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Retail2020 - Forecast for the future of Retail
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Retail2020 - Forecast for the future of Retail
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 © copyright delhigate educomm. All rights reserved. delhigate educomm & KOOLSKOOL logos are registered trademarks. 2
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) © copyright delhigate educomm. All rights reserved. delhigate educomm & KOOLSKOOL logos are registered trademarks. 3
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 © copyright delhigate educomm. All rights reserved. delhigate educomm & KOOLSKOOL logos are registered trademarks. 4
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 © copyright delhigate educomm. All rights reserved. delhigate educomm & KOOLSKOOL logos are registered trademarks. 5
6.
Vision 2020 Media Convergence Web
3.0 Green Retailing Social Media Customer Centricity © copyright delhigate educomm. All rights reserved. delhigate educomm & KOOLSKOOL logos are registered trademarks. M is the new e 6
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 © copyright delhigate educomm. All rights reserved. delhigate educomm & KOOLSKOOL logos are registered trademarks. 7
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. © copyright delhigate educomm. All rights reserved. delhigate educomm & KOOLSKOOL logos are registered trademarks. 8
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. © copyright delhigate educomm. All rights reserved. delhigate educomm & KOOLSKOOL logos are registered trademarks. 9
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. © copyright delhigate educomm. All rights reserved. delhigate educomm & KOOLSKOOL logos are registered trademarks. 10
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…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 © copyright delhigate educomm. All rights reserved. delhigate educomm & KOOLSKOOL logos are registered trademarks. 11
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 © copyright delhigate educomm. All rights reserved. delhigate educomm & KOOLSKOOL logos are registered trademarks. 12
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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 © copyright delhigate educomm. All rights reserved. delhigate educomm & KOOLSKOOL logos are registered trademarks. 13
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