The retail store of the future and strategies for growth dominate agenda on second day of the Summit
PARIS, Thursday 19th June 2014 – After another day of industry-leading presentations the second day of The Consumer Goods Forum’s Global Summit has come to an end. Today’s focus has been around the future of the retail, disruptive technology and eCommerce, and retail strategies for growth, with leaders from across the globe providing insights on how to create value and connect with consumers in today’s environment.
Innovation and disruption
Professor Tedlow, Professor Emeritus at the Harvard Business School kicked off day two with a look at the ‘age of disruption’ and asked what type of companies will continue to exist in the future. In this talk, Professor Tedlow discussed whether the physical store will soon be redundant, with online shopping growing at 15% per year and services such as Amazon Prime and Google Shopping Express coming into the market. He believes that in the age of disruption, only those who make ‘big bets’ on their future will succeed.
To provide a real-life example of the new disruptive retail space, Doug Herrington, Vice President Consumables at Amazon, then looked at how businesses should innovate on behalf of their customers. He outlined how the evolution in online is similar to the changes in offline many years ago – new formats for shopping are emerging and consumers now have multiple shopping patterns – which drives the need for continued innovation. Mr Herrington closed his session by urging the industry to focus on end customers as opposed to retail customers, and plan for not what can be accomplished in the next year, but what can be accomplished in the next decade.
Also this morning, Entrepreneur and Founder of Rocket Internet, Oliver Samwer, gave a passionate talk about the future of retail. Smartphones have turned every person into a potential online consumer, and it is now software, logistics and payment systems that are the critical enablers of eCommerce Mr Samwer said. He proposed that the consumer of the future will not want to use a physical store, and that younger generations will be solely focused on mobile – shopping neither in-store or on websites. Additionally, developing markets will provide significant opportunities and challenges for retailers, with Mr Samwer stating that emerging markets will not follow the same evolution as mature markets, but will instead ‘leapfrog’ physical retail and move straight to digital.
The in-store experience
With a different perspective, Mark Price of Waitrose and the John Lewis Partnership, showed how the in-store experience can provide great value to consumers. Paramount to this is a strategy of ‘new’ and ‘free’ which Mr Price says are the two most important words in retail. He concluded that the market is polarising into companies who either provide experience and differentiation or value and low prices – an idea also mentioned by Professor Tedlow – and the winners will be retailers who can clearly define and articulate which one they are.
This was followed by an animated discussion on new models for connecting with consumers, with Oliver Samwer of Rocket Internet; Doug Herrington of Amazon; Mark Price of Waitrose and the John Lewis Partnership; and Erin Hunter, Global Head of CPG Strategy at Facebook. These industry leaders debated the relevance of online and physical stores and how to meet the needs of the consumer of the future.
Independence and international growth
Highlights from the afternoon session include the presentation from Serge Papin, Chief Executive Officer of Système U in France, on what makes independent retailers successful and the session from Michael T. Duke, Chairman of the Executive Committee of the Board of Directors at Walmart on insights from a long career in retail.
Mr Papin discussed the benefits of being an independent retailer, including their ability to be adaptable and enable workers to pave their own future and become the head of their own business – attracting young workers who are interested in the freedom an independent business provides.
To conclude the day, Mr Duke of Walmart offered advice on successfully expanding a retail business, and emphasised the importance of ‘local’ to retail. He explained that businesses need to appreciate the importance of the local market when expanding internationally, and adapt their merchandising strategy to suit. Mr Duke also spoke about the importance of the store in the new retail environment, saying that digital, eCommerce and retail need to be intertwined, with technology integrated in-store.
Peter Freedman, Managing Director of The Consumer Goods Forum, commented: “Today’s agenda took a deeper look at how developments in digital and online are having a big impact on our industry, as new technologies and new entrants to the market disrupt traditional retail and shopping patterns. We know that consumers expect to be provided with an experience that is fast, convenient, and as advanced and innovative as possible. Although it’s not easy, businesses need to look at how they can meet, and exceed, these expectations, whether online or in-store. I’m excited by the enthusiasm that the presentations and panel discussion have inspired”.
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About The Consumer Goods Forum
The Consumer Goods Forum (“The Forum
”) is a global, parity-based industry network that is driven by its members. It brings together the CEOs and senior management of some 400 retailers, manufacturers, service providers, and other stakeholders across 70 countries, and it reflects the diversity of the industry in geography, size, product category and format.
The Forum member companies have combined sales of EUR 2.5 trillion. Their retailer and manufacturer members directly employ nearly 10 million people with a further 90 million related jobs estimated along the value chain.
The Forum is governed by its Board of Directors, which includes 50 manufacturer and retailer CEOs and Chairpersons.
The Forum provides a unique global platform for knowledge and best practice sharing around the following strategic priorities: Sustainability, Product Safety, Health & Wellness, End-to-End Value Chain & Standards, which are central to the advancement of today’s consumer goods industry.
The Forum’s mission is, “Bringing together consumer goods manufacturers and retailers in pursuit of business practices for efficiency and positive change across our industry benefiting shoppers, consumers and the world without impeding competition”.
To fulfil this, its members have given The Forum a mandate to develop common positions on key strategic and operational issues affecting the consumer goods business, with a strong focus on non-competitively sensitive process improvement.
The Forum’s success is driven by the active participation of the key players in the sector who together develop and lead the implementation of best practices along the value chain.
With its headquarters in Paris and its regional offices in Washington, D.C. and Tokyo, The Forum serves its members throughout the world.
For more information contact:
Fergus Campbell, GolinHarris International
Lee Green, Senior Communications Manager, The Consumer Goods Forum