Retail sector globally grows despite tough times

Wednesday, 1 February 2017

PETALING JAYA: The top 250 global retailers generated aggregated revenues of
US$4.31 trillion (RM19.1 trillion) in the fiscal year 2015, representing a composite
growth of 5.2%, according to the Global Powers of Retailing 2017: The Art and
Science of Customers Report from Deloitte Global.

Slow economic growth in major developed economies, high levels of debt in

emerging countries, deflation or low inflation in rich countries and a protectionist
backlash against globalisation were among dynamics which contributed to a
challenging economic environment for retailers and yet people still need to shop, so
the industry carries on.

In some places and with some cohorts of shoppers, the outlook for retailers is
favourable, Deloitte Global chief economist Dr Ira Kalish said.

For the third year in a row, revenue growth for the top 250 apparel and accessories
retailers outperformed other product sectors.

According to the report, historically, this category of retailers has also been the
most profitable, and fiscal year 2015 was no exception.

However, the report also stated that retailers of fast-moving consumer goods
(FMCG) are, by far, the largest companies with an average retail revenue of nearly
US$21.6bil (RM95.7bil) as well as the most numerous, with 133 retailers accounting
for just over half of all top 250 companies and two-thirds the revenue.

According to the report, the level of retail globalisation appears to be at the same
level as the previous year, with two-thirds of the top 250 retailers operating outside
their home country borders with operations in more than 10 countries and deriving
nearly one-quarter of their composite retail revenue from foreign operations.

Global Powers of Retailing 2017 also discusses the art and science of customer
engagement in order to help retailers design fresh experiences enabled by the right
technology, and strengthen customer loyalty.

What was once considered futuristic is now table stakes. Retail innovators know
technology is no longer supplemental to the shopping experience, it is fundamental.

Technology alone, however, is not enough. Customers are seeking new and
surprising products and experiences, the report stated.

Business News. (2017, February 1). Retail sector globally grows despite tough times. Retrieved from
http://www.thestar.com.my/business/business-news/2017/02/01/retail-sector-globally-grows-despite-
tough-times/#8YPjmPkH5WmtzajT.99
Synthesis:

The article talks about retail sector globally growing despite tough times.
According to Dr. Ira Kalish, Deloitte Global chief economist, slow economic growth in
major developed economies, high levels of debt in emerging countries, deflation or
low inflation in rich countries and a protectionist backlash against globalization were
among dynamics which contributed to a challenging economic environment for
retailers and yet people still need to shop, so the industry carries on. In some places
and with some cohorts of shoppers, the outlook for retailers is favorable. Global
Powers of Retailing 2017 also discusses the art and science of customer
engagement in order to help retailers design fresh experiences enabled by the right
technology, and strengthen customer loyalty. The report stated that Retail
innovators know technology is no longer supplemental to the shopping experience,
it is fundamental. Technology alone, however, is not enough. Customers are seeking
new and surprising products and experiences.

According to Philip Kotler (2012), retailing includes all the activities involved
in selling goods or services to the final consumers for personal, non-business use. A
retailer or retail store is any business enterprise whose sale volume comes primarily
from retailing. Retailing broadly involves understanding the consumers needs;
developing good merchandise assortment; and displaying the merchandise in an
effective manner so that shoppers find it easy and attractive to buy.

It can be concluded that retail occupies an important place in the world

economy. Although technology is said to be fundamental in the retail industry,
retailers must also have unique and surprising products in order to maintain
competitive advantage in the market.

Arora, N. (2012, September 15). INTRODUCTION TO RETAIL INDUSTRY. Retrieved

from http://shodhganga.inflibnet.ac.in/bitstream/10603/10202/8/08_chapter
%201.pdf

Business News. (2017, February 1). Retail sector globally grows despite tough times.
Retrieved from http://www.thestar.com.my/business/business-
news/2017/02/01/retail-sector-globally-grows-despite-tough-
times/#8YPjmPkH5WmtzajT.99