profitability and decline in inflation and a lower degree of net tightening of credit standards.
Maintaining that retailers have got to be more efficient, Rose said, “Efficiencies can be made through technological advancements, better products and making sure consumers can easily get their hand on what they want.”
Mindy Grossman, CEO, HSN, expanded on this and said, “In the current economic climate, retailers need to have clarity of branding and be willing to invest in new technology.” She believes it is also important that retailers are able to understand the consumer-centric mindset and are able to target them in a way that engages them – particularly when interacting with them online.
Phillip Schindler, vice president, Northern & Central Europe, Google, described the internet as a “revolution” and said with 1.9 billion people online, retailers need to harness the opportunities.
He said the amount of data online has exploded, and most consumers now access that data via searches. “Over 60 per cent of retail sales are significantly influenced by what people are doing online,” he added.
Stressing that the use of mobile phones is also crucial for retailers, Schindler said, “Thirty per cent of US adults have used a phone in-store to compare prices or look up information. The mobile phone is the next wallet.”
Rose said, “You have to treat online as your friend, and ignore it at your peril. Retailers need to be better with technology and that they have a lot of work to do on product innovation.”
He said online would be the “advance guard” for M&S’s international expansion, and that consumers want endless options, so “if you’re not in the options game, you’re a loser”.
Heinz Krogner, chairman, Esprit Holdings, said “The internet is already our biggest store, but we face problems going to new markets with the internet because we are not known. We have to build up the brand awareness too.”
Issues ranging from the business of sustainability to company ethics feature strongly on the 2010 Congress agenda.
– IndiaRetailing Bureau