Retailing is a tough business to be in. For nearly five years, many markets around the world have had to contend with economic turmoil which, if anything, is growing more uncertain and more challenging. But if this doesn’t make it hard enough for retailers, there is the second storm hitting them at the same time in the shape of the digital revolution.
So not only are retailers having to completely re-shape their businesses in the face of slowing consumer spending and rising costs, but they are also having to adjust to a new way of retailing where consumers expect to shop their brands across a multitude of channels offering the best prices, effective technology and fantastic service in terms of availability and delivery time.
With the 2012 World Retail Congress looming ever closer, it is tempting to say that these twin forces have been affecting retail for some time. However, in building this year’s programme and talking to retailers across many different markets, there is a sense that the pace of change and the scale of the challenges are growing faster and bigger. Retailers are driven by the need to find growth in sales from new products, new formats or new markets or all of these.
Over the life of the World Retail Congress since its launch in 2007 we have seen the growing importance of the so-called emerging markets in helping deliver much of that growth for domestic and international retailers. And yet, since the congress last met in Berlin in September 2011, even this has begun to change. Vitally important markets such as China have been hit by the global economic downturn with falling order levels through their factories which in turn has led to the Chinese government realising that it has to build and serve its own consumer market. I recall William Fung, managing director of Li & Fung summarising this eloquently at the end of the World Retail Congress’s Asia-Pacific meeting in Hong Kong last year when he said "for the last 30 years, China has been the factory of the world. Now it is our turn to be the consumers of the world".
It all adds up to probably one of the most challenging times ever experienced by retailers. Despite this, my sense though is that they also understand that this is a period that calls for dynamic answers and new strategies. Doing nothing, as they say, is not an option. In talking to retailers it is clear that we are seeing just the first steps towards a new era of retailing. Every retailer is looking at how they seize the challenge of omni-channel retailing where their brands operate seamlessly across all channels. They are examining how many bricks and mortar stores they really require and how they can ensure they continue to attract shoppers. Above all, they are trying to make sense of the changing consumer in whatever international market they operate in. Put alongside the challenge of making their business fit for purpose in an economically challenged environment, it will help guarantee that the presentations and debates at the World Retail Congress in London this September will take place at a critical time and help inform and shape the emergence of the next phase in retailing’s long history.
Ian McGarrigle is Chairman of World Retail Congress which will take place in London during 19-21 September. He has worked in business to business journalism, publishing and event organising for the retail industry for over 20 years.
Taking Stock is Retail in Asia’s fortnightly column dedicated to showcasing opinions from experts in the retail industry.