Dynamic Business recently attended the 2006 IBM NRA (National Retail Association) Business Congress, held in Sydney, to hear key industry spokespeople discuss issues and trends affecting the retail industry.
Of particular interest, Fred Balboni, vice president retail industry executive for IBM Asia Pacific, outlined five key megatrends that will shape the retail industry as we head towards 2010:
- Diversity in consumer markets. There has been extreme shifts in age, wealth, ethnicity/culture, lifestyle patterns, household composition and value systems. Customers will selectively trade up or down within categories, favouring brands that provide them with differentiated value.
- Customers are becoming guarded against marketing tactics. They will seek greater control over their interaction with businesses.
- Information exposes all. Customers will become ‘super shoppers’, accessing information whenever and wherever they want it. Retailers will need to take advantage of this and participate in the information value chain.
- Mega-retailers break the boundaries. These retailers are exploiting a virtuous value cycle to attract customers, drive rapid growth, and are expanding in multiple dimensions—new formats, price positioning, geographies and categories. Competing retailers must find different niches, or be prepared to be acquired, or go out of business.
- Partnering becomes pervasive. Industries are reshaping into value networks, and retailers are partnering across the supply chains for greater customer value and increased competitiveness.