Spring - InsideOutdoor Magazine

ource: Newgistics
of retail from TNS Retail Forward and PricewaterhouseCoopers.
And everywhere one looks, it’s technology of some
sort that is a key enabler, cause or requirement of the
coming changes. Specifically, that includes technological
advancements in the areas of connectivity and
collaboration (wireline and wireless), customer and
real-time data mining and management, predictive capabilities
and multimedia. A bit further down the road
await a few emerging technologies such as biometrics,
including facial, voice and fingerprint recognition; iris
and retinal scanning; and self-activated agents that will
perform routine tasks without human intervention.
“Technology will be 72% pervasive in 2015,” researchers
from TNS Retail Forward and PricewaterhouseCoopers
92%
predict. “Falling costs, widespread availability and adoption
of devices, a working infrastructure and standardization
will accelerate the integration of technology.”
Indeed, in the retail reality of the next decade, technology-based
platforms and solutions that are considered
the “gold standard” today will move closer to
mainstream adoption levels, the study suggest. That’s
true even for small to mid-sized retailers, for whom
technology traditionally has not been a top priority, as
the emphasis behind tech investments continues to shift
from being a means of increasing efficiencies to being a
key asset for customer retention and business success.
At the core, of course, is the Web and Internet protocol,
or IP, which often is thought of as simply meaning
“on the public Internet,” yet IP means so much more.
One big reason why Internet technologies will become
vastly more important is because “e-commerce” represents
the only way for many retailers without a global
footprint to compete globally. And make no mistake, the
rapid ascent of the middle-class in developing countries
around the global is where most everyone expects largescale
growth to come
38%
from during the next several years.
Assuming that barriers to global 82% trade continue to
come down, while developing
44%
markets continue to
phase out restrictions on foreign retailer operations and
liberalize regulation of direct foreign investment, retailers
in 2015 “will do business in a true global economy
– global customer base, global sourcing, global outsourcing
pool, global reach,” the TNS and PwC study
predicts. “Global scope will be a necessity, not an option,
to grow the top line and bolster the bottom line.”
All the while, global sourcing will become a critical
component of differentiated assortments at competitive
price points.
Retail issues in developed markets around the
globe, meanwhile, “basically will be a mirror image of
issues confronted by the U.S. economy – aging populations,
shrinking share of retail spending and increased
spending on healthcare,” says PwC and TNS Retail
Forward. “In contrast, populations in developing
markets will remain relatively young and will increase
share of retail spending.”
ikelihood of shopping again if returns
re CONVENIENT
3%
3%
2%
2%
6%
10%
ource: Newgistics
20%
ikelihood of shopping again if returns
re INCONVENIENT
ports Internet Sales
0.0%
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
14 | InsideOutdoor | Spring 2008
Developing markets, meanwhile, will continue to
build their pool of university-educated labor and talent,
say analysts, shifting the nucleus of knowledge
workers. “Trend-spotters will want to set up camp in
developing markets, especially Asia, which will begin
to eclipse developed markets as a hotbed of cultural
and retail market influence,” argue PwC and TNS Retail
Forward analysts.
“Most major retailers will be out of expansion room
in the United Retail States Formats for with their Below core concepts Average by Sales 2015,” Growth
they warn. In other words, very few formats will grow
at a rate exceeding the overall retail sales growth rate,
10
and most areas will experience slowing rates of growth
8.2%
compared to earlier in the millennium, according to forecasts
from the U.S. 6.5% Department of Commerce. “Players
8
5.9%
will need to turn elsewhere for growth—new 5.5%
6
concepts,
4.7%
new customer segments,
4.7% 4.6% 4.9%
new geography, 4.4% 4.3% new 4.2% categories,”
4says PwC and TNS Retail Forward.
3.5% 3.9% 3.5%
4.3%
2.6%
2.6% 3.1%
That’s not the best news for U.S.-based companies
looking 2 to expand globally, as large European retailers
already have a bit of a head start when it comes to
operating 0 on an international scale.
And going global is not just about large scale growth.
-2
In many ways, what makes the Internet’s much ballyhooed
long tail worth wagging is the affordable access
-4
it provides to geographic expansion, since that is precisely
what Source: facilitates Newgistics “economies of small-scale,” so to
speak. In other words, global scale may be the only way
Non-auto Retail Sales Growth Around the Globe
Russia
15.4%
Nigeria
12.8%
Turkey
Indonesia
Vietnam
India
Philippines
Argentina
China
South Africa
Thailand
Mexico
Malaysia
Brazil
Spain
Australia
United States
South Korea
Canada
Poland
United Kingdom
Belgium
Netherlands
Taiwan
Italy
France
Sweden
Germany
Switzerland
Japan
11.2%
10.6%
10.4%
10.4%
9.7%
9.6%
8.9%
7.9%
7.7%
7.2%
7.1%
6.6%
6.0%
5.7%
5.2%
5.1%
4.7%
4.6%
4.1%
4.0%
3.6%
3.6%
3.0%
2.9%
2.8%
2.2%
1.3%
0.8%
0 5 10 15 20
Source: OECD and TNS Retail Forward