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Let's return the value to retailing

The introductory part of the Summit was reserved for a great panel discussion of retail and supplying companies, which focused on the key theme for the future of the whole market – such as return of the value of retailing and increase of its prestige. Peter Müller (Kraft Foods CR) reminded that the way forward is through understanding of consumers and business partners in the context of a rapidly changing world we live in. As Derk Jan Terhorst (Ahold), has accented both sides of the market, of course, primarily pursue their business objectives, but must treat each other fairly and cooperate in the interest of customers.

Zdeněk Juračka (COOP) and Christian Karnath (Kaufland ČR) conscientiously observed that retail trade should communicate more actively, pointing out the importance of the sector for the society and consumers. The retail offer is constantly improving under the influence that retailers are investing considerable resources in construction, technology and logistics. Stores are often available to customers 24 hours a day, 7 days a week and are located in the accessible distance. Food products sold on the Czech market are the fifth cheapest within the European Union. However, shoppers take these facts for granted. Clear benefits of our retail trade are usually medially overbeaten by more attractive negative excesses. Czech Confederation of Commerce and Tourism in cooperation with the key chains is working on the preparation of systematic communication with the public.

Jan Hanuš from Agrofert Holding opened another hot topic--the trap of promotional price wars. He said that finally there luckily appear more discussions initiated by retailers on the topic of how to compete in another way but price. However, this is not yet an evidence of systemic changes, but it is rather a matter of the activities of enlightened individuals. Everything is always about people and business firms should seek to employ the different types of managers and specialists in the future. Bedřich Štecher from Jaromericka dairy, representing the smaller domestic producers in the debate, pointed to another possible way out of the vicious circle of discounted prices and pressure on reduction of product quality. In his opinion the future is in promoting local and regional production and systematic education of consumers to their preference, as we see it in the most advanced countries.

Future is (not only) about technologies

John Casti, the renowned American mathematician and author of numerous successful books, corrected a number of established ideas about possible scenarios of the development. He pointed out that the trends always end, and that it is dangerous to overestimate their explanatory power for projection the present into the future. Based on the analysis of historical trends, John presents tools for anticipating the “X-events”, surprises that must necessarily occur, and distinguishes them from those which may, but need not necessarily take place. In any case, we should bear in mind that surprises will always happen and it is necessary to adapt the way we plan and manage our companies.

Scott Duby from IBM has indicated the direction that business supporting technologies will take in the future. He expressed the belief that within 5 years, for example, mobile phones will become another new sense of people and will allow shoppers to "touch" virtually the goods offered. Customers will thus be able to analyse the offered products better. In addition, the computer will soon be able to interpret graphic objects, sounds and will even have its own smell sensors. Las but not least, the new technology will understand our tastes and consumer preferences. Therefore it will not be a problem for them to compare what we like, with what we are offered.

Martin Mravec and Zdeněk Skála of GfK reminded of the fact that we are entering the next phase of development, which is influenced by not only the above-mentioned technological revolutions, but also changes on the demand side of the market.

All of this leads to emergence of new types of shopping behaviour typical of even greater activity of shoppers. FutureBuy, the global GfK shopper research indicates the emerging pattern has a wider complexity. Shopping in classic brick & mortar stores still offer the experience and benefits that cannot be achieved in virtual shopping on the Internet. Therefore, you cannot expect a simple move to online shopping; rather it is necessary to talk about the new relationship between traditional and online purchases. GfK research, realized in the Czech Republic, indicated a strong preference for e-shops, but at the same time gives a number of chances to classical shops. It seems that even in the future no type of shop will be completely out of fashion. Next to each other there will coexist may stores offering very personalized shopping experiences, discounters offering high value for little money, and of course e-shops with fast and convenient access to a wide range of goods. Internet, smartphones, tablets… all will play a parallel game that was brought by hypermarkets a few decades ago: no one-sided dominance but creating a new playground with new rules for all.

How to live to see the future?

James Russo of Nielsen presented his belief that right in this time various factors have joined on the demand side - the new technologies and the impact of the economic crisis have merged to „the perfect storm“, which creates a unique set of challenges and opportunities. Future retail success is increasingly tied to thinking differently about how to reach and resonate with a diverse, demanding and connected consumer. Thinking Small can lead to Big Results. Retailers must seek new opportunities to stimulate appetite of consumers to shop and spend money. In conditions of the saturated market innovation of the supply of goods and services is, of course, a very difficult task.

Hana Samešová of Interspar and Paul Reason of Pilsner Urquell have proved that working together can be very useful. The cooperation between the Interspar retail chain and the key supplier of beer category brought together the best experts of both teams and created a very inspiring example of the latest approaches in areas that, until recently, were considered untouchable. The changes achieved by both teams over the past several months during remodeling "beer world", are a proof that there are still plenty of opportunities to improve and attract new customers in the future.

Duncan Bowdler, the head of British and European consumer co-operatives, presented examples of how the cooperatives have successfully adapted to specific national conditions. Sharing of common values and principles of co-operatives gives them significant and inimitable competitive strength. Duncan gave thus a hope to those numerous representatives of local retail and cooperatives present at the summit that also in the future there is a space for national retail companies that can compete successfully with international chains.

The main Retail Summit program, as well as a number of related discussion sections, were devoted to the Internet and multichannel retail, the phenomenon that is conquering also the Czech market. As confirmed in an interview of Tomas Drtina (INCOMA GfK) with Ondřej Fryc of Netretail Holding, you can expect its further expansion. Gradually, the nature of the online trade will also change, as well as its customer groups and purchase motivations. One of the key moments of the offer will be increasing emphasis on the shopping experience for e-shopping customers.

The future is not in the stars, but in our heads

The series of speeches at this year's Retail Summit signalised that the future is closely linked to the new technologies. Yet in the end the opinion prevailed that the greatest influence shaping the market perspective will come from people – in particular the company leaders. Therefore it was extremely valuable to listen to opinions of leaders presented in the final block of the first day of the Summit. Eva Štěpánková (RYOR), Martin Dlouhý (TESCO), Vilém Trška (Procter & Gamble) and Petr Pavlík (Stock) expressed about the importance of personal vision, strength, cooperation, fairness, and respect between business partners. They came to the result that profit is not only money, but also happiness, time for family, health, and joy at work that is shared with colleagues.

Retailing, however, is not just the matter of top managers, but also of thousands of rank-and-file employees. Specialized panel discussions devoted considerable attention also to them. Retail will no doubt be under increasing pressure to earn more, to stand the competition, and not to lose the customers. In the future, one can only expect a further intensification of the process, and this will require strong retailers of the new type. Petr Křiklan of Nielsen is convinced that the future traders and manufacturers will have to interpret the data and understand the customers far better.

Jan Koutný (TESCO) expressed the belief that, even in the technologically advanced time, the key task of the staff is not to run an e-shop, mobile apps or Facebook profile. Introduction of these tools is just influencing their further work. New technological solutions call for the work in teams in a broader context, for cooperation between retailers and suppliers and change management.

Jiří Mička of Monster Energy supplemented the inspirational discussion with a view that successful employee in the future will have to demonstrate the ability to convince business partners to act and think innovatively. Retailers will need courage. Modern trader must be able to transform the vision towards the purchaser and address the market in such a way that is appealing for his "fan"-customer.


Basic facts on Retail Summit 2013

• This year of the Retail Summit belongs due to extremely high participation among the most successful events in 19 years´ history. More than nine hundred representatives of companies and institutions attended at the meetings organized in the course of 2 days. Thus it was confirmed that the hard times lead to feelings of belonging and the need to face the challenges together.
• Main groups participating at Retail Summit 2013 were, in particular, representatives of the trade (31%) and the production of consumer goods (27%). Other participants were suppliers of information and communication technologies, banking, academia sphere, government, media and experts of consultancy, advertising and research.
• 57% of participants represented the top management of companies, more than 200 of them were CEOs, Chairmen or Managing Directors.
• The Summit was held with the support of dozens of companies and institutions. Special thanks of the organizers belong to Platinum partners Era (part of ČSOB), Plzeňský Prazdroj and Telefónica O2.

Contact for further info on the summit:
Barbora Krásná, Partner, Blue Events
Tel.: +420 222 749 841, e-mail: barbora.krasna@blueevents.eu , www.blueevents.eu

Contact for media:
Aneta Zímová, Blue Events
Tel.: +420 222 749 841, e-mail: aneta.zimova@blueevents.eu

Information on the event:
When/where: February 5 - 6, 2013, Clarion Congress Hotel Prague
Organizers: Blue Events in cooperation with VŠE and SOCR ČR
Conference Website: www.retail21.cz