Navigating the New Retail Landscape OUP CORRECTED PROOF – FINAL, 7/6/2016, SPi ‘This very clearly-written book will be of immense value to retailers facing the huge changes taking place in the retail landscape today and into the future It identifies the driving elements of retail transformation from a truly international perspective covering most retail formats across the world The authors then address the practical issues facing retail leaders and offer guidance on how to realign their retail business with the newly engaged customer and technological developments, which characterise this new challenging landscape.’ Dr Christopher Knee Assistant General Manager International Association of Department Stores ‘Perplexed by the extent and pace of changing customer behaviour and expectations? This book buries the notion of a single roadmap to success, instead it describes the key attributes retailers must adopt in order to build a sustainable business model.’ Michael Flood Strategic Customer Analysis, John Lewis, UK Navigating the New Retail Landscape A Guide for Business Leaders Alan Treadgold and Jonathan Reynolds Great Clarendon Street, Oxford, OX2 6DP, United Kingdom Oxford University Press is a department of the University of Oxford It furthers the University’s objective of excellence in research, scholarship, and education by publishing worldwide Oxford is a registered trade mark of Oxford University Press in the UK and in certain other countries © Alan Treadgold and Jonathan Reynolds 2016 The moral rights of the authors have been asserted First Edition published in 2016 Impression: All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, without the prior permission in writing of Oxford University Press, or as expressly permitted by law, by licence or under terms agreed with the appropriate reprographics rights organization Enquiries concerning reproduction outside the scope of the above should be sent to the Rights Department, Oxford University Press, at the address above You must not circulate this work in any other form and you must impose this same condition on any acquirer Published in the United States of America by Oxford University Press 198 Madison Avenue, New York, NY 10016, United States of America British Library Cataloguing in Publication Data Data available Library of Congress Control Number: 2016933338 ISBN 978–0–19–874575–4 Printed in Great Britain by Clays Ltd, St Ives plc Links to third party websites are provided by Oxford in good faith and for information only Oxford disclaims any responsibility for the materials contained in any third party website referenced in this work Acknowledgements In one sense this book began around twenty-five years ago when we first started working together Our early interests then in themes of change in global retail landscapes and the transformative role of technology on retailing and retail enterprises find expression in this book, albeit in ways we could never have anticipated a quarter of a century ago In another sense it began around ten years ago when, independently and in very different roles and geographies, we were researching, discussing, presenting, and refining several of the themes in this book In a more formal sense it began around two years ago when we committed to writing this book Along this trajectory, both short and long, many, many people have—often without their knowing it—helped to frame, reframe, and finesse the themes in our book through their exposure to and feedback on earlier versions of them in executive education sessions, workshops, conference presentations, and discussions We thank them all Several of our friends and colleagues of long standing have helped greatly to bring this book to fruition by both their enthusiasm for our initial idea and their support along the way, especially in diligently reviewing earlier drafts and fearlessly suggesting how we could make them better In this regard we are particularly indebted to Simon Brodie, Robert Clark, Alan Giles, and Elizabeth Howard Many executives in retail businesses have been instrumental in the development of our thinking through their willingness to share with us their perspectives and experiences We are grateful to them all (This is not the place to discuss again what it means to be a retail business any more Chapter tries to address that particular tautological conundrum.) We are grateful to Oxford University Press for their enthusiasm to publish our book and for their friendly professionalism and support to us in doing so We are especially indebted to our editors at OUP, David Musson and Clare Kennedy Despite all the help and guidance we have received from so many, it seems unlikely that some inaccuracies and misrepresentations will not have crept unobserved into our work We ask forgiveness and, as ever, the fault is ours alone ADT & JR March 2016 OUP CORRECTED PROOF – FINAL, 1/6/2016, SPi Contents List of Figures List of Tables List of Cases Introduction ix xi xiii Part Navigating the New Retail Landscape The New Landscape for Customer Engagement The Transformational Role of Technology 31 The Changing Physical Landscape of Retailing 66 New Dimensions in Retail Industry Internationalization 91 The Emergence of New Business Models 116 Bringing Order to the New World Order 139 Part Guidance for Business Leaders Reimagining the Retail Store 151 Delivering the Omni-Channel Experience 176 The New Needs of the Retail Enterprise 202 10 The New Needs of Retail Enterprise Leaders 229 Conclusions: Challenges and Opportunities 245 Index 255 List of Figures 1.1 Generalized schema of shopper types 1.2 Generic marketing funnel 23 1.3 Attitudes of Millennials in the BRIC Economies 26 1.4 Smartphone soup bowl 28 2.1 Device penetration by geographic market 36 2.2 Broadband access by geographic market, 2013 36 2.3 Country differences in online retail transactions 62 3.1 The world’s fastest growing cities, 2000–14 68 3.2 Passenger kilometres by private car, selected countries, 1991–2012 72 3.3 Will you use stores more or less often in two years’ time? 76 3.4 Store-based retailers and the online challenge 78 3.5 Regulatory conditions in retailing: selected countries, 2008 and 2013 82 4.1 The ‘retail life cycle’ of North America 110 5.1 Xiaomi users indexed vs age of all Chinese smartphone users 130 6.1 Ordering change framework 142 6.2 Change framework—the major change drivers 144 6.3 Possible impact of shopper-facing technologies 147 7.1 Territories where physical stores can achieve competitive advantage 155 7.2 Global levels of trust in different forms of marketing and advertising, 2015 160 7.3 The experience advantage of retail stores: recent winners of the World Retail Awards Store Design of the Year award 163 7.4 ‘Lifestyle theatre’ area in Hankyu’s department store, Osaka 166 7.5 Where physical stores can still win: the example of Convenience Grocery and Premium Department Stores 167 8.1 Capability areas required by retailers for effective delivery of an omni-channel strategy 179 8.2 Execution impact and capability change requirements of key business functions 180 Conclusions: Challenges & Opportunities thinking about the challenge of extreme uncertainty is to acknowledge the possibility of alternative futures and to think and plan accordingly While we cannot predict with certainty what will happen in the future in times of extreme uncertainty, it is nevertheless possible to develop useful guidance about the future by both reducing complexity and identifying those elements which are certain in an uncertain world Scenario planning is a useful tool to employ in such circumstances It accommodates the kind of structural uncertainty that the new retail landscape presents, by addressing how each of the (many) possible interpretations would create change in the future business environment Whilst scenario planning cannot eliminate uncertainty, it can reduce it and help business leaders to come to a reasonable judgement on the degree of robustness of a specific decision across a range of uncertainty The process of creating scenarios of a range of possible futures also enables more informed sense to be made of the current environment Finer insights into current realities are achieved in two ways First, previously implicit assumptions are made explicit and, secondly, scenarios are used to both challenge current group thinking and encourage more futuristic thinking For example, in a recent analysis of the future of Indian retailing, scenario planning results transcended ‘common-sense’ perspectives and provided insights that were less expected and obvious The conventional narrative that retail modernization would destroy traditional retailing in that country was, through scenario planning, reframed into an alternative future perspective that the nuances of Indian culture and the complexities of consumer behaviour made it more likely that traditional and modern retailing would, in fact, continue to coexist in India And there are Building Blocks There are attributes that retail enterprises and their leaders will, in our opinion, need to have if they are to remain relevant, resist competitive challenges, and realize the opportunities that present themselves in the new landscape of retail: (i) (ii) (iii) (iv) (v) Be truly customer centric Be digitally skilled Innovate (Re)turn to strong, clear values Lead Be Truly Customer Centric There is a somewhat uncomfortable sense in which, in a more forgiving era, some retail enterprises were rather ‘getting away with it’ in the sense of preaching a commitment to customer centricity but without truly delivering 249 Navigating the New Retail Landscape on those words or aspirations A (largely) borderless world of (almost) fully informed shoppers with (almost) limitless choices is a very unforgiving environment Being truly customer centric is not a slogan to be rolled out annually at a company conference It has to be a mantra around which the enterprise and everyone in it is organized and lives by all of the time Because the landscape of customer engagement is changing so quickly and in often unanticipated ways—largely because of the impacts of technology in the hands of shoppers—any enterprise needs constantly to revisit how it is performing on its customer-centricity aspirations; and then be prepared to make what may very well be radical changes that go to the heart of the enterprise This includes being willing to move away—often very far away— from the conventional tenets of ‘the way we things here’ Being truly customer centric in the new landscape of retail may mean exiting 50 per cent or more of an expensively assembled store network; reconfiguring stores as mini-warehouses; investing in entirely new capability areas while exiting others As well as new go-to-market approaches, skills, and organizational structures, it might also mean revisiting the suitability of current ownership structures when the reasonable expectations of stakeholders no longer align with the needs of the enterprise and the expectations of its shoppers Be Digitally Skilled Retail and consumer engagement landscapes are being transformed above all else by technology, in the hands of the shopper, within the enterprise, across value chains, societies, and entire economies In the near-term future, change will accelerate still more sharply as the Young Millennials enter their high spending years with a mindset of retailing as a ‘digital first, store maybe’ activity One thing that the last decade has taught us is that the appetite for shoppers to embrace new technologies to fulfil their shopping needs has consistently exceeded many people’s expectations In the new landscape of retailing it is difficult to imagine that any retailer can be effective without having a digital perspective and capability After all, how many retailers would feel able to operate without electricity? Sir Ian Cheshire, the highly regarded former CEO of the Kingfisher home improvement retail group, has said that, ‘businesses are much more complex now, and the way the internet is changing consumer shopping patterns—it’s becoming so much more profound and the rate of change is accelerating not declining The intuitive merchant prince is great but I don’t think it’s enough now If that intuition isn’t complemented by really good data, you’re going to die.’2 Sir Ian Cheshire, quoted in ‘Sir Ian Cheshire on the Art of Retail’, Retail Week, 13 Mar 2015, 32–6 250 Conclusions: Challenges & Opportunities Being digitally skilled at both an enterprise and a personal leadership level is a multi-faceted proposition but divides into four main parts: Capture and interpret customer insights Organize and execute across multiple touchpoints—physical and/or digital Engage customers with digital communication Apply digital technologies to deliver enhanced shopper experiences Innovate In the new landscape of retailing, enterprises and their leaders must be willing to explore innovation possibilities It is difficult to imagine that a customer-facing enterprise that was ‘fit for purpose’ even ten years ago still will be today let alone in ten years’ time This does not, and for many should not, mean being on the ‘bleeding edge’ let alone the leading edge of innovation: fast follower and/or enhanced imitator are perfectly legitimate and appropriate positions to want to occupy in respect of innovation activity But all enterprises and their business leaders must, we feel, have an appetite to explore innovation possibilities This means being willing to break with the past and to accept that attributes, capabilities, and investments which have made the enterprise successful in the past may not be relevant or valued now and in the future It also means that enterprises will likely need new skills, capabilities, and people in order to be able to identify, create, and deliver innovative approaches that engage shoppers A key question, then, is whether shoppers are more difficult to reach today and looking forward than they have been in the past The conventional narrative holds that they are But is this really true? As we move quickly towards close-to-ubiquitous internet access—at least for populations with some level of disposable income in organized economies—reaching billions of potential shoppers all of the time becomes remarkably affordable relative to the cost of traditional means of engagement in a pre-internet world Achieving reach is, relatively speaking, perhaps not so difficult It is meaningful engagement with shoppers that is the real challenge Here again, our glass is rather more than half full So-called big data holds out the promise of being able to understand at a very granular and actionable level the subtleties of how shoppers might be persuaded to purchase Moreover, technology in both the hands of the shopper and the retail enterprise (traditional or new) creates fascinating opportunities both to enrich the engagement experience and to move the points of greatest influence closer to the point of purchase (Re)turn to Strong, Clear Values Much of the transformation in retail landscapes globally is a transformation in techniques—in the how of retailing: how shoppers are engaged; how 251 Navigating the New Retail Landscape merchandise is presented and delivered to shoppers; how new market opportunities are realized and competitive challenges addressed In environments where all of the techniques of retailing are fluid and able to be radically changed, it becomes still more important for enterprises and their leaders to be very clear and to communicate clearly both across their enterprises and to their shoppers the values that the business stands for and stands behind Retail enterprises are no longer the automatic, default custodian of the relationship with the shopper Many other enterprise types are seeking to occupy this ground—FMCG, logistics, and payment companies as well as ‘new to retail enterprises’, perhaps most notably the internet-enabled platform providers As such, retailers are no longer competing for the customer against other retail enterprises alone—that was the old retail In the new landscape of retailing, they are competing for the customer against a plethora of different enterprise types—many of which they may not know especially well, if at all It is also the case that in the fluid world of the new retail, enterprises may find themselves collaborating with an enterprise that, in another part of the market or in another geography they are competing against Moreover, shoppers will, we believe, become still more concerned to know of and be influenced by the attitudes and values of the enterprises with which they engage While this is by no means a universal concern of shoppers today, the direction of travel is clear: shoppers are becoming more concerned about the values of the enterprises with which they engage and they have the motivation and the means to find out whether or not they are living up to those values As retail enterprises transform into very different types of organizations and move further away from their traditional practices, so it becomes still more important to be clear on what the core values are that define the enterprise, to be true to them, and to articulate them with clarity and purpose to the shopper While the how of what an enterprise does is being radically transformed, the why of what an enterprise stands for needs to be communicated clearly and adhered to strongly, especially as the complexity of an enterprise and its points of engagement with the shopper increase Lead Competitive advantage in the digitalised world demands a commitment from the very top, not only to invest in the right infrastructure but to acquire the new skills of retail.3 (Laura Wade-Gery, Executive Director, Multi-Channel, M&S UK) In times of disruptive change, rich in possibilities but also full of challenges, effective leadership matters more than ever For most leaders of retail enterprises—new or established—this will surely be the most exciting, 252 Laura Wade-Gery, quoted in ‘What Next for E-tail?’, Retail Week, 15 Aug 2014, Conclusions: Challenges & Opportunities challenging, opportunity-rich time of their professional lives Anything seems possible But the stakes are uniquely high too Momentum shifts happen very quickly It is now possible to build enterprises of enormous reach and influence and at almost bewildering speed But equally some of the icons of the retail industry globally are discovering in the harshest possible terms that modern shoppers are no respecters of great deeds of the past—it is great deeds of the present that they crave and engage with In the new landscape of retailing, success can happen quickly but failure can happen more quickly still Great leadership cannot be a ‘steady as she goes’ mantra, a ‘five more years of the same’ perspective Leading effectively in the new retail landscape demands a lot of enterprise leaders—the ability to reframe how an enterprise delivers its core purpose; to be willing to break away from the past and yet keep those skills and values which remain important and relevant; the ability to prioritize and distinguish the important from the urgent; and to manage the complexity that comes with operating across multiple touchpoints with fast-changing shoppers But above all effective leadership in the modern era of retailing is about the ability to manage effectively in environments defined by uncertainty, where there is no true north to aim for and no route map of how to get there Periods of disruption are periods of disproportionate opportunity (Art Peck, CEO, Gap Inc, 20154) In Part of our book we discussed the nature of change in the retail sector globally We unambiguously took the view that we are in the early stages of a reframing of the landscape of retailing It may well feel challenging but, far more than this, it seems truly exciting, epoch making, and rich in possibilities In Part we shifted focus to discussing how enterprises and their leaders may need to reinvent in order to remain relevant and desired by shoppers—by reimagining the role of stores and reinventing the store experience even to the point of addressing the question ‘what is a store anymore’; by mastering and executing their omni-channel ambitions; by creating enterprises equipped with the skills, structures, and capabilities to be successful and led by leaders equipped to be successful in the new landscape of retailing We spoke of the necessity for enterprise leaders to be able to operate effectively in environments of uncertainty and to be comfortable with the reality that there is no single path to success and often no clear vision of even what the end goal is Christopher Columbus (1451–1506) appears to have been a man not without considerable flaws and his legacy has been subject to much debate, controversy, and revision But what is not in doubt is that he was one of the 253 Navigating the New Retail Landscape greatest explorers and navigators of his or any age While reliable attribution is frustratingly elusive, Columbus is thought to have said of one of his four voyages of discovery: ‘Following the light of the sun, we left the Old World.’ This seems a rather apt summation both of where we are heading in the new landscape of retailing and of how in this book we have tried to navigate our readers from the Old World to the New 254 Index Figures, tables, and footnotes are indicated by an italic f, t, and n following the page number 3D printing 74 impacts of 147f, 148 and shoppers’ engagement 15, 48t, 49, 51 7-Eleven 84, 158 Inc 21 Accenture PLC 196, 213, 214 additive manufacturing see 3D printing AEON Group 16, 162 Age of Ambition (Osnos) 28–9 Agg, Steve 209 AH To Go 158 Airbnb 126 AIS (Autonomous Intelligent Systems) 185 Alibaba Group 19, 103, 105, 116, 117–18, 119, 140, 150, 210 Allinson, Tim 24 Amazon ‘Amazon laws’ 108 business models 117 and ‘carrier payments’ 60 and the choice paradox 52 cost models 135 dataset analysis 64 drones as delivery system 184–5 enhanced shopping efficiency 45–6 and globalization 104, 105 staffless stores 121 stock earnings 223 Amazon Fresh 105 Amsterdam (The Netherlands) 74 Ann Taylor and Loft 54 Anthony, Scott 216–17 app-based shopping 35, 43, 49, 53, 119, 121, 139, 215, 237 Apple Pay 43–4 Arcadia Group 107 see also Topshop Argos 79–80, 118, 132 click and collect orders 169 and convenience advantage 158 and omni-channel retailing 178, 182, 195–9, 200 and product reviews 209 Arvind Retail Group 35 ASDA Stores Limited 152, 170, 220, 222 ASOS 53, 103, 104, 107, 118, 210 Audi AG 165 Australia 72f, 82f, 94, 163f drones trial 184–5 and globalization 106–8 and internationalization 96 parcel tracking 182 Autolib’ 124–5 automotive industry 15, 211t business models 124–5 and internationalization 109 and personalized engagement 165 Bailey, Christopher 19, 162 Ballmer, Steve 32 Barnes & Noble, Inc 117, 153 Barra, Hugo 128 Batra, Pankaj 20–1 Bertolini, Andrea 185–6 Best Buy 64, 195 and digital payments 44 Bezos, Jeff 117, 135 Bicester Village 88–9, 101 Bissell, John 225–7 BitPay 59 Black, Jerry 16, 162 BLE (Bluetooth Low Energy) 49 bookseller retail 74, 117, 153 Bosideng International Holdings Limited 109 Boxpark Shoreditch 87–8 B&Q (Kingfisher Group) 80, 93, 152 brand awareness 101, 102, 107 branded communities 173 brand touchpoints 205f and competitive advantage 210–13 multi and mono-brand platforms 82, 238 and ranking 211t Brazil 26f, 33t, 37, 82f in-store technology 50 Index Brazil (cont.) new formats 171–3 Brookings Institution 67 Burberry Group Inc 19, 162, 213 and digital information 42 Bush, Chris 85 business models 2, 5, 116–17, 137–8 brand defence 118 as change driver 144f, 145 dynamic pricing 126–7 and performance metrics 135–6 renting goods 124–6 shoppers’ contribution 136–7 staff presence 120–1 stockless stores 122 subscription retailing 123–4 see also cost models C&A, in-store technology 50 Camelcamelcamel 64 Canada 82f, 94, 154t, 233 Carrefour 55, 102t, 229 and digital labelling 42 format revitalization 86 and internationalization 69, 96 Carroll, Bill 126 car sharing 25, 124–5 Castorama 125 catalogue retailing 79, 110f see also Argos CBRE Group, Inc 75, 85n42, 88n49 Chainani, Sunil 225–7 Chalk, Tim 84 Chartered Institute of Logistics and Transport 209 Cheshire, Ian 92–3, 152, 208, 250 ChillHub 45 Chilli Beans 171–3 China and 3D printing 74 business models 117–20, 128–30 and convenience retailing 83–4 and Digital Natives 26f, 27–9 and internationalization 93, 100, 103–4, 105, 108–9 and modernization 112 and pharmaceutical retailing 242 and travel tourism 88–9, 101 and tuángòu (‘team buying’) 17 China Daily 17 choice paradox 52–4, 157 Churchill, Winston 148 Circulo Verde 174 Clarke, Andy 220 Clarke, Philip 178 click and collect 43, 75, 78, 79t, 80, 103, 117, 158, 162, 169–71, 225 256 and omni-channel retailing 182–4, 194, 196, 197–8, 199 service failures 206, 207f Click&Buy International Ltd 60 clothing sector 13, 47t, 53 business models 121, 122 data analysis 63 Fabindia, core values 225–7 in-store services 50, 79, 121 and internationalization 109 managing uncertainties 232 see also fashion industry Coby, Paul 207–8 Cohen, Mark 240 collection points see click and collect Collect Plus 78, 183 Columbus, Christopher 253–4 competitiveness 11, 43, 81, 97, 118, 155f, 166–8, 252 and brands 210–13 ‘conforming stores’ 7, 171 Conlumino 235 consumer electronics 24, 33t, 109, 124, 128, 195 convenience stores 83–4, 86, 100, 134, 225 advantage of 157–9 and selective excellence 157–68 Cornell, Brian 233 Corstjens, Marcel 97 cost models 130–5, 156 crowdsourcing 14–15, 52, 63, 186 CurrentC 43 Cushman & Wakefield 153 customer centricity 7–8, 29, 237, 249–50 and humanizing engagement 21–2, 51–2 and omni-channel retailing 177, 193 and participative engagement 11–12, 50, 57, 129 and personalized engagement 20, 126–7, 172, 204–5 ‘purchase journeys’ 24–5 and technology 41–51, 57–8, 121 datasets 60–4 David Jones Limited 50 Deliv 186 delivery services 30, 75, 121, 136, 137 and omni-channel retailing 51, 70, 182–6 and product visibility 205–6 subscription retailing 123–4 see also click and collect Deloitte 34, 78n27, 92n1 department stores 66, 69, 110f collect services 80 and customer engagement 47, 50–1, 121 and internationalization 95, 104, 109 Index and omni-channel retailing 169, 214, 216, 221, 224, 238, 240 reinvention of in Japan 166–7 Desigual 122 distribution 14, 131t costs 133t, 171 excellence of 209–10 logistics 182–8 regulations 81 in rural areas 71 Dixons Carphone 24 Doddle 170–1 Dollar Shave Club 123 Dorgan, Philip 223 Dorothy Lane Market 127 DPD (UK) 170 Drakeford, Gillian 84 drones as delivery systems 184–5 and internet coverage 39 Duddy, Terry 195 dunnhumby 19–20 DUS Architects (Amsterdam) 74 Eataly 164 eBay 105, 116, 187 and collection points 158, 169, 197 and P2P sharing 125 e-books 47t, 74 eClerx 205–6 e-commerce 17–18 business models 119–20, 127, 129 cost models 133t, 134–5 and customer choice 52–4 datasets 60–4 and digital payments 43–4, 58–60 and humanizing engagement 21–2, 51–2 luxury retailing 53, 238–9 and market regulations 83 and mobility 70 in Nigeria 111–12 and physical landscapes 75–7, 80 web hosting platforms 103–4 see also payments, digital Economist, The 15, 79 Economist Intelligence Unit 204 efficiency enhancement 41–3, 132, 134–5, 219f engagement 5, 29 channels of 40–1 of China’s Digital Natives 27–9 humanizing 21–2, 51–2 order and fulfilment points 169–71 participative 11–12, 50, 57, 129 personalized 18–21, 126–7, 165, 172, 204–5 purchase journeys 21–5 technological 49–51, 57, 121, 123 types of 8–11 unengaged shoppers 8–9 European Commission 83, 99, 186, 191n24, 213n21 European Union market integration 96 and payments 59 Everlane 13 Everything Store, The (B Stone) 104 Evian 123–4 experience (store-based) 162–5, 166 Fabindia 225–7 Facebook, Inc 120, 211t and customer engagement 50, 127 and internet access 38–9 investment in technology 231 Fangsuo Commune (Guagzhou) 163f Farinetti, Oscar 164 fashion industry 210 and customer engagement 11–12, 16, 19, 47–8, 79 and e-commerce 35, 53, 238–9 and globalization 104, 107 and immediacy 159 and modernization 113 and omni-channel retailing 176–7 and product uniqueness 122 and risk management 234 and technology 49 fast fashion retail 104, 152, 213 Chilli Beans 171–3 era of 232 and internationalization 95 FDI (Foreign Direct Investment) 82, 97 Financial Times 186 Flipkart 35, 129 FMCG (fast-moving consumer goods) 22, 118, 123, 158, 211t and customer engagement 49–50 and internationalization 92, 98, 109 and market development 70–1 food retail 33t, 69, 220 changes in 189, 222 and convenience 158, 168 and fulfilment points 170 and internationalization 100 and personalized engagement 20 see also grocery retail Fox, Jodie 50–1 France business models 123, 124–5 grocery pick-up points 78, 169–70 hypermarket format revitalization 86 online sales activity 61, 62f 257 Index France (cont.) shelf-edge labelling 42 shopping centres 87 Fresh & Easy 58 Gangnam Style (Psy) 100 Gap, Inc 232, 253 Gartner, Inc 56 Garvey, Michelle 54 Germany 33t, 72f, 73, 76f, 80, 82f, 92, 93, 94, 100, 102t, 111, 168 convenience retailing 84 delivery services 183–4 digital payments 59–60 Mall of Berlin 88 Gerth, Karl 108–9 Girl Online (Zoella) 16 globalization 6, 8, 14, 21–2, 98–9, 114–15, 139, 145 and emerging markets 25–7, 32, 35–6 and internet access 99–106 and modernization 110–14 see also internationalization Gomez, Jose 176–7 Google 211t drones as delivery system 184–5 Google Glass 231 Google Wallet 43 Google’s Android 45 and internet access 39 and robotics 185 Gordon, Harry 95 Gotch, Katy 118, 195, 196, 197 Gould, Paul 107 Grazia (fashion magazine) 53 Green, Sir Philip 152 Greenbury, Rick 238 grocery retail 1, 26, 168, 220 and brand loyalty 212 and collection points 78, 169–70, 182 and convenience 158 cost models 133t, 156 and dynamic pricing 126–7 and e-commerce 44–5, 47t, 105, 106, 209 and internationalization 95, 97, 100 and logistics 187 and space issues 85, 168 subscription retailing 123–4 and technology 42, 55, 58, 185–6 Groupon 17–18 Hamel, Gary 168 Hamleys World (Moscow) 163f Hankyu Hanshin Department Store 166–7 Hanoi (Vietnam) 113 Harrods 104–5 Hart, James 104 258 Harvard Business Review 61, 216–17, 233 health & beauty sector 41, 94–5 Helsinki (Finland) 77 Hemingway, Ernest (The Sun Also Rises) 233 Hermes 183 hiring products 25, 124–5 H&M (Hennes & Mauritz AB) 48, 107, 172, 211t Hobbycraft 79 Hointer 121 Homebase 152, 195, 197 home improvement sector 152, 156, 224 Homeplus 170 Home Retail Group 118, 195 homewares retailing 33t, 107, 225 Hong Kong convenience stores 84–5 House of Fraser 109 humanizing engagement 21–2, 51–2 see also participative engagement; personalized engagement human resources and business models 120–1, 122 function of 191–2 and problem-solving 161 hypermarkets 90, 118 effects of regulation 81 and internationalization 95–6, 100 and market development 69 revitalization of formats 85–6 and space issues 152 and technology 42 IDC Technologies, Inc 34, 40 IKEA 84, 94, 156 immediacy 66, 142f, 143, 144f, 147f, 155f, 159, 167f, 172 India 26f, 37, 67, 106, 111, 129, 249 business models 129 and FDI (Foreign Direct Investment) 97 hypermarkets in 85 and importance of values (Fabindia) 225–7 and internationalization 96–7, 128 and market development 70–1, 82 mobile-phone shopping 34–5, 112t and modernization 113 Indonesia 85 and internationalization 100 influential shoppers 9–10, 16, 18–19, 24, 70, 139 informed shoppers 9, 110, 250 and participative engagement 12–14 Inkson, Jonathan 196–7 innovation 4, 84, 244, 251 desire for 213–17 and leadership 236–40 and technology 34–5, 124, 165 Instagram, and engagement 16, 17 Index Instanbul, transport infrastructure 69 International Association of Department Stores 168 International Finance Corporation (IFC) 13 internationalization 91–2, 108–9, 114–15, 242 as change driver 144f, 145 ‘confident internationalists’ 94–8 and internet access 99–106 and reluctance 92, 93–4 see also globalization internet access by geographic market 36–40 and globalization 99–106 social media engagement 16–18, 27–9 internet.org 39 investors education of 223 and risk management 234–5 IoT (Internet of Things) 45, 146–7 iPad 54–5 IT, and omini-channel retailing 181–2, 196, 219–20 Italy 76f, 82f, 88, 94, 168, 184, 185 fashion e-commerce 238–9 Japan 33t, 67, 82f, 94, 95 and convenience 158 and department stores 166–7 and inflation 156 mobility trends 71, 72f and shopper engagement 16, 21–2 and vending 21 JC Penney 240 Jensen, Luke 168 Jessops Limited 77 JLL (Jones Lang LaSalle Incorporated) 80 Jobs, Steve 190 John Lewis Partnership 80–1, 120, 169, 181, 207–8, 230 JLab 216 and ownership structure 223–4 Johnson, Patti 233 Johnson, Ron 240 Jumia 70, 111 ‘Just for U’ programme 126 Kalanick, Travis 186 Kantor, Jodi 191 Kapur, Mamta 70–1 Karjalainen, Jyrki 77 Katz, Karen 221–2 Kay, Alan 245 Kay, John 136 Kharas, Homi 67 Kiala 184 KikiLab 122 Kingfisher Group 80, 85, 92–3, 125, 152, 250 Knee, Christopher 168 Kobayashi, Masatada 21–2 Kobe, Tim 21 Kohl’s Corporation 207 Konga 111 Korea 33t, 82f, 163f, 170 automotive sector 109 Kurie, Todd 106, 209n15 Lagos (Nigeria) 84, 111 La Gran Plaza (Texas) 87 Lal, Rajiv 97 Lalbhai, Kulin 35 La Redoute 14, 100 Last Shop Standing (P Piper) 73 LCP Consulting 205 leadership 193, 210, 229–30, 244, 252–4 accepting uncertainty 231–3 establishing priorities 240–1 and innovation 236–40 and risk management 233–5 and vigilance 235–6 Leahy, Terry 8, 222, 234, 240 Leclerc hypermarkets 170 Lenovo Group Ltd 109, 128 Les Troc Heures 125 Levis 13 Lewis, Dave 178 LG 128 and humanizing engagement 21 Local Motors 15 Localz 216 logistics 24, 46, 116, 170, 220, 221, 223, 239 and omni-channel retailing 179f, 180f, 182–4, 186–7, 209–10 and online retailing 80–1 Lowey, Frank 96 loyalty programmes 126–7, 208 luxury retailing and e-commerce 53, 238–9 and internationalization 88, 95 and urbanization 67, 68 LVMH Group 95, 213 Ma, Ken 111 Magnit 84 Maia, Caito 171–3 Malaysia, market regulations 82–3 Malkin, Scott 89 Mall of Berlin 88 Mall of Qatar 69 Mall of Scandinavia 88 malls see shopping malls Mango 176–7 Marchetti, Federico 238–9 Marcus, Neiman 221 Marie Claire (fashion magazine) 53 259 Index market development emerging markets 68–71 mature markets 71–3 and regulation 81–3 and shopping malls 86–8 and space issues 153 Martec Investments Lp 208 Mattel, Inc 172 Max Fashion 113 Mayfield, Charlie 120, 181, 216, 223, 230 McKenzie, Kevin 165, 215 McKinsey Global Institute 61, 68, 81 McQueen, Alexander 32 MCX (Merchant Customer Exchange) 43–4 media and digitization 74 and e-commerce 53 and marketing 188–9 and shopper engagement 15–17, 23, 27, 48, 64, 127 see also social media Meijer 44 Microsoft Corporation 32, 35, 211t middle class, and market development 67–8, 71 Millennials 2, 250 attitudes on ownership 124 as change driver 141, 144 and globalization 25–7, 99 and social media engagement 16, 129 and technology 19, 24, 29 and urbanization 72 Mintel Group Ltd 45 Mintzberg, Henry 232–3 Mitchenall, Lunson 75–6 mobile devices 2, 32, 111, 125 and e-commerce 34–5, 36f, 43, 45, 112t and humanizing engagement 21 and in-store technology 49–50 and internet access 38 and social engagement 21, 27–9, 119–20, 128–30 mobility see transport sector modernization 2, 85, 249 and globalization 110–14 and internet access 38 Moore, Karl 232 Morrisons 123, 152 and cost models 133t, 134 and SCOs 58 Moser, Claus 63 M&S (Marks & Spencer) 103, 208, 220, 238 Mukherjee, M et al 113 Mulpuru, Sucharita 18, 105 Murphy, Andrew 216 music industry see recording industry MVIS (Minimum Viable Innovation System) 217 260 Myer department store (Melbourne) 163f Myntra 35 Net-a-Porter 53, 238 Netherlands 76f, 82f, 184 and 3D printing 74 convenience formats 158 and social media engagement 127 New Look (Westfield London) 163f New York Times 191 Next 233–4 NFC (Near Field Communication) services 42, 43–4, 49, 126, 147f Nielsen Company 13, 16, 36, 70, 72 Niemeier, S et al 12 Nigeria convenience retailing 84 e-commerce in 70, 111–12 Nike, and digital information 42 Nordstrom, Inc 51 NRF (National Retail Federation) 54 Ocado 105, 118 cost models 133t, 134 Oculus Rift 35, 231 O’Donoghue, Ted 159 Olusanya, Olumide 112 omni-channel retailing 40–1, 77, 80, 169, 179–80, 200–1, 227–8 and brands 210–13 cost models 130–5, 156 and culture 176–7 and distribution excellence 209–10 and finance 192–3 and human resources 191–2 and innovation 213–17 and logistics 182–8 and marketing 188–9 and merchandising 190 organizational structure 193–9, 217–24 and skills 177–9 sourcing function 192 and store operations 189–90 and technology 181–2, 203–9 and values 224–7 online shopping see e-commerce Orbitz 127 Osaka 166–7 Osnos, Evan (Age of Ambition) 28 Otto Group 100, 183 outsourcing 174, 217, 221 of IT 181–2, 196, 219–20 ownership structures 223–4, 234–5, 250 OXIRM (Oxford Institute of Retail Management) 54, 75, 206, 218 Index Packstation 183–4 Panmure Gordon 223 participative engagement and customer centricity 11–12 and informed shoppers 12–14 and limitless alternatives 14–17 see also humanizing engagement; personalized engagement passive purchasers 10, 11, 14 payments, digital 43–4, 119 in Germany 59–60 in the UK 43, 58–9 Peck, Art 232, 253 peer to peer (P2P) sharing 125–6, 205 performance metrics 135–6, 193 personalized engagement 18–21, 48t, 49, 79, 126–7, 165, 172, 204–5 see also humanizing engagement; participative engagement Pessina, Stefano 242–3 pharmaceutical industry 242–3 Philippines 174 and retail modernization 113 Philips, Dalton 123 Pizza Hut, and personalized engagement 20–1 Planet Retail 206, 210–11 Plassat, Georges 86 Point Relais 103, 183 Porter 53 Porter, Michael 147, 232 post-purchase 16, 17 Price, Mark 221 pricing at collection points 171 dynamic 126–7 electronic labelling 42, 48, 127 and participative shoppers 11 and price competitiveness 155–7 priorities, setting of 240–1 problem-solving (store-based) 160–2, 168 profitero.com 42 Project Loon 39 ‘purchase journeys’ 22–5, 29, 34 pureplay retailers 107, 116, 117, 210 PWC Consulting Services 111, 191 QR codes 43, 121, 127, 170 ‘queue-busting’ technology 43 Quezon City (Philippines) 174 Quirky 14–15 Rabin, Matthew 159 Raeburn, Hugh 11–12 Rakuten Inc 21–2 recording industry 73–4 Redmart 106, 209 regulation and air traffic 185 and development issues 72–3, 77 effects on retail real estate 81–3 Reis, Luis 56 Reiss 11 rental services 124–6 Restoration Hardware 224 RetailNext 63 Retail Week 230 RFID (Radio Frequency ID) 42, 121 risk management 100, 174, 233–5, 239–40, 243 robots, as delivery systems 121, 185–6 Rocket Internet AG 106 Roman, David 109 Rouras, Joan 122–3 Royal City Mega Mall (Hanoi) 113 RTKL 174 Russia 26f, 33t, 37, 76f, 82, 88, 106 convenience retailing 84 Sachs, Goldman 124 Safeway, Inc., and dynamic pricing 126 Saïd Business School 54, 75, 230, 232, 240 Sainsbury’s 80, 152, 168 acquisition of Argos 199 and convenience 158 cost models 133t, 134 sales taxes, and internationalization 107–8 Sanpower Group Company, Ltd 109 Saunders, Neil 235 Savings Catcher app 215 Schalk, Janet 207 Schrage, Michael 61 Schwartz, Barry 52 SCO (self-check out) applications 43, 56, 57–8 Scott, Laurence 188 Screwfix 80, 84 Selfridge, Harry Gordon 95, 179, 229 Selfridges 95–6, 230 Sephora 94–5 S-Group, Inc 77 Shagaya, Sim 111 sharing economy 125–6 Shinsegae Department Store (South Korea) 163f Shoes of Prey 50–1, 163f Shopkick 49 Shopology 210 shopping centres 117 experience in 165–7 and immediacy 159 and innovation 214–15 and internationalization 96 and modernization 112–13 new formats 86–8 and space issues 153, 154, 167 261 Index shopping centres (cont.) and urbanization 69, 72 Value Retail 88–9 Singapore 106, 109, 209 skills 177–9, 222, 244 shortage 191, 218–19 SmartDrop applications 123–4 ‘smart hangers’ 48t, 50 smartphones see mobile devices SM Group 113 social media, shopper engagement 15–17, 23, 27, 119–20 Digital Natives (China) 27–9 dynamic pricing 127 and marketing 63, 64, 188 Sonae 56 Soni, Punit 35 Sonoma, Williams 107 sourcing function 131t, 179f, 180f, 192 South Africa 76f, 82f, 100 Spaaza 127 space issues 79–81, 85–8, 152–4, 162 and functional services 78 and market development 68–72 online retailers opening physical stores 116–17, 158 and urbanization 66–8 Spain 76f, 82f, 87, 94, 95 business models in 122 SPAR Group 100, 112 specialty retailing 40, 73, 106, 166, 174 Spring 52 Sri Lanka, and internet access 39 staff see human resources Stein, Darrell 208 Steiner, Tim 105 Stephens, Dough 13, 168 Stone, Brad (The Everything Store) 104 store-based retailing 151, 154–5, 174–5 as an engagement ecosystem 169–73 and convenience 83–4, 157–9, 168 effects of regulation 81–3 future-proofing 173–4 and immediacy 66, 155f, 159, 167f, 172 and logistics 80–1 and market development 68–73 and problem-solving 160–2, 168 and radical approaches 168 and shopper experience 162–5, 166 and technology 46–7, 48t, 49, 78–9, 121, 127 and urbanization 67 value of 155–7 Street, Andy 80–1 Streitfield, David 191 subscription retailing 123–4 Sugg, Zoe (Zoella) 16 sunglasses sector 171–3 262 Superdry 102 supermarkets and brand engagement 212 and space issues 152 and technology 57 see also grocery retail; hypermarkets Suzhou Village 89 Sweaty Betty 79 TalkWalker 63 Target 63, 94, 233, 240 team buying 17 technology 2, 5, 31–2 advantages of 159 and customer centricity 8, 12, 41–54, 172 and delivery services 123–4, 184–6 impact of 140–1, 144–8 in-store services 50, 78–9, 121 and problem-solving 161 and retail datasets 60–4 and retail enterprises 54–60 and retailer visibility 203–9 and Young Millennials 19, 24, 29 see also 3D printing; internet access; mobile devices; SCO Teece, David 95, 213 Terrell, Robin 20 Tesco 8, 20, 141, 170, 178, 220–1 data analysis 61 and digital labelling 42 format revitalization 85–6 and loyalty programmes 208 and risk management 234 and SCOs 58 and space issues 42 Tesla Motors, Inc 165 The Container Store Group, Inc 192 The Hunt 52 Threadless 52 Time magazine 231 Times, The 39, 185 Tindell, Kip 192 Tmall 103, 104, 105, 117 Tom Tom NV 69, 70 Topshop 107, 164f and space issues 152 and technology 48 transport sector business models 124–5 and delivery systems 170–1, 184–5 and market development 69–70, 71 see also logistics travel by consumers 89, 101 services, and dynamic pricing 127 Trujillo, Bernardo 229 tuángòu (Chinese for ‘team buying’) 17–18 Index UAV (Unmanned Aerial Vehicle) 185 Uber 127, 186 Uberti, David 173 uncertainty, management of 231–3 unengaged shoppers 8–10 United Kingdom and brand equity 212 collection points 169, 170–1 convenience retailing 85, 158 cost models 131–2, 133t, 134 and data analysis 63 digital payments 43, 58–9 dunnhumby 19–20 and globalization 105 hypermarket revitalization 85 in-store services 78–9, 80 mobility trends 71, 72f online sales 34, 44–5 product digitization 73–4 and product visibility 205 shopping malls 87, 88–9 social media engagement 16 space issues 152, 154 United States e-commerce sales 34 and internationalization 93 market development 72, 87 online sales data 61, 62f payment systems 43 product development 15 and sales taxes 108 space issues 153 subscription retailing 123 urbanization 67, 77 as change driver 141, 144f, 146 and market development 68–72 and retail modernization 111 USDAW (Union of Shop, Distributive and Allied Workers) 58 Value Retail 88–9 values, retaining 224–5, 237, 251–2 Fabindia case 225–7 Varley, Rosemary 218 vending machines 21 Verizon Destination Store (Mall of America) 163f Victoria & Albert Museum (London) 32 Vietnam, retail modernization 113 ‘vloggers’ 16 Vogue 53 Wade, Roger 88 Wade-Gery, Laura 252 Waitrose 126, 221 Walden, John 195, 197, 198, 199 Walgreens Boots Alliance 242–3 Wal-Mart Stores, Inc @WalmartLabs 215 and datasets 60, 63 and digital payments 43 and diversification 171 and internationalization 93, 96 and SCOs 57 stock earnings 60, 64 Walton, Sam 179 Wanelo 53 warehouses 78, 110f, 121, 168, 169–70 Wasmuht, Tobias 100, 112 web hosting 103–6, 220 WeChat 27–8, 119–20 Westfield Group 78, 79, 154, 165 Westfield Labs 214–15 Whatsapp 119–20 Wipro Limited 56 WMX (Walmart Exchange) 215 Wolfson, Simon 233–4 World Retail Congress 162 Xiaomi Inc 128–30 Yoox 238–9 Young Millennials see Millennials Zara 95 and e-commerce (China) 103–4 and internationalization 95 Zhang, Jie 221 Zilok 125 Zipcar 124 Zoella (Zoe Sugg) 16 Zuckerberg, Mark 36–7, 38, 39, 231 263 ... xi xiii Part Navigating the New Retail Landscape The New Landscape for Customer Engagement The Transformational Role of Technology 31 The Changing Physical Landscape of Retailing 66 New Dimensions... Navigating the New Retail Landscape Part of this book explores the new landscape of retailing, its nature and characteristics, and the forces of change which are reshaping the retail industry and challenging... was very often inimical to the desire to build scale and efficiency Navigating the New Retail Landscape Today, the retail industry globally stands on the cusp of a new and very different era