December 27, 2016

Retail pundits predict 2017 and beyond

Trade pundits predict 2015 and beyond (photo:
In ancient times when the priestess Pythia presided over the Oracle of Apollo at Delphi, interpreting the future was big business. Little has changed since then; we just call our soothsayers consultants. Then, as now, we urgently need to demythologise the often sibylline answers today's highly-paid experts give to the overhyped mystery of things to come. The best way to predict the future is, of course, to make it yourself. The next best thing is to interpret what the movers and shakers are doing as the minnows will usually follow the Tritons. In retrospect, the future may have looked unfathomable to most contemporaries, but often turns out to be little more than a continuation of existing trends that should have been glaringly obvious to all concerned at the time. So perhaps we should look at what is in order to know what will be. But do the trade gurus we have asked to ponder the future agree?
December 22, 2016

A Christmas look at retailing in NYC and Europe

A Christmas drone (caricature: Oliver Sebel)
Santa goes cyber
In case you hadn't noticed, it's nearly Christmas and surely a time to be a little less formal. One of the pleasures of being a journalist is the broad variety of people you get to meet. These range from bolshie trade unionists, blowing whistles and ranting about the evils of private equity, to sleek, narcissistic CEOs. Fortunately, there are positive exceptions in both categories. One also has one's colleagues, who, as with most publications, include a remarkable number of eccentrics. Then there are some infectiously enthusiastic stringers, like Werner Prill and Christian Lattmann, who have just returned from whistle-stop store tours in New York City viz. Europe. Both were astonished that we wanted to put their photos online as neither of them claims to be a professional photographer, but in our opinion the odd shaky or underdeveloped picture makes for authenticity. Want to have a peek?
December 20, 2016

Amazon go forces staff to go

Still taken from Amazon go's videoclip (artwork: Gudrun Kiender)
Ever young, beautiful and with a smartphone: Frame from the promotional video of Amazon go
At first blush it looks like progress. Next month Amazon will go public with a pilot convenience shop that has no checkout lines or cashiers. The beta model for the new "Amazon go" store is currently being tested by company employees in hometown Seattle. A corporate video explains the concept: Sensors and articifial intelligence detect what shoppers take from the shelves and add each item to a virtual cart. The price of the goods is then debited from their smartphone when they leave the store. If the "Just Walk Out" technology is implemented by Amazon for bricks & mortar retailers or is copied by them, checkout-free stores will obviously have a positive impact on their P&L. Like most employers, retailers, whatever their highly paid CEOs may say to the contrary in public, generally see their staff as a cost rather than as an asset. So they are likely to embrace the new idea with open arms. But it is surely also a tacit admission of failure.
November 29, 2016

Otto delivers faster screen shot (photo: Lebensmittel Zeitung)
Help from big data: Otto delivers more products to online customers in two days
Thanks to technology, retail distribution is getting faster and faster. Ecommerce retailer Otto Group provides a good example. The Hamburg-based company is now using Blue Yonder software to deliver brand products to customers faster than ever before. This means that even items not stocked in large quantities at corporate warehouses can still reach the customer within two days. Otto is expanding the implementation of Blue Yonder's predictive applications to an increasing number of business processes. The retailer has already employed artificial intelligence by Blue Yonder for a number of years for the optimization of purchasing and stock storage processes as well for 'dynamic pricing'. But now Otto is using Blue Yonder as an intelligent order solution for products with high stock turns where the multichannel retailer would normally only contact the manufacturer after customers purchase online.
November 18, 2016

Amazon Fresh builds pick-up store in Seattle

US eagle with a burden (photo: passengerz/Fotolia)
Eagle has landed
It's certainly counter-intuitive. Amazon has become big and brawny through being mean and lean. While traditional bricks & mortar retailers remain encumbered with their physical store bases, the US online giant has soared through cyber space like an eagle. So why is Amazon Fresh going offline in Seattle and experimenting with a drive-in? Could the tech star be on the verge of clipping its prime competitive advantage? Or is the project just another laudable example of the way US companies fearlessly progress by trial & error? Meanwhile, retailers can only hope Amazon doesn't conclude that they charge far too much for their often grim customer service and depressing store ambience. As there is no point in asking the secretive and opaque behemoth for more information about its ultimate intentions, let's take a sneak peek at what exactly the company is building in its home town.
November 11, 2016

Eurelec goes shopping for Rewe and Leclerc

Michel-Édouard Leclerc, President Leclerc, & Alain Caparros, Rewe CEO
French connection: Michel-Édouard Leclerc and Rewe boss Alain Caparros like shopping together in Brussels
It was only a little letter from a small office in Brussels, but it has sent a big shockwave through the industry that could revolutionise the way retail groups do business with their major suppliers. The sender, Eurelec Trading Scrl, opened for business in June as a cooperative joint-venture between Rewe und Leclerc. Its function as a European buying office is to obtain the best possible terms & conditions for these German viz. French retail giants. Logically, Eurelec has started its annual negotiations for 2017 with the big boys. We understand that there were originally six international brand manufacturers involved, but now only four: Mars, Mondelez, PepsiCo and SCA. Apparently, they have been asked to come to a decision by the end of this month, and it is generally believed that they will accept. Eurelec seems to have detailed knowledge of the terms & conditions these suppliers accord retailers on both sides of the Rhine. So has there been collusion between Rewe and Leclerc in contravention of EU cartel law?
November 10, 2016

Aldi loosens up

Sergeant major (photo: Dario Lo Presti_Shutterstock)
Get soft, now!
There has been a sudden disappearance of ties within the ranks of German discount retailer Aldi. "Our company is open to the world," says one manager by way of explanation. After all, when a retailer constantly modernises its stores and operations, why not trendy-up the appearance of your staff? This will surely also make one seem more attractive as a potential employer to a rapidly declining number of young job seekers. The move, however, is far more revolutionary than it sounds because perfect ties have always been part of the uniform for men at Aldi. "They even used to keep them on in Australia when it was 40 degrees Celsius," says one astonished supplier.
November 10, 2016

German retailers and the Trump card

Statue of Liberty (photo: Andrea Izzotti_Shutterstock)
In God we trust
Times have just got a lot tougher for Latinos, Muslims, Blacks and all women who don't look like Barbie dolls. Perhaps they will appear better to unemployed steelworkers in the Rust Belt if they seriously believe that a billionaire businessman, happy to use cheap labour and Chinese steel, is really their best friend. But times certainly look good for middle-aged men with arresting hairstyles. As the media debate 'Trumponomics' and the moods of the man the world's most powerful nation intends to entrust with the nuclear attack code, may we ask whether president-elect Donald Trump will be good or bad for German retailers?
November 3, 2016

Aldi goes online in the Middle Kingdom

Young Asian child with piggy bank (photo: DONOT6_STUDIO/Shutterstock)
Saving in Asia: Aldi wants to make a cultural contribution
Nín hǎo, Aldi, a nation of savers awaits you! Germany's most profitable discounter is opening an online shop in the People's Republic of China. The privately-run company is using Australian subsidiary, Aldi Stores, as a springboard for entry. A number of Australian suppliers have apparently already been briefed on the packaging and labelling requirements for The domain name was secured by the Mülheim-based retail giant a number of years ago and now bears the strapline "Handpicked for you". So when can more than 415 million Chinese online customers ignite their firecrackers and perform the dragon dance?
September 29, 2016

Year 1 for Hudson's Bay Company and Kaufhof

Jerry Storch and Olivier van den Bossche
Transatlantic anniversary: HBC boss Jerry Storch and Kaufhof CEO Olivier Van den Bossche (second and third from the left)
Take a retail segment in terminal decline on a mature market; add a structural crisis in the inner cities; mix it with some local mismanagement; add a dash of dubious international investment; and what have you got?: the tragicomic world of the German department store. It was therefore with mixed feelings when one learned exactly a year ago to this day that Canada's leading department store operator Hudson's Bay Company (HBC) had purchased Metro Group's unloved daughter Galeria Kaufhof for €2.9bn, including debt. After all, the German trade had only recently experienced Nicolas Berggruen's bizarre and fateful purchase of rival Karstadt. And the last 20 years bear witness to a string of failed foreign investors from Walmart to Marks & Spencer. It seemed at the time as if HBC was dashing into the abyss like a troop of Canadian Mounties in a snowstorm. Twelve months later, our newspaper received a formal invitation to brunch at Galeria Kaufhof head office in Cologne. The principal hosts were Gerald (Jerry) L. Storch, CEO of HBC, and Kaufhof boss Olivier Van den Bossche. Was it all to announce a happy first anniversary, or a rapid return flight to the other side of the Pond?