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The retail market will continue to see changes in 2020. Which direction will it take and where will our attention be focused?
We asked commerce experts what challenges the retail market would face in 2020. Here’s what they said:
“The coming year will see domestic chains raise the white flag, either through bankruptcy or by seeking sanctuary with a foreign retailer. Digitization and a strong Swiss franc are driving cross-border trade; pure Swiss retailers are fighting to survive. In non-food online trade, trade platforms and marketplaces are growing. Amazon, AliExpress, Wish and Zalando, as well as the Swiss players Brack, Digitec/Galaxus and Microspot, will enjoy a disproportionate share. In e-food, there are growing signs that large retailers are seriously considering investment. It’s certainly possible that one of the existing stagnant formats, Coop@home or Leshop, will be replaced with a scaleable, digital omnichannel offer.”
Matthias Bucheli, Head of the Digital Commerce Competence Center, Post CH Ltd
“The current trend of ranges “only” generating customer frequency and no longer creating margins will continue in 2020. It will be increasingly important for retailers to evolve from being providers of product ranges to genuine solution providers. We think those retailers who succeed in developing real solutions to problems encountered in everyday life will become established on the market. We can already see a number of outstanding examples of this such as Keller Sports, which achieves long-term customer loyalty with its intelligent Keller Smiles loyalty programme. I believe there’s still untapped potential in the traditional retail model to build up additional service revenue. The longer we wait, however, the fiercer the predatory competition will be – playing even further into the hands of Amazon in particular.”
Ruppert Bodmeier, CEO, disrooptive.com
“The retail market will face greater challenges in 2020. There are three key aspects:
1. EASY: The Swiss GDPR is coming in 2020. A proactive approach to data protection is a competitive advantage. A concept can be developed in nine steps. Many retailers and online shops haven’t done their homework yet.
2. SEXY: Create lasting customer experiences (in B2B too) by connecting analogue and digital storytelling. Companies who combine both worlds will be successful and reach their customers emotionally.
3. SMART: Driving digital transformation forward is crucial: IoT, blockchain, marketing automation, AI and web TV. The ongoing optimization of sales activities is indispensable. Techniques such as kanban, lean startup, design thinking and customer journey mapping will help to optimize the customer experience.
These points strengthen the customer experience and inspire new ways of connecting analogue and digital.”
Prof. Martina Dalla Vecchia, lecturer at the University of Applied Sciences and Arts Northwestern Switzerland – Institute for Information Systems
“While the retail debate in many European countries was very much focused on the impressive dominance of Amazon from 2015 to 2019, we’ll be spending the next few years trying to understand how the Asian platforms, particularly via smartphone apps, are able to communicate with “our” customers far more quickly and with greater relevance. Amazon continues to scale back its role as a trade platform and is progressively strengthening its position as a provider of e-commerce infrastructure (storage, logistics, payment). The calls for greater regulation coming from all sides are equally loud and ineffective, though it will be less of a concern for Amazon and Facebook.”
Alexander Graf, Co-CEO Spryker Systems
“The retail market is currently facing major challenges. Consumers have become extremely demanding as a result of digitization and the opportunities it brings. Online retail is working better, faster and more conveniently – a trend set to continue in 2020. High street retailers need to respond and find ways to provide consumers with added value beyond their products. Digital solutions will also keep optimizing customer experiences: apps with value-adding virtual reality functions or intelligent changing rooms are no longer dreams of the future. And what do promising online and offline concepts have in common? They focus on the added value for customers! 2020 promises to be a great year, at least for customers!”
Dr. Kai Hudetz, Managing Director, IFH Köln
“Several things have gone wrong with omnichannel. There is too much of a focus on efficiency, economy, channels and convenience. In 2020, retailers need to realize that pleasure and the magic of shopping are crucial. Customers use, but don’t appreciate, things that are logical. Do you love Amazon? Customers are interested in things that mean something and trigger emotions. In a world increasingly determined by algorithms, it’s the subconscious needs that need to be met. Do you remember: the Mirácoli advert sells the love of family, not pasta. To put it another way: if anyone can sell bananas anywhere, customers will buy them from the retailer who can combine the purchase with emotions and meaning. Feelings and purpose are retail’s secret weapons in 2020.”
Olaf Kolbrück, Editor-in-Chief, etailment
“Online retail won’t yet have reached its growth limit in 2020. The big winners in this trend are the platforms, and these platforms are based abroad. The professionalization of online retail is very advanced. This will lead to more than just the steady closure of high street retailers in the coming year: online retailers who fail to keep pace will also be affected. Despite the apparently gloomy outlook, Swiss retailers and manufacturers won’t give up. The opportunities provided by digitization will be taken, specifically in developing new retail concepts, the clever use of data and the elimination of marketing stages. Business models which also focus on sustainability have more chance of being successful.”
Alexandra Scherrer, Digital Consultant, Carpathia Ltd
“Special themed offers and shopping experiences will remain high on the agenda for high street retailers in 2020. Customers will increasingly be expecting more than simply using sales outlets as goods storage and sales staff as shelf stackers, and will instead be looking for an all-round experience, with ambience and top-class advice. Online retailers will need to keep pace with this. The era of pixel-optimized online shops is over. Customers want the full-shopping experience both on- and offline. And this includes excellent after-sales service. Faceless and replaceable e-shops will become a thing of the past. The focus is now on individuality and providing a superb customer experience.”
Markus Peter, Organizer Connecta Bern, Post CH Ltd
“Voice commerce, the voice-controlled interface between customers and e-commerce providers, is set to spread massively in 2020. With the presence of voice interfaces growing in smartphones, smartwatches, smart loudspeakers and automatic board systems, etc., comfort and speed are two aspects consumers won’t want to do without. Thanks to major investments in technologies such as artificial intelligence and machine learning, voice interfaces will be considerably better and more appropriate for the mass market. They’ll enable online shops to penetrate new locations and customer micro-moments with their offers, such as the bedroom, the toilet, while showering, when cycling. This means customers will be easier to reach and at the precise moment when they need something, whether hands free or not.”
Michael M. Nussbaumer, Head of CAS Online Shop and Sales Management, Lucerne University of Applied Sciences and Arts (HSLU)
“As everyone knows, there are no limits to what’s possible with online retail. Among the 10 most popular online shops in Switzerland, four come from abroad. The Swiss are more than happy to spend their online francs outside Switzerland and frequently benefit from low prices. Looking at the findings from the e-commerce trend indicator over the past four years, it’s clear that the purchase of Asian goods on international marketplaces is now more widely accepted. And this trend is set to increase. How can Swiss retailers hold their own against international competitors? Swiss retailers know what makes their customers tick and can use this competitive advantage. The key lies in customer proximity and centricity, on taking a personal approach with customers and valuing their loyalty. In short, offering an excellent customer experience – and making sure the shop leaves a lasting impression.”
Ricarda Raemy, Customer Insights Specialist, Post CH Ltd
“The importance of bargain hunting and the shopping experience remains strong. Existing “sale and event types” are being continued, or recreated as “(early) pre-season sales”, “(pre- to) mid-season sales”, “(really) late-season sales” and “no-it’s-still-not-over season sales”. These are freely combined with events such as Black Friday, Cyber Monday or Singles’ Day. This is unlikely to be enough, however. Retail creativity is called for and there will be new (sale) events for the world's consumers, with 2020 also providing new shopping experiences. The number of pop-up and experience stores will continue to grow. And on top of this is the challenge of achieving the best possible performance in terms of CO2 emissions. The latter in particular will be increasingly under the spotlight in the next few years.”
Prof. Dr. Kim Oliver Tokarski, Head of Advanced Training, Bern University of Applied Sciences BFH
There’ll be a greater awareness of genuine sustainability, the demand for simple digital aids will continue unabated and customer accessibility will be even more individual and demanding. What will not change, however, is the demand for top-quality products, an affinity for lower prices and the joy of a positive experience thanks to personal contact and friendly, helpful staff. Looking at these developments, I am optimistic that LANDI will once again look back on a successful year when 2020 comes to a close.”
René Kaiser, Head of Communication, LANDI Switzerland
“The current frequently cited trends, such as AI and voice, will not save any companies from collapse in 2020, which is why the following two themes will be key issues in the coming year:
Data, data, data: Retail needs to get into shape to face the future and solve problems in its core systems. Harmonizing data resources will be the key to successful trading in the future. Traders must understand their customers’ journey and be there for them at the relevant touch points.
D2C with more service activities: Manufacturers will increasingly turn to direct, continuous sales. They won’t touch their prices, but will invest increased revenue in an optimum service for end customers. And customer data will of course be more relevant to manufacturers to help them sell their products successfully in the future.
In addition to these two themes, there will of course be a greater focus on the issue of organizational forms in 2020.”
Andreas Wüthrich, Head of Digital Commerce Consulting, Post CH Ltd
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And with this blog article, it’s time for us to sign off for the festive season. We’d like to thank all of our readers, editors and everybody who lent their support and assistance. We wish you all the very best over the Christmas period and a successful 2020.
We’ll be back again with more exciting blog articles in January 2020.
Enjoy your days off and don’t let slow Internet get you down.