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World Retail Congress 2009 Top 10 Themes

World Retail Congress 2009 Top 10 Themes

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Published by manishkul-
World Retail Congress 2009: top 10
Economic recovery
The consumer is a changed animal
Consumers want to leave your
store smarter
Give consumers meaning, not
money
Luxury: trading up
Polish up your touchpoints
Emerging markets: the rocky ride
Local focus
Sustainbility is the new IT
Don't waste a good recession
World Retail Congress 2009: top 10
Economic recovery
The consumer is a changed animal
Consumers want to leave your
store smarter
Give consumers meaning, not
money
Luxury: trading up
Polish up your touchpoints
Emerging markets: the rocky ride
Local focus
Sustainbility is the new IT
Don't waste a good recession

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Published by: manishkul- on Jun 19, 2009
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06/19/2009

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Global retail leaders met in Barcelona earlier this month at the2009 World Retail Congress. WGSN picks out 10 key ideas anddiscussions that caught our attention.
Speaking at last year's World Retail Congress, retail tycoon Sir PhilipGreen, head of Arcadia and Bhs, told delegates the sector was to facean "acid test". Green said: "Now it's dark out there, let's see who canfind the light at the end of the tunnel. In easy times, we get carriedaway. Now we're going to discover if what we are doing has stabilityand legs."He was right. The economic crisis has resulted in high-profile retailcasualties and has impacted deep into the retail supply chain. Morethan one year later, global retail leaders and industry expertsgathered for the third and final WRC in Barcelona before the eventmoves to Berlin next year.The economy was high on the agenda and throughout three days of briefings, the WGSN team heard retailers discuss how they dealt withthe crisis and what new approaches they were taking for theirbusiness, all served up with a healthy dose of pragmatism. Here wepull out the 10 main topics of discussions and ideas.
Economic recovery
Speakers at the WRC, including heavyweights from Deloitte and MiraeAsset, predicted the recession would begin to end in late 2009 withthe
US and China dragging the world out of the downturn
.
Some economists already see green shoots although Deloitte's DrIra Kalish said the economic crisis will have a lasting effect on theretail landscape, with fewer major retailers in each channel.
The US will see its economy experience
structural change
,moving away from a consumer spending model towards onefocused on exports, investments and government spending.
Until recovery begins to bear fruit retailers are having to navigateprecarious situations. However the feeling among delegates wasthat
the big shocks have happened
. There was optimism thatthe worst is now over; global retailers felt they are at least able toplan for the future, with better visibility of the situation they andtheir companies face.
The consumer is a changed animal
Consumers are making long-term changes in attitude as a result of the recession. David Roth, CEO of WPP's The Store, said the consumerhas been through
three stages of grief 
brought on by the worldwiderecession: rage and acute distress; acceptance; and moving on.
World Retail Congress 2009, Barcelona
World Retail Congress2009: top 10
Economic recovery
The consumer is a changed animal
Consumers want to leave yourstore smarter
Give consumers meaning, notmoney
Luxury: trading up
Polish up your touchpoints
Emerging markets: the rocky ride
Local focus
Sustainbility is the new IT
Don't waste a good recession
About the event
The World Retail Congress 2009 washeld in Barcelona, May 6-8. Nextyear the event will move to Berlin.http://www.worldretailcongress.com/
Look out for further WGSNcoverage from the World RetailCongress on Business Resourceand Retail Talk in the comingweeks.
Related reports
Retail: new ways of thinking (WRC2008)Retail leadership: World RetailCongress 2008
World Retail Congress 2009:
top 10
 
A.CARR, L.HALL, A.JOBLING, A.RUMSEY, J.WARKENTIN 28.05.09
 
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Jim Stengel, former P&G marketing manager and now CEO of JimStengel LLC, says that some 90% of consumers say they areplanning long-term changes. Even if only 20% of those followthrough with those plans, it will still make a big difference. "It isnot a weather change, it is a climate change," he stressed.
In changing their aspirations, consumers have reprioritised theirunderstanding of values. When recovery comes, said Roth, therewill be
no return to business as usual in terms of pre-recession trading
. Rationalisation, which is a new cost-cuttingagenda among retailers, is consumer-driven, with customerstelling retailers that they do not need so much choice.
Meanwhile, consumers are also changing as a result of technology,specifically the internet. Although ongoing for some time, retailersare now actively developing strategies to account for the way thatonline shopping, for example, is actually changing the way theconsumer operates. eBay CEO John Donahoe said that
consumersare now "demanding that we break down the boundaries"between online and brick-and-mortar stores
, with theintegration of online research and store visits only set to increase."We need to embrace the fact that online and offline are blurring,and the consumer wants convergence," he said.
Hot Topic CEO Betsy McLaughlin said that the mall is no longer theplace where teenagers hang out socially - now they do it on socialnetworking sites such as Facebook. As a result, retail strategiesneed to change in order to maintain traffic that could previously bealmost guaranteed. "Retailers need to find a way to get people intotheir stores, rather than relying on mall traffic," she said.
Consumers want to leave your store smarter
Retail has become more about
educating consumers
as shoppersseek out ways to validate the shopping experience.
Jim Stengel cited a tie-up between US retailer Ann Taylor Loft andProcter & Gamble. The retailer, recognising that the trend fordisposable clothing was over among customners, sought out a wayto help shoppers create new outfits from investment pieces theyalready had. Part of that involved
the reuse of clothing
. Theretailer worked in P&G's washing detergent brand Tide to promoteits new Total Care products, including endorsement from TimGunn.
Education also features in Tesco's international stores. PhilipClarke, Tesco international director, highlighted an example of aprogramme of painting classes in its Thai stores. "It is good for thecommunity and good for us - we believe it builds customer loyalty,which is vital to the success of any retailer," Clarke said.
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Give consumers meaning, not money
The traditional polarised price model, which puts Prada at one end of the pricing scale and Primark at the other, is changing. Instead, it isbeing replaced by a model based on
social engagement
, accordingto Michael Jary, worldwide managing partner at OC&C StrategyConsultants.
Consumers have a desire to have an emotional engagement to thepurchase process, he argued. Brands and retailers should therefore
adjust to this consumer desire
and change the way theydevelop.
Matt Rubel, president and CEO of Collective Brands Inc, which runsUS footwear retailer Payless ShoeSource, cited the example of ecorange Zoe & Zac, which targets a 16- to 30-year-old customer. Asthe collection ties into issues that this consumer group cares about,it commands a 12% higher price than other brands.
In another example, the company's prosaic dyeable shoe offer wasrebranded from 'custom colour' to 'moment of celebration andunforgettable moments', focusing on weddings and proms. It wasdesigned to replicate a cosmetics display in store, and in-storedesigner Leila Rose validated the 64-colour palette. Prices went upbut sales grew by 150% in the first 90 days. Rubel said:
"Thestrategy that we use is this: we build platforms for ourbrands that tie in with emotional occasions in people'slives".
 
Luxury: trading up
The recession is actually helping the traditional luxury market,creating more space for it in the market and prompting it to moveupwards, said Concetta Lanciaux, CEO of Strategy Luxury Advisors.
During the slowdown, the aspirational customer can no longerafford - or no longer even wishes to aspire to - luxury, shecontinued. As a result, the brands that catered for that market willsuffer, but at the same time
the luxury market is "going backto haute couture and its principles"
of personalisation, artisan-made, exclusivity and quality.
Consumers still want luxury products, but are not prepared tocompromise on a 'halfway-house' of a pseudo-luxury brand.Consequently, brands such as Hermès, Burberry and Prada will stillbe desirable, as consumers prefer brands with a recognised,authentic heritage.
The notion of trading up that was popular before the recession isalso still continuing now, said Lanciaux, but now raising the price of goods as well is no longer possible.
"Trading up meansremoving fake,"
she added. "Consumers today prefer to buysemi-precious stones rather than zirconium."
Polish up your touchpoints
The retail journey is becoming
more fragmented
. Consumers aremoving between online research, social networking sites, mobilenetworks and stores before they purchase. According to researchpresented by IBM, 50% of UK consumers and 46% in the US switchfrom store to internet when purchasing from a brand.
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