New perspectives for retail: that was the 71st International Retail Summit

The last 18 month have undoubtedly left their mark on retail. But which trends have emerged as a result? And will they remain with us? How has the pandemic changed corporate culture and management concepts? What are the consequences for the West's relations with China? These and other questions were the focus of the International Retail Summit 2021. A summary.
15 September, 2021 by
Neue Perspektiven für den Retail: Das war die 71. Internationale Handelstagung
GDI Gottlieb Duttweiler Institute

Time is shrinking to real time. Everything happens in the now. The short-term thrill is becoming more important than long-term customer satisfaction. Dopamine beats serotonin. The time between desire and fulfilment is getting shorter and shorter. What is innovative today will be the mass product of tomorrow. This development is linked to global networking, which leads to an interdependence of different ecosystems. Everything is interconnected. We are moving from being space people to time people. This also changes our relationship to the environment. Increasingly, we live in a metaverse, a mirror image of the world in which the virtual world is enclosed in the real world. Rooting ourselves in the offline world and relying on physical proximity are increasingly becoming luxuries. At the same time, virtual proximity brings its own threats – look at how companies have increased surveillance of their employees, for example. People are increasingly becoming indoor species in a world that asks (too) much of them. This retreat into the interior is reinforced by factors such as global warming or increasingly poor air quality. Time spent online is increasing. This makes it even easier for tech corporations to hack human attention and monetise the data gained. People are becoming easier to manipulate. The previous battle for land and concrete, especially the battle for warehouses, is becoming one for platform and cloud space in the virtual world.

Tech giants have grown massively since 2010. However, the retailers who work with them have not enjoyed the same success. Accordingly, cooperation with the tech giants does not create added value. The fact that brands still stick with them has to do with false narratives – such as that consumers spend time on platforms like Google or Facebook and that you have to be part of their ecosystems to be successful. Brands rely on digital ads on these platforms, for example, because they believe they can reach their potential customers in this way. The fact that most people close ads is not considered. Another problem is the lack of awareness of intellectual property. Many brands sell their products through platforms and thus lose sovereignty over the price. Non-enforcement of laws also contributes to the power of tech giants. It is up to brands to use their own power and make a difference. By questioning existing narratives and acting independently of the tech giants, for example. At the legal level, laws adapted to the technological state of the art are needed to create fair competitive conditions and, for example, sanction the negative side effects of the mail-order business. These include the high environmental impact of packaging and transport. New trade organisations are also needed to support companies in the digital age.

The pandemic has revealed the limitations of a “puppet-string mentality” in management. To be able to act quickly in unpredictable situations, a different corporate culture is needed, one that enables rather than restricts. First, on a social level: employees need self-orientation skills. These need to be actively promoted in everyday life – for example, by encouraging employees to take the initiative. In practical situations, therefore, they will be able to act autonomously in the interests of the company, its employees and, especially, its customers. Second, a different culture is needed at the technological level: technology should be understood as something that enables, that makes new things possible. Hornbach, for example, has been investing in technological infrastructure for years, in terms of both communication channels within the company and its online business. This made it possible to adapt quickly to the situation last year – in the administrative sense, but also in terms of direct sales. Based on the experience gained in the past year, the advantages of online and offline can now be combined in a targeted manner and used optimally. There is no longer either online or offline, but both.

Discounters have experienced particularly large growth in the past year. This is mainly because home consumption has increased as a result of the closure of restaurants and cafés, and because people have been unable to travel to other countries to make use of cheap shopping opportunities. Discounters gaining market share is not a new phenomenon. The sector has consistently been a winner in the last ten years. This is largely because it has succeeded in responding to changing customer needs. Today, it is no longer just the low price that counts but also, for example, freshness or sustainability in the food sector. In order to cope with this change from hard discounter to supermarket with discount prices, new shop concepts were and still are needed. This is not just about shopfitting, but a holistic strategic process in which factors such as branch, space, offer, presentation, organisation, processes and employees have to be included.

In 2020, customers made purchases less often, but purchased more each time. Less emotionally charged goods, such as toilet paper, were increasingly bought online, but fresh produce, for example, was still bought in shops. The consequence for retailers: instead of large spaces, they need proximity to their customers. Shops need to be where the customers are – at transport hubs, in neighbourhoods, villages or on company premises. In addition, a needs-oriented range must be offered. To achieve customer loyalty, retailers need to make female customers, in particular, feel like they are doing something good when shopping. This is not only about ensuring they are not paying too much but also about factors such as a pleasant atmosphere or sustainability at all levels. Building customer loyalty is especially important where there are no longer actual staff in a shop. Tegut, for example, relies on additional offers in its self-service shops, such as book-exchange shelves or public bicycle pumps. In this way, it succeeds in conveying a human touch and building emotional closeness to customers even without employees on site.

As in bricks-and-mortar retail, the shopping experience is also becoming increasingly important in e-commerce. Millennials and members of Generation Z, in particular, are used to visual, interactive content and are strongly experience-oriented. To meet their needs, online shops must be rethought. Not as a list of individual products but as visually oriented, creative and individually designable shopping worlds. Interactivity is essential here. So is a fast and uncomplicated checkout process. The design possibilities of virtual shops (in contrast to those in the real world) are infinite. For example, real existing shops can be visualised online, while, at the same time, purely virtual flagship stores can be opened. Avatars that guide customers through the virtual world are an option. And virtual showrooms can be designed for B2B businesses. Basically, the higher the experience factor, the longer customers stay on the site and the more they buy. Thanks to the data generated by this form of shopping opportunity, brands and retailers gain additional insights into the buying behaviour of their customers.

Every minute, a truckload of waste ends up in the ocean. This has massive ecological consequences. In 2018, (micro-)plastics were already being found in a third of all fish. The waste problem continues to grow. And the fashion industry is one of the main culprits, because its business model is based on the principle of buy and throw away. The fashion label Ecoalf takes a different approach by producing something new from what is thrown away. The textiles used in its collections are based on recycled waste materials of different origins. For example, old fishing nets made of high-quality nylon, hundreds of thousands of which lie at the bottom of the sea; plastic bottles; cotton waste from the textile industry; or coffee grounds from the catering industry. The mission: to create products that have the same quality and design standards as the best non-recycled alternatives.

The second-hand clothing and accessories market is booming. In the USA, the industry is growing 20 times faster than the clothing market as a whole. This has to do with a change in customer behaviour. Young generations, in particular, prefer to use rather than own. This is a potential that brands are discovering for themselves. Circular business models are gaining in importance. The tech company Reflaunt has developed a technical solution for this. It enables customers to resell their products conveniently via the website of the respective brand. Payment is made in cash or (more valuable) shopping credits, which can be used for the next purchase. This creates loyalty for the brands and monetises their second-hand market. In addition, reselling through their own website allows them to track the resell journey. Brands thus gain insight into the “second life” of their products – for example, how often they are resold and at what price. In addition, counterfeit goods can be detected more easily.

The traditional book trade is suffering. Some 60% of books in the US are now sold through Amazon. On this basis, it is not profitable for many independent bookshops to enter the online trade. At the same time, they are losing their in-store customers to the big online marketplaces. is an e-commerce platform that offers independent bookshops an online sales opportunity. They can register for free, orders are fulfilled by a wholesaler and the profits flow into a common pool from which the bookshops get an equal share. The aim of the non-profit organisation is to preserve book culture and to challenge Amazon for a share of the market – for example, by encouraging people to link to instead of Amazon when recommending books on websites or in newspapers. In the first year of’s existence, eight million books were sold in this way.

Technology has become a systemically important part of society, as electricity, railways and cars once did. New technologies trigger systematic changes in the market. Whereas in 2010, people searched for the lowest prices on the internet, today they compare products. So, instead of price comparisons, it's now about expertise and recommendations. But brand behaviour is also changing. Brands want to address their customers directly. They are trying out new channels and no longer focus on B2B, but on B2C. This way, they receive all sales data themselves. The old value chains are disintegrating. Two questions dominate: how do I get to the customer and how does the product get to them? Today, there are many answers to these questions. A physical shop could be opened. Or an online shop could be set up with a free-shipping offer and advertised on various channels. In 1990, there was no such choice. Retail is changing and so is the advertising industry. Advertising today has a completely different pricing structure and is no longer defined in the same way that it was 30 years ago. The advertising industry is booming, despite uncertainty about what exactly advertising will be if there are suddenly no more cookies as a result of new data protection regulations.

The technological standard in China today is higher than in most Western countries. This is largely due to the Chinese government’s investment in digital infrastructure. Since May 2020, the government has been striving for a dual circular economy. The domestic market is to be strengthened so that it is less dependent on international markets and technologies. China is turning away from the West. A kind of cultural renaissance is underway, which is, for example, producing many creative companies. At the same time, China is resuming its historically leading role in the world economy. The centre of the world is moving east – technologically and economically. In some areas, such as food services, China has already overtaken the US. E-commerce has completely replaced offline trade. The same process is happening in other industries, such as banking or the media. Despite its high GDP, China is the country with the largest income gap in the world. This does not fit the communist ideology. Prosperity should increase in all strata of society. This is being addressed through, among other things, stricter government regulation of private companies. Big tech companies, in particular, are in the spotlight, as they have large amounts of data at their disposal and a massive influence in society, as well as economic ties to the West.

When talking about sustainability, people are often left out of the equation. Yet it is their consumption behaviour that has the greatest impact. Green Pea wants to positively influence behaviour with its sustainable shopping mall. Its mission is to change consumer behaviour into something positive. Instead of consuming out of a sense of guilt, people should consume sustainably for the joy of it, i.e. to do something good. Green Pea wants to turn sustainability into a business opportunity.

Thanks to science, food can now be produced faster than society is growing. It is no longer the shortage but the global distribution of food that is the problem. For the future, there is also the question of how long natural resources will last. This is because the enormous increase in agricultural production has greatly reduced biodiversity. New strategies are needed to counteract this development without reducing yields. This requires a greening of conventional agriculture. This can be achieved by combining concepts from organic farming with the latest technology. The change must be gentle; a dairy or meat farmer will not become a vegetable farmer overnight. But the use of green space can change: more cattle and sheep, fewer pigs and chickens. Nevertheless, change also needs the food industry and consumers to act. If consumption does not become more sustainable, nothing will change. Such a development can be promoted through education, but also, increasingly, through government regulation processes.

The foundation of future forecasts is usually the past. The predictions are therefore based on assumptions about a world that does not change. However, it is black swan events like the COVID-19 pandemic that significantly change society. Swiss AI helps companies be better prepared for such events by developing possible scenarios for a company with the help of artificial intelligence. The advantage of AI analysis is that much more data from different subject areas can be combined into systems and analysed, thus allowing more accurate forecasts to be made. For a retail company, this is worthwhile when searching for new locations, for example. But the analysis can also help companies adapt marketing strategies and products to local demographics.

Artificial and human intelligence are often compared, but the two function very differently. Humans should see AI as a partner that has skills they themselves do not have. Similar to how animals are used for certain jobs because of their special skills. Despite our knowledge of the nature of robots, we perceive them as living. We attribute human feelings to them. Appropriate design can reinforce this effect. Social robots behave in a very lifelike way and can be used for therapies – for example, in elderly care or as learning aids for children. These robots have similar effects to animal therapy. For example, they can lower patients’ blood pressure. Working with robots provides insights into the human psyche, our communication and how we interact with others. Knowledge about the social tendencies of humans helps guide the technological integration of AI more effectively.

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