«THE SLOWER YOU MOVE, THE FASTER YOU DIE»
Interview with David Bosshart (PDF)
What's "re-generation" about?
We're living in times of increasingly fast change, which means rapid ageing and breaks with the past. Traditionally successful approaches are being called into question and there's a growing need for "re-generation": one generation vanishes, a new one comes, and lots of things are done differently.
How does this affect retailing?
Retailers are in fact affected very directly by these changes because of their closeness to the end-users. It's not just products that have expiry dates – shops and even business models have them as well. After a certain time they, too, need to be given a thorough revamping in order to remain attractive.
There's nothing new about change.
Digitisation of ways of reaching the customers is changing behaviour and brutally speeding up the erosion of traditional certainties and practices. New communication, end-customer sale and payment systems are currently bringing about a huge leap forward in development. However, many retailers are still failing to perceive this leap, or they are playing down its importance or denying that it's taking place at all, believing that "This doesn't affect me. I sell food, so if freshness and price are right, customers will come to me anyway."
They underestimate the changes.
And how! "The slower you move, the faster you die." Retailing is undergoing a level of change not experienced since the invention of the department store. Significantly, this particular format, so often written off, is once again under exceptionally strong pressure to adapt. We'll be addressing this development at the summit, where a number of high-calibre representatives from the retail sector will discuss it: for instance, Andrew R. Jennings from Karstadt, Lovro Mandac from Galeria Kaufhof and Marcel Dietrich from Magazine zum Globus.
Who'll be spared?
Nobody, whether it's food or furniture that's being sold. But the "re-generation" required differs in terms of urgency and scope: everyone needs to adapt, but they don't all need to do so at the same speed. Pressure is particularly strong on retailers and their store concepts, but also on those who work behind the scenes to provide infrastructure services. In some categories there is even a need for more than just regeneration: those who do not act in good time will vanish. The main question in all cases is: to what extent must I change my business model?
Are there any examples?
The music industry has already been turned upside down, now it's the turn of the book trade. As we already predicted years ago, consumer electronics are increasingly sold online. Apple's App Store has proved to be a category killer. But the sale of toys, and even of luxury goods, is also migrating to the Internet: in the USA four Ferraris are sold via mobile phone each month. This would have been inconceivable until just a short time ago, but the inhibition threshold has been lowered. For some time now, food retailers have been feeling the impact of small convenience stores stealing their customers, and they're coming under further pressure from the breathtaking pace at which online sales to end-users are growing.
What does this mean for brands?
Action is required from retailers and brand manufacturers alike. Thanks to new forms of customer contact – e-shops, social media, apps, rating sites – manufacturers can move closer to their customers. In the case of private brands the entire value chain, including the end product and the shop design, is affected.
"Re-generation" sounds a bit like "sustainability" – is it a new marketing hype?
If you think that, have fun. "Green" or "social washing" will lose its nimbus sooner or later. Anyone who regards "re-generation" as just another buzz word is going to have a very, very hard time of it. Customers are calling for credibility – from the use of resources through product quality to design and packaging.
Which companies are good examples?
We'll provide an overview of such companies at our retail summit: who's tackling the problem, who's not? Where do we stand, what else is in store for us? The UK department stores Selfridges, Liberty and John Lewis (including Waitrose) are making a very good job of it. In the gastronomy sector Starbucks is on the right track, after the return of Howard Schultz. McDonald’s is also sending out the right signals with its new labelling system and concepts. Here, by the way, we can see that even the most perfect systems now have to be adapted. The always fast-moving fashion sector has already undergone major changes. And telecommunication companies have long since understood how to permanently reinvent themselves. We'll hear more about this at the summit from Swisscom CEO Carsten Schloter.