Retail pundits predict 2016 and beyond
The US tech billionaire, who is currently trialling drones for home delivery and who wants industry to be off-planeted into outer space so that Mother Earth can lick her wounds, says he would prefer the question: "What's not going to change in the next ten years?"
His reasoning for finding the second question more important is as impeccable as it is counter-intuitive: "Because you can build a business strategy around the things that are stable in time."
Hopefully, the trade gurus who ponder the future here will also make us think outside the box.
As in previous years, our newspaper asked them: "What do you see as the most significant/exciting development in retailing/the fmcg industry and the most important challenge for the future?"
Their answers are given below in alphabetical order of surname:
Professor Joshua Bamfield, Director, Centre for Retail Research, Newark Beacon Innovation Centre, UK:
We feel that the most significant development has been the growth in mobile retailing in every European country, resulting in between 40 to 70 per cent of all online visits to major retailers being made on smartphones and tablets.
The most important challenge for the future is for retailers to ensure data security against attack, both for themselves and to maintain the privacy of the personal and financial details of customers. Failure to deal with this issue will impose massive reputational damage upon affected retailers and undermine the guarantees they make about the integrity of their e-commerce operations."
Dagmar Bottenbruch, business angel investor and consultant, Kronberg/Germany:
Amazingly, some companies (e.g. in the automotive or finance sector) still have not figured this out. Food companies have to be transparent about their sourcing and, particularly when it comes to animal-derived products, have to be prepared to respond to consumers' growing demands for knowledge about how animals are treated.
Additionally consumers are becoming much more sensitive about the sustainability, seasonality and regionality of the products they purchase. Producers and retailers are responding, but these growing trends could have an impact on sourcing."
Professor Utho Creusen, Positive Leadership, Ingolstadt/Germany:
This needs to be integrated and balanced again with the traditional way of managing their companies. Mastering the change from multi-culture to omni-culture under one roof will be the key to business success in the future.
'Good old' successful and experienced managers will also have to learn to manage different cultures within their companies in a different way. This unfortunately isn't something they can learn from leadership seminars and training courses, but only together with the next generation of managers.
And such managers will have to learn real fast, otherwise they will soon be gone."
Mark Curtis, Chief Client Officer, FJORD, Design & Innovation from Accenture Interactive, Dublin:
We expect the liquid expectation phenomenon to continue, as we see it bleeding into government and the workplace and shifting expectations in both.
We see an accelerating evolution of services moving toward faster delivery in smaller chunks of activity and content, enabled by APIs (Application Programming Interfaces) and the rise of platforms. The disappearance of apps into platforms is one manifestation of this; the democratization of luxury is another.
Simplification and smaller interfaces will seek to hide things just as virtual reality creates a whole new rich layer."
Tim Harrap, Head of Collaboration, Lye Cross Farm, UK:
This, of course, is also the challenge for the future. Whilst mergers and acquisitions grow apace in 2015, the corporate edifice is boxing itself into a corner. The big beasts are not necessarily approved of by the consumer who sees them as lacking in ethical traits such as delivering social sustainability.
No longer can the retailer and marketer play the ringmaster to the supplicant consumer, i.e., a consumer of the retailers' 'spectacle'.
Following from the work of Claire Bishop on the changing nature of participation in art, participation acts as a useful metaphor for the myriad relationships in the fmcg world.
Today, with the increasing collaborative nature of business, politics and culture, brought about through the emergence of social media, the art object (brand), the artist (corporate entity) and the audience are reframing their relationships.
The so-called 'participatory art' seems a challenge facing producers, retailers, brand managers and consumers alike. It is political in the broadest sense – the genie is out of the bottle. As time goes by, people are creating their own 'spectacles' and the relationship is two-way – at a minimum in a networked society."
Ibrahim Ibrahim, Managing Director, Portland Design Associates Ltd, London:
F&B will also be at the heart of the future collect experience which will increasingly be an experiential 'concierge'-type service.
Integration will take two forms. F&B will be more integrated within retail districts where restaurants and cafés will be planned adjacent to shops in order to encourage impulse shopping while customers eat and drink.
A second form of integration will be F&B as part of the store in order to create a hybrid shopping experience. As retail outlets become less about transctions and more about stories, brand immersion, sharing and personalisation, customers will increasingly demand a more socially enjoyable shopping experience.
F&B integrated within the shop can deliver this.
Retailers could render this type of experience in partnership with F&B operators through sub-letting space in their stores."
Uwe Klenk, CEO+Founder UK & Partners Group, ex Senior Executive Walmart International, Budapest & Vienna:
Food & drink companies therefore need to focus sharply on rapid changes in the public mood as well as in perception and values. They must also have an uncompromising commitment to quality and value. Brand reputation is earned in a lifetime, but lost in a day.
Mobile now makes up the majority of digital ad spending (52 per cent) with total spend predicted to reach $6.7bn. As two in three consumers now shop across multiple devices, it will become increasingly imperative to create a good user experience on all platforms.
Direct publisher deals are going to be programmatic. Spending on private marketplace (PMP) ad solutions rocketed by 381 per cent in 2015. Despite this growth, only 14 per cent of retail digital display ads are served through such a solution. PMP provides opportunities to market in a brand-safe, guaranteed, and viewable way throughout industry campaigns.
Video is rapidly becoming the most engaging marketing tool online. 29 per cent of the digital display spend in retail will be for video advertising, and ad execs believe that the ability to target video content is the 'most valuable digital advertising feature' for their clients.
When video is so ubiquitous and social strategies to segment audiences and personalize digital targeting are so powerful, it would surely be wise to invest digital ad spend in this space.
Closed-loop attribution is the next logical step. 15 to 20 per cent of retailers use multi-touch attribution vendors, and a further 20 to 25 per cent are in active discussions with such providers.
Spending all one's digital media dollars on one platform, thus creating marketing convergence, could be the way forward for marketers as it provides greater control over the message and the atmosphere where the ads are served."
Dan Murphy, Partner, Kurt Salmon UKI Ltd, London:
Despite the embarrassing online collapses in November/December 2014, this year has seen similar web performance crashes and home delivery meltdowns as retailers continue to promise far more than they can ever hope to deliver.
Too many retailers believe that they can offer super-fast and convenient online shopping and same-day delivery – all for a £3 delivery charge. In the frenzied race for online market share, retailers are building up crippling operational costs.
Of course the numbers simply don't add up, which is why it all collapses when vast numbers of online customers click the buy button simultaneously.
At some point retailers have to grasp this nettle and confront the real costs of delivery against the online promise. Those who continue to insist that they can offer the speed of online shopping and the convenience of super-fast delivery, all for free, surely cannot survive much longer."
Essentially companies need to answer two questions. First, how are you going to handle e-commerce in a way that supports your brand and fulfils your value equation? And second, how can you enhance the in-store experience so that shoppers will eschew the convenience of point & click to visit your stores?
There's no easy answer to either question, but any company not already carefully considering how to respond and succeed is getting farther behind the curve. More than ever the challenge is to do something special, important and distinct.
Inaction is simply not an option."
Bill Webb, Senior Lecturer-Retail Management, The London College of Fashion; UK member, The Ebeltoft Group of Global Retail Experts:
Together the Community will design, create, supply as well as consume products, services and experiences, and the Community will build reputations for the brand. To be effective, the transparency and efficiency of all operations will be paramount.
This vision, already apparent in lifestyle brands such as Nike, Lululemon and Rapha where the Community concept is made explicit, will percolate down to the mainstream."
Julian Wild, Partner, Corporate Finance for Rollits LLP, Hull/UK:
Click & collect is a partial solution, as is home delivery, but the cost of maintaining superstores, some of whom stay open 24 hours a day, is a big headache."
Clive Woodger, Chairman, SCG International, London:
The challenge of attracting and retaining the best staff, while at the same time losing many low-skilled jobs to technology and robotics, are major issues for retailers across all sectors.T his will be increasingly vital for companies wanting to differentiate themselves through optimum service while striving to achieve maximum performance.
Effective Employer Branding is the new priority."
A happy, healthy, wealthy and imaginative 2016 to all!