technology in retailing

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technology in retailing

• The future is here

• Dimitrios Dimakakos
• Research analyst

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About Euromonitor International

• A trusted business intelligence source
• Biggest global player in strategic business
  intelligence
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  covered
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• Industry specialist client support teams

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• Internet retailing
• Growth trends and analysis
• The future of payments

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Technology in retailing

• Internet Retailing Blazes a Trail

2010/2011 Retailing Fastest Growing Channels
by Market
Euromonitor International

• Retail sales in Japan and Western Europe, both
  facing rapidly ageing consumer bases, will remain
  relatively flat, although non-store retailing,
  driven by internet retailing, will continue to be
  a source of growth in these markets
• Internet retailing, however, is not necessarily
  the fastest growing channel in all markets.
  Broadband penetration and low levels of credit
  card ownership have hindered growth of the
  internet retailing channel in many emerging
  markets. In addition, new modern grocery formats
  such as hypermarkets and discounters, introduced
  by major international grocery retailers, have
  kick-started rapid growth in Latin America and
  Eastern Europe. Similarly, the value proposition
  of variety stores is beginning to redefine mixed
  retailing within Russia and parts of the Middle
  East.

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• Internet retailing
• Growth trends and analysis
• The future of payments

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Technology in retailing

• Free Wi-fi Enhances the Instore Experience

• Wi-Fi is a hotspot for 2012 and marketers should
  take advantage of that. Consumers will benefit
  from the offers and the price war.
• For many developed market consumers, PCs and
  laptops are beginning to take a backseat as most
  smartphone owners use these convenient devices to
  surf the internet and watch TV anywhere from
  parliaments to buses.
• Levels of internet access vary considerably
  across the countries reviewed 86 of the UK
  population are internet users, compared with just
  6 of the Indian population.
• The use of mobile phones to compare prices
  in-store and to read reviews was also found to be
  most prevalent among Chinese respondents, of whom
  39 compare prices in-store at least once per
  week and 43 read reviews.

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Technology in retailing

• Older Consumers Are Still in the Game

• 63 of those aged 45 to 54 and are older
  executives understand how to use smartphones and
  other technological devices. Ageing workforces,
  thanks to improving health and longer life
  expectancies, mean people are benefiting from
  full incomes for longer. Today's 60 year-olds can
  expect to spend money for at least another 20
  years.
• In Munich, Germany, the Frauencomputerschule, an
  expanding enterprise for making computers
  accessible for women, has noted that increasing
  numbers of older women are booking into their
  courses.
• Launched in June 2011 by a US-based individual,
  Hive Dock for the iPhone 4 is designed to assist
  elderly people with visual impediments to operate
  their smartphones.
• Austrian entrepreneurs Albert and Eveline Fellner
  watched Grandma struggling with her mobile phone
  and decided to expand their company, which
  manufactured stationary telephones, into the
  mobile market. The company now has a range of
  phones that are desirable even to people taking
  part in triathlons as its easy enough to use
  while running, and they look good in any handbag.
  The principle is one button, one function.
• With the changing demographic in developed
  countries, RE in the technology sector will
  increasingly come up with more user-friendly
  gadgets, better instructions and less complex
  processes in order to access a market that does
  not depend on the vagaries of employment and the
  financial market.

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Technology in retailing

• Tablets Lead the Way Towards Digital Convergence

• Tablets are predicted to overtake laptops as the
  dominant form factor in portable computers in
  volume terms by 2015.
• Growth will be driven primarily by the growth in
  availability and accessibility of data networks,
  the expansion of consumer-oriented cloud
  computing services, and, especially, rapid price
  erosion of hardware.
• The devices are likely to be highly dependent on
  cloud services for data storage and processing.
  Thus, the expansion of cloud services will
  facilitate volume growth and price erosion by
  decreasing the need for high performance internal
  components in tablets.
• Price erosion is likely to be the single biggest
  driving force in the tablet market over the
  foreseeable future. The decline will be
  particularly rapid in media tablets, for which
  significant processing power and connectivity
  features beyond Wi-Fi will not be a necessity.
• The pace of price erosion is likely to peak in
  2012-2013, as the average unit price is expected
  to decline to US319 from US497 in 2012. This
  decline will be accompanied by a rapid
  acceleration in diffusion rates in developing
  markets.

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Technology in retailing

• Economies are Setting the Rules Winners and
  Losers

Middle East and Africa
Middle East's reliance on tourists and
expatriates and Africa's rising levels of
disposable income sees the region pulling ahead
in projected value growth terms.
North America
Despite fears of a double-dip recession, growth
projections remain decent. The region remains a
hotbed for technological launches and
innovations, supported by a strong base of tech
adopters.
Latin America
Latin America's small sales base pushes value
growth. However, low disposable income levels
limit sales increase, in actual terms.
Given the presence of the world's two most
populous nations China and India the region's
key driver for value sales remains volume.
China's rise as an economic powerhouse is
underlined, with value outperforming volume sales.
Asia Pacific
Eastern Europe
In the forecast period, Eastern Europe is
expected to shake off the high inflationary
pressures, weak currencies and plummeting EU
manufacturing demand plaguing the region in 2009.
Western Europe
Weighed down by financial turmoil in Portugal,
Italy, Ireland, Greece and Spain, Western Europe
is projected to continue to flounder over the
forecast period.
Price erosion and continued frugality in
Australasia are expected to limit value growth.
Australasia
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• Internet retailing
• Growth trends and analysis
• The future of payments

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Technology in retailing
Near Field Communications (NFC)

• NFC and the Ecosystem
• NFC technology can be used for a wide variety of
  applications, especially in high volume and low
  value transactions.
• This includes the use of NFC

• Payment
• For mobile payments as a replacement for
  credit/prepaid cards and to store credit/bank
  information.
• Ticketing
• To purchase and add stored value to the tickets
  to access transportation gates and gain event
  entry.
• Sharing
• To aid the transfer of documents and content
  across electronic devices.
• Service initiation
• To activate a service on another device, which
  allows for data transfer, to gain access to
  websites and discounts on smart posters, amongst
  others.
• Pairing
• To establish Bluetooth connection by bringing
  devices to NFC hotspots, by configuring
  networks automatically between a pair of Wi-Fi
  devices.

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Technology in retailing

• Mobile Phones as the Digital Wallet

• Key consumer statistics
• Having identified the key parameters that must
  exist for NFC mobile payments to successful take
  off, we now explore how and why mobile phones can
  become the new digital wallet. This implies that
  consumers can leave their homes with basically
  nothing but just their mobile phones in hand.
• A quick review of the compelling statistics in
  Euromonitors various researched industries,
  captured on the right, paints a rosy picture for
  the growth and penetration of NFC mobile
  payments.
• Specifically in the following slides, we will be
  exploring how mobile phones are evolving to be
  the one most critical consumer electronics item
  of ownership and where penetration of mobile
  phone subscriptions in less developed pockets are
  robustly gaining momentum, if not, already on par
  with developed markets.
• Over the 5 year period of 2011-2015, smartphones
  will become the top product choice for new
  purchases (as opposed to feature phones) and
  increase its percentage contribution
  significantly as a total of mobile phone sales
  globally.

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Technology in retailing

• Mobile Phones as the Digital Wallet

• Beyond mobile phone ownership, an online poll by
  Accenture shows that consumers in developing
  markets such as India and China are more
  receptive to mobile payments than consumers in
  developed markets, such as in Europe and the US.

Source Accenture online poll of consumers
indicating if they favour using mobile phones for
most payments
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Technology in retailing

• Markets Ready for NFC Mobile Payment 2012

Identifying potential NFC mobile payment markets

• The accompanying table pits the top 14 markets
  across the different success factors identified
  by Euromonitor International as crucial to NFC
  mobile payment success and identifies countries
  that possess three or more of the five variables.
  A higher score rating indicates higher success
  potential.
• The results clearly draw light to developing
  markets as possessing strong potential for NFC
  mobile payment adoption, rather than the
  conventional belief that modern systems benefits
  largely from presence in developed markets such
  as US and Western Europe.

Country Smartphones Card payment transactions Chained fast food Expenditure on land transport Store-based retailing
Brazil þ þ þ þ þ
China þ þ þ þ þ
Spain þ þ þ þ þ
US þ þ þ þ þ
France þ þ þ þ ý
Japan ý þ þ þ þ
Mexico þ ý þ þ þ
South Korea þ þ þ þ ý
UK þ þ þ þ ý
Canada þ þ þ ý ý
Germany þ ý þ ý þ
India þ ý ý þ þ
Italy þ ý ý þ þ
Philippines þ ý þ ý þ
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Technology in retailing

• Visual Stores

• Tesco Plc, the third largest global retailer
  launched virtual shops in subways in South Korea
  under the name of Home Plus in 2011.

• Result
• The number of new registered online members rose
  by 76 and online sales increased by 130.
• Home Plus (Tesco) is No1 in online sales and
  improved its position in the offline

• Reducing Costs
• Innovation and competitive differentiation.
• Time Saver (South Korea is in the top three of
  the worlds hardest-working countries)
• South Korea has more than 10 million smartphone
  users in a population of less than 50 million.

Is the trend spreading?
2012 In a tube station in Portugal