Last week the Promotions Optimisation Institute hosted its annual summit where leaders in RGM (Revenue Growth Management), Advanced Analytics and Growth experts gathered to discuss the latest global trends impacting the retail industry.
The 2 minute debrief:
In Europe, growth is coming from new channels (non-traditional) with a growth footprint very different to what the businesses were set up to serve. Fastest growing retailers/ channels across Europe: Jumbo, Wholefoods, Boots/ DM, Poundland/ B&M, Express Supermarket Formats, Lidl & Food Discounters, Albert Heijn Ecoomerce. - Brian Gildenburgh, Chief Knowledge Officer, Kantar Consulting.
E-commerce as a channel currently accounting for 10% of sales and the fastest growing channel (share of global retail)
Given existing structures, processes and ecosystems, 80% of current retail real estate (bricks and mortar) is likely to hit ‘break-even’ with a mere 5% increase in online sales.
Global growth is coming from Amazon, Lidl, Costco and Aldi - they don't believe in category management. The role of brand (including private label) needs to be clearly defined in line in terms of shopper need-states and follow rigorous commercial coherence test)
Another retailer M&A is imminent and likely players to include Tesco, Carrefour, Auchan and Albert Heijn.
Real-time promotions targeted via online/ Amazon increasing. Kroger in the U.S. is a great example of how retailers are tailoring offers online to shift buying behaviours.
Change capability and transformation are becoming increasingly important in this space (systems, processes and people)
Alibaba is the model to watch for the moment.
Range and assortment for mobile shopping is largely context driven. New decision trees and matrices required for smaller formats. Consumer preferences are changing faster than current systems and processes are able to adapt.
WINNERS = RAPID ABILITY TO PROTOTYPE AND TEST VIRTUALLY. (Build - test - learn)
PROCESS AND PEOPLE OVER SYSTEMS (Founder's Mindset) where agility and rapid ability to test and learn (and fail fast) is key to transformation at scale
Best-In-Class Revenue Management team's are enabling a centralised strategic advanced analytics capability by empowering teams with 'self-serve' capability across multiple data sets (structured and unstructured) complemented by AI/ predictive analytics. Varying levels of organisational maturity in advanced analytics globally although this is rapidly changing to mitigate the risks of losses from seasonality and lags (as a result of inaccurate forecasts) and to boost upside growth potential.
Top down sponsorship of transformation initiatives and cross-functional ways of working (collaboration, trust and transparency) were the recurrent themes across all user cases presented at the event.
Superb event and a great opportunity to share learnings in an exponentially evolving industry. Thanks to Mike Kantor at the POI and those who shared their insights at the event.
Andrew Soteriou
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