Ebeltoft Presentation September 2009 Abridged

12TH LATIN AMERICA RETAIL FORUM – AUSTRALIAN OUTLOOK

The Retail Doctor® Group Pty Ltdwww.retaildoctor.com.au

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We are pleased to introduce to you our 2009 Retail Thought Leadership

report

Retail is a dynamic and diverse sector

Given the recent turbulence in the global economy, this thought-

leadership research investigated the future of the retail industry in

Australia and New Zealand

Primary interview data and secondary publication data were combined to

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© Copyright 2009. The Retail Doctor® Group Pty Ltd

Primary interview data and secondary publication data were combined to

explore the key trends impacting the retail industry now and in the lead

up to 2020

The results provide insight to retailers to navigate the current economic

downturn and in prepare for major trends likely to impact the retail

industry over the next decade

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Overview of findings - Short Term

There are growth opportunities for retailers during times of an economic

downturn

The retail environment is currently in a fragile position and may appear

substantially different in coming years

Retail consolidation will continue in the short term

Retailers must know their customer

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Retailers must know their customer

Shift toward greater customer value

Need for retailers to offer something different

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Overview of Findings Long Term

There are a number of trends likely to develop and impact the retail sector.

Continued trans-Tasman retail trend - retailers increasingly moving

between Australia and New Zealand.

Differentiation, particularly through premium services will shape the retail

environment in 2020

We will see a very different consumer – one who co-creates, and seeks

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We will see a very different consumer – one who co-creates, and seeks

personalised products and services

Virtual networks will link consumers and technology will change the way in

which consumers communicate with each other and retailers.

Consumer intelligence is key for the 2020 retailer

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Key Finding

One theme was consistent amongst all interviewees -

there is a need to ensure that retailer connect with what the

customer wants, and not rely on mere volume sales via high traffic

levels

Retailers are going to have to make sure they connect and remain

relevant with consumers

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relevant with consumers

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Why the Future of Retail?

Understanding potential future trends is a critical issue for retailers

therefore this an important topic on our agenda

Providing strategic insight as to what lies ahead for retailers in the

Australian and New Zealand markets provides retailers with a solid

foundation to develop effective strategies during the economic downturn

and beyond to 2020

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Background

Retail trade is a significant contributor to the Australian

economy

More than 250,000 retail outlets

Generating more than $220 billion in annual sales

(ABS, 2008; IBISWorld, 2009).

The last 10 years have been economically buoyant fuelling

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The last 10 years have been economically buoyant fuelling

much of retail growth

In late 2008 the retail industry globally was substantially

affected by the Global Financial Crisis (GFC)

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EConsumer Confidence

Australian consumer confidence declined the past 12 months. Largely

attributed to the GFC and:

Consumers concerned about their personal finances

Consumers concerned about the finances of the country.

Confidence hit an all time low in the second half of 2008 (close to the

levels of the 1990/91 recession).

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levels of the 1990/91 recession).

Retailers therefore experienced tough trading

Asset values declined significantly

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Consumer Behaviour

A shifting consumer attitude has been seen

Consumers more careful in their spending and have been ‘cocooning’

The term cocooning was coined during the 1991 recession and characterises

consumers creating comfortable home life environments in order to spend more

leisure time at home

This behaviour has had a negative effect on the sub-sector of ‘café’s,

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restaurants and takeaway foods’ - the only subsector to experience a

decrease in sales from the 2007 to 2008 period, with a decline of 0.4%

(ABS, 2009)

This contrasts to relatively strong growth in food retailing with a 6.1%

increase in sales (ABS, 2009)

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EAustralian Review

Despite the relatively small size of the Australian market globally, the retail

industry has become very competitive in the last decade

Retailers have worked hard to create stimulating shopping environments

Experiential retailing has been a popular element

Many retailers making use of technologies such as digital signage and kiosks

to create excitement in-store.

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to create excitement in-store.

In-store developments such as self-service checkouts have further improved

the retail experience

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DKnow Your Customer

Our research highlights importance of consumer

insight (data collection and analysis)

Demographic

Psychographic

Behavioural

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Consumer trends previously changed slowly

allowing retailers to analyse their implications and

make well-informed decisions

Consumer trends now emerge rapidly due to

technology, accelerated social diffusion, instant

communication, and increased willingness to

accept – or inability to escape – new ideas (Wesely-

Clough, 2006)

Every Australian Shopper is Online

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Implication: are you able to meet these information needs?

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A good on line brand experience is not a separate experience to the

transactional piece

A good on line brand experience = An integrated brand and

transactional experience

A good on line brand experience should correlate with the in store

experience

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On Line Brand Experience

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experience

A good on line brand experience will also address the needs of multi

channel customers and will reinforce the values of the brand

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Green Retail

Field Force Australia takes advantage of

the current interplay between government

and retail

Customers are in a position of power to

place pressure on the supply chain for

environmental benefit.

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Field Force and The Retail Doctor

Brief: To develop a complete new to market national retail channel

showcasing environmental and integrated product suites complementing

Field Force multi channel offer.

Approach: The Retail Doctor developed a Fit for Growth diagnostic™

including full channel planning, broad strategic positioning and all

operational, merchandising and financial planning to underpin a new

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channel to market including a review of all merchandise ranging products

based on strategic positioning, life cycle and profit analysis, new layouts

and plan-o-grams based on best practice retail principles.

Solutions: Economic feasibility based on strategic positioning, initial

ranges merchandise ratios design and all operational systems and

frameworks are completed and on track for the first store to open.

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Successful retailers will

Understand potential problems early

Implement strategic vision

Consider their customer

Examine the complete customer

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experience

Tie customer needs to core products

and differentiators.

For more information and to see how The Retail Doctor can help you become ‘Fit for

Business’ please connect with us.

Facebook: www.facebook.com/retaildoctor

Twitter: www.twitter.com/retaildoctor

LinkedIn: www.linkedin.com/in/brianwalkerretaildoctor

Thankyou for viewing the abridged version of The Retail Doctor’s 12th Annual LatinAmerican Retail Forum Presentation.

THE RETAIL DOCTOR® GROUP PTY LTD

© Copyright 2009. The Retail Doctor® Group Pty Ltd

Mailing AddressPO Box 209Milsons Point NSW 2061

Phone | +61 (0)2 9460 2882Fax | +61 (0)2 9460 3883E-mail | [email protected]: | www.retaildoctor.com.au

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