Retail Summit 2012: Eight hundred participants were convinced it would be a mistake to overlook the forest of new opportunities behind the bushes of crisis
Published 2/1/2012

Although the largest meeting of Central European retail took place in the times of very nervous market situation this year, the individual program contributions brought a number of very positive messages. Perhaps that is why even in this uncertain time, the level of participation in the Retail Summit 2012 was very high and reached almost 800 delegates. Summit brought a fundamental conclusion that the market of near future will be shaped not only by very turbulent macroeconomics, but also by series of revolutionary changes in society, technologies and business strategies. The key question for retail management is not whether to keep the turnover or fall by least per cent. It will be a much more important matter --how to move to a higher League of retail business or how to survive at all.

Retail Summit 2012 held on Jan31 – Feb1 in the Prague Clarion Congress Hotel, entered in its 18th year together with the Czech trade into a phase of maturity. It happened at the time, which doesn't look very promising.  Lubomír Mechura from the research company Nielsen even stated at the Summit that the situation of the Czech retail market can be probably best described by the word "war", or more subtle wording "sharp competitive struggle for survival".

Jan Bureš, Chief Economist of the Era, Postal Savings Bank (part of ČSOB) presented the current analysis, confirming that the mood in the Czech economy is declining. The looming recession in the countries of our major foreign trade partners and a series of domestic austerity steps does not signalize anything good for the upcoming year. Companies will be extra cautious in such an environment, not willing to invest, create new jobs or increase real wages. It's no good news for the retail trade and local consumption in general. The weak performance of the economy, characterized by the expected growth of 0.5% will lead to a decline in real wages by 0.8% and the stagnation in retail sales. But, as Jan Bures pointed out, there are far more dramatic foresight scenarios including so-called Eurogedon. The collapse of the euro zone would mean a disaster for the EU economy, including the Czech one. And retail trade would belong to the most affected sectors, losing at least 15-20% of its turnover.

Revolutionary changes in society 
More detailed analysis of the situation, however, indicates that it is about far more than just another crisis. It would be a big mistake „to overlook a huge forest of new opportunities and threats behind the crisis bushes". What's going on? Nothing less than a new revolutionary leap in the development of the retail market.

As highlighted by Zdeněk Tůma from KPMG, even now it is possible to achieve substantial growth in sales and margins, and there are many who use the generic "dead mood" to own the expansion. Growth processes can be found in the marketing and sales activities, although the region of Central Europe still lacks behind in using them. There is an opportunity to increase turnover and profit, despite widespread expectations of unfavourable macroeconomic developments. The necessary condition is, however, the understanding of revolutionary changes that are now taking place in society, on the technological front and last but not least, even in retailing itself.

Karel Janeček, successful entrepreneur and founder of the Foundation Fund against corruption, said that the economic and political situation of developed countries is really critical. Social system in most of these countries has apparently exhausted its potential. It is quite inefficient, inflexible, full of bureaucracy and works just from inertia. The economy of a number of countries, including the Czech Republic, is devastated by the corruption. For a positive development there is essential the fundamental change in thinking of a significant majority of the people. The following discussions in the framework of the "top-to-top“ panel, with participation of Andrej Babiš (owner, Agrofert holding company), Martin Dlouhý (ex-Vice President of the METRO Group), Richard Hindls (Rector of University of Economics in Prague), and Zdeněk Juračka (President, SOCR ČR) outlined the basic functioning premises of future  healthy and prosperous society. The discussion outputs gave recommendations to the Government of the Czech Republic, which are published in a separate document.

Digital technologies are becoming the main business tool 
Peter Fitzgerald, Sales Country Director of Google UK introduced the technology trends, which generate new development areas, so far often hardly conceivable. Linking of online and offline worlds, and in particular usage of mobile technologies contribute to the "multichannel" transformation of companies that are getting closer to more consumers and their new habits. A world of mobile retail is no longer a choice but a must. It is necessary to work on own strategy in the field of m-commerce and have the clear idea of mobile investment. Basic, but certainly not the only step, is optimizing Web pages for mobile applications. 

High relevancy of the topic of smart technologies in our market was proved also by Ondřej Fryc, CEO of  Netretail Holding (on-line shop, in one of the discussion sections. has successfully tested an interesting innovation, just a few months after the world premiere in Korea. Virtual QR Store in 4 stations of the subway in Prague prepared in cooperation with Procter & Gamble has demonstrated the readiness of Czech consumers to purchase with the help of this smart phone application.

Many other presentations of new technological solutions were similarly optimistic, such as case studies presented by Telefónica Czech Republic, Adobe or SAS showing smart banking, contactless mobile payments, or automated demand forecasting and online business optimization,

Retail needs an utterly new strategy
One of the peaks of this Summit was the speech of David Bosshart, CEO of the Swiss retail think tank GDI. According to him, the former global retail strategy, based on the "triple A" will no longer work. Triple A (Automation – Asiatization - Animation) has created what is now often considered to be a successful retail business. Automation has brought more technology than ever before, Asiatization has decreased prices of goods, but did not guarantee longer term business sustainability and greatly increased the supply chain risks. Animation, covering the trend towards more entertainment, more discounts and fast winnings, harmed the retail industry quality and emotional relations with customers.

Triple A now appears to be a clear dead end. In the next stage of retail trade development a different strategy is needed, based on the victory of creativity over money. It won't matter how much we spend, but how well we spend it or how efficiently we invest. The more the importance of technology will grow, the more will be important the matters technology cannot solve - talent, emotions, and communication. Smart machines will need even smarter people. With accelerating speed of consumers´ life, there is a growing pressure for a greater flexibility and mobility of retail. New solutions for retail stores, new ways of meeting the customer demand, creative solutions for on-line orders, the decline of real estate importance. All of this will create retail of a new generation, where everyone will be primarily trader with time. No doubt it will be a revolutionary change, and it pays off to be alert and well prepared.

Tomáš Drtina from INCOMA GfK company described Czech retail in the horizon of next few years. The project INCOMA RETAIL VISION 2015, based on the views of the sample of leading managers and experts of the Czech market, indicates that strategic considerations presented by David Bosshart may find an early implementation in our environment. One of the conditions is a significant improvement in the relations between suppliers and retailers.

Xavier Hua, Managing Director of ECR Europe, introduced the ways to closer cooperation, enabling the optimization of costs on sides of suppliers and retailers and at the same time, offering consumers a better shopping experience. Examples of the specific implementation of this vision in our conditions headed by Czech and Slovak ECR initiatives were given in the discussion section Retail & Cooperation.  However the essential condition of the success is the will to cooperate, expressed and advanced by the top management. Fortunately there are some leaders that are aware of it, as was proved by the contribution "the interview in a café", where Doug Brodman, CEO of Plzensky Prazdroj and Martin Ditmar, CEO of Spar met and discussed cooperation challenges.

Adam Elman, head of the implementation of the „Plan A"– pioneering eco-ethical concept of Marks & Spencer, has showed why sustainable business is a key priority also for ECR Europe. It's not just about the noble vision - after 5 years of operation the activities of Marks & Spencer have concrete positive results.  They demonstrate that sustainable business may also refer to profitable business. Martin Moravec of p.k. Solvent has looked on a similar topic from another perspective and demonstrated that in our market we need an "independent trade." In the difficult economic situation in future, local retailers will have a great deal of co-responsibility for the state of the society. They must therefore focus much more on values and traditions that are necessary for business success in the long term. Martin Moravec in this context introduced the model of "vital company", which is developing in a harmonious manner accenting the development of associates as the key parameter of success. He thus confirmed, that the retail revolution will be in a close relation with necessary changes in society mentioned also by other Summit speakers.

Almost 800 participants of Retail Summit 2012 debated these fundamental topics intensively on both conference days, not only during 11 discussion sections and workshops, but also during informal parts of the programme, such as was evening festive diner organized as a school leaving party at the end of the first day. Its atmosphere at least encouraged a bit the rather slack mood of just mature Czech retail.  The result perhaps is worth it - if at least part of the participants of this prestigious event has found inspiration and encouragement, the Czech trade will be not only adult, but also successful.

Summit took place thanks to support of many partners, the most important Platinum ones are Poštovní spořitelna, part of ČSOB, Plzeňský Prazdroj and  Telefónica Czech Republic.

For more detailed information on Retail Summit 2012 contact:
Barbora Krásná, Partner, Blue Events

Media contact:
Zuzana Mračková, Office Manager, Blue Events
Tel.: +420 222 749 841, e-mail: