In the recently published McKinsey study "The Internet of Things (IoT): Mapping the Value Beyond the Hype", the retail industry is ranked fourth in highest potential next decade IoT economic impact.
McKinsey defines the retail environment broadly "as physical spaces where consumers engage in commerce—considering or purchasing goods or services. This includes traditional stores, such as department stores and grocery stores, as well as showrooms where goods are on display but not available for sale. It also includes physical spaces where services are purchased, such as bank branches, theaters, and sports arenas. The analysis covers only physical environments where IoT technologies can be deployed, not online retailing."
One of my favorite annual industry reports is AT Kearney's Global Retail Development Index (GRDI). The recently published 2015 edition was titled "Global Retail Expansion: An Unstoppable Force".
The GDRI ranks the top 30 developing countries for retail investment. If you are a global retail leader, it is a must read to navigate opportunities in emerging markets.
China is the number one country in the 2015 GDRI report and it is the only country that has appeared in the top five consistently for the last five years. By 2018, China will surpass the United States as the world's largest retail market. China e-commerce sales grew 50% to nearly $450 billion in 2014, including $150 billion in mobile sales. E-commerce sales are predicted to reach $1 trillion by 2019.
Being passionate about the subject, every year I look forward to the BrandZ Top 100 Global Brands report. 2015 marks the 10th annual edition and over that time period brand value has increased 126% to $3.3 trillion. In the last year alone, brand value has increased 14%.
This week's post summarizes the top 10 apparel, luxury, general retail category trends and extracts key research insights. I will end with some personal observations on the future technology driven evolution of brand value.
In Rome earlier this month had the pleasure to speak once again to 100+ business leaders from Central, Eastern Europe, Scandinavia, Russia, the Middle East and Africa. Building on the positive response to a similar presentation last year in Budapest, this year's focus was on the latest global retail industry data and hints again at its impact on the future of retail.
Summarizing the key content:
"The future will be won by retailers who are bold enough to innovate and adapt and creatively leverage the amazing potential that technology and calculated risk taking will unleash in 2015." - Jeff Roster, Gartner
The 25th Annual Retail Technology Study, which is one of my favorite industry documents, was recently published by RIS News. This year's report was appropriately titled "Retail Transformed: An Inspired Vision to Innovate Differentiate, and Accelerate."
As Joe Skorupa, RIS News Group Editor in Chief, points out, "retailers are going through a transformative phase, the scope of which has not been seen since the first “Retail Technology Study” in 1991. It is pioneering new methods of customer engagement that will explode in the future and building out true cross-channel experiences. These developments are setting the bar high for retailers who need to catch up to fast-moving millennial and omnichannel shoppers who hold the keys to retail’s future."
In this year's report, for me personally, two sections stood out in critical importance for retail in 2015 and beyond.
In March, I had the pleasure to speak at the GS1 Hong Kong "14th Efficient Consumer Response Asia Pacific Conference & Exhibition". This post summarizes some of my favorite musings on brick & mortar stores / online sales, Asia consumer trends, Internet of Things, and the Future of Retail.
Supermarket format growth will plateau by 2020 both in Europe and APAC. Most of APAC will skip the hypermarket wave, which is showing decline in early evolution. Hard discounters like Aldi and Lidl are adapting to convenience format and Asia yet to see a hard discounter. Etailing in Asia already ahead of evolved markets like Europe. -Damien Veilleroy, Metro Cash & Carry
APAC traditional trade (unorganized retail) is surviving the onslaught of modern trade by adapting their model. What stayed: close and personal consumer connections, credit services, home delivery, and in-depth knowledge of neighbor. And what's new: close-door set up, focus on hygiene, aisles, more premium products, use of technology, third party support, and aggressive marketing. - Damien Veilleroy, Metro Cash & Carry
Recently spent some time in Hong Kong and was fascinated by the vibrancy of the city, the intensity of the crowds, the retail shopping frenzy, and more importantly how 7 million people are concentrated in such a small space. The observations led to several questions on future technology themes and how they get interwoven into a metropolis such as Hong Kong:Where is Hong Kong on the Internet of Things (IoT) "Smart City" journey? Will the "Smart City" ever connect to the "Smart Retail Store"? What are some of the potential breakthrough applications at the intersection of a smart city and smart store?
In the security industry, source tagging is the process of embedding an Electronic Article Surveillance (EAS) label into the primary packaging or into the product itself at the point of manufacturer to protect the item from shoplifting. This advancement in retail security emerged over 20 years ago and today it continues to experience substantial growth.
According to the latest Global Theft Barometer, 63% of worldwide retailers are planning to maintain or increase their focus on source tagging. Regionally, the percentage of retailers maintaining or increasing their focus on source tagging is as follows:
This week's post summarizes some of the latest mobile research, discusses retail adoption patterns, and provides data driven hints where additional mobile disruption will emerge.
Summarizing key data from the Boston Consulting Group (BCG) study on the growth of the global internet economy:Mobile internet penetration worldwide has doubled from 18% in 2011 to 36% today; by 2017, mobile access will exceed fixed-line access, with 54% penetration compared with 51%. Some 60% of the world’s population is now covered by 3G connectivity. The EU has 90% 3G coverage. The U.S. has 96% 4G coverage. Even Mount Everest is online—with 4G connectivity at 17,000 feet.
January's USA National Retail Federation (NRF) trade event, several industry studies, and major deployment progress with key retailers point to a brighter future for RFID.
RFID is a key driver of delivering a successful onmichannel retail strategy. As defined by Kurt Salmon at NRF 2015, "for consumers, onmichannel means a seamless experience that offers the same products, engagement capabilities, and level of service regardless of how, where, and why they interact with retailers. Common goals include: Increase revenue per customer; Increase purchase frequency; Expand consumer base; Increase market share; and improve consumer experience / satisfaction."