Gildenberg to Marketplace business session attendees: Being smart helps retailers grow

BOSTON — There’s a tremendous upside for retailers and suppliers, but that upside will come from doing things differently than in years past, as well as grappling with fragmentation. Those were a few of the key messages Bryan Gildenberg, chief knowledge officer of Kantar Retail, had for attendees of Monday morning’s business session at NACDS Marketplace in Boston.

“The challenge today is this: The core issue those under 43 are going to be grappling with for the rest of your career is not an issue of concentration, which was the issue people over 43 dealt with. The issue you are going to be dealing with is fragmentation,” Gildenberg said during his presentation titled “Retail Economics: The Operational Skills Required to Deliver in a Changing World.”

When ranked by sales added through 2016, it is estimated that the top five retailers experiencing the greatest growth will be Walmart, Amazon.com, Kroger, Walgreens and Costco — all of different retail channels.

“Those of you that have growth channels in your job title or portfolio, you have to think about this a little bit. There is no such thing; there are growth customers within channels,” Gildenberg said.

Nonstore retail, which includes all of the dot-com businesses, will experience significant growth, representing an estimated 30% to 35% of retail growth in the United States over the next five years.

Digital integration and creating an experience for customers will be important, which already is beginning to take shape in the form of interactive surfaces that complement products and purchase decision assistance with the benefit of product availability to help shoppers make better decisions in a digital way.

“For those of you with loyalty cards, one of the most interesting areas of work is going to be figuring out how the loyalty card and the mobile phone interact together, because that is going to be foundationally game-changing,” Gildenberg said.

Gildenberg also explained that “new convenience,” particularly for the bricks-and-mortar retailers, is comprised of four key attributes:

  • Immediacy (why the store?);

  • Smaller, proximate stores (to the store);

  • Operational excellence (in the store); and

  • Frictionless payment (through the store).

In order to succeed, retailers and suppliers also must recognize that younger generations are driving diversity. “If you are going to sell to people under 30 [years] and ethnic marketing is not a part of your world, then you are going to be missing an enormous part of the population,” Gildenberg told attendees.

Underscoring this point, the U.S. Census Bureau recently released data that indicated the nation’s Hispanic population grew four times faster than the total U.S. population between 2000 and 2010, with Mexicans representing the largest Hispanic group.

The recently released 2010 Census brief showed that the Hispanic population increased by 15.2 million between 2000 and 2010, and accounted for more than half of the total U.S. population increase of 27.3 million. Between 2000 and 2010, the Hispanic population grew by 43% — four times the nation’s 9.7% growth rate.

“The core thing to keep in mind: There is absolutely no correlation at all in the United States at the retailer level between your size today and your ability to grow. ... Being big as a retailer doesn’t help you grow — being smart does,” Gildenberg said.

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