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 | <strong>InsideOutdoor</strong> | <strong>Spring</strong> 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
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