Across the board, panellists also agreed that in 2011 there will be reasons to believe in retail. Despite consumer spending being down, Sir Stuart Rose, chairman of Marks & Spencer, said that technology (among other things) is enabling companies to expand rather than posing a threat to them.
Dr Ira Kalish, director of global research Deloitte, said he didn’t think there will be a double dip, predicting slow growth for 2011. He said that in recession countries, consumers are deleveraging and paying down debts while saving more and spending less.
According to Kalish, high unemployment in the US is causing uncertainty in the market and will result in a reduction in consumer spending.
Kalish believes the demographics in India mean that the country’s market has the opportunity to grow rapidly, and in Brazil the rising number of middle class people will stimulate an increase in consumer spending.
Gertrude Tumpel-Gugerell, member of the executive board, European Central Bank, said there will be positive underlying momentum of the recovery in the Euro area. She also said that positive consumption is expected to display moderate growth due to weak labour markets, low growth in compensation to employees, higher savings due to economic uncertainty and subdued house prices.
She said that consumption should, however, benefit from real market developments due to higher profitability and declines in inflation and a lower degree of net tightening of credit standards.
Rose agreed, and said that he was less worried about this recession than those he saw in the 1970s. He believes that governments internationally are doing the right thing and that cuts, especially in the UK, are going to have a positive effect.
Retailers have got to be more efficient, said Rose. Efficiencies can be made through technological advancements, better products and making sure consumers can easily get their hands on what they want.
He added that, in order for consumers to be confident, businesses have to prove that they confident, too.
Mindy Grossman, CEO of HSN expanded on this and said that, in the current economic climate, retailers need to have clarity of branding and be willing to invest in new technology. She believes it’s also important that retailers are able to understand the consumer-centric mindset and are able to target them in a way that engages them, particularly when interacting with them online.
Phillip Schindler, vice president of Northern & Central Europe at Google, described the internet as a ‘revolution’ and said, with 1.9bn people online, retailers need to harness the opportunities. He said the amount of data online has exploded, and most consumers now access that data via searches. He said, “Over 60% of retail sales are significantly influenced by what people are doing online”.
The use of mobile phones is also crucial for retailers, said Schindler. He said 30% of US adults have used a phone in-store to compare prices or look up information. “The mobile phone is the next wallet,” he said.
Rose added: “You have to treat online as your friend, and ignore it at your peril.”
He said that retailers need to be better with technology and that they have a lot of work to do on product innovation. He said online would be the ‘advance guard’ for M&S’ international expansion, and that consumers want endless options, so “if you’re not in the options game, you’re a loser”.
Esprit Holdings chairman Heinz Krogner said: “The internet is already our biggest store, but we face problems going to new markets with the internet because we’re not known. We have to build up the brand awareness, too.”
Source: World Retail Congress
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