Tags: Clarke | retail | shift | innovation

Tesco CEO: Seismic Shift Seen in Global Retail Industry

By John Morgan   |   Thursday, 20 Sep 2012 07:48 AM

“Tectonic plates are shifting” in the retail industry, as problems in the eurozone spread to other continents, but digital technology can provide a lifeline, according to Philip Clarke, CEO of Tesco, the world’s third largest retailer.

“We are in the first downturn of the digital age,” Clarke remarked at the World Retail Congress in London. “Digital technology – in particular smartphones – has become a lifeline, offering not just untold choice, information and access to bargains, but acting as a new and more affordable channel for entertainment and socializing.”

Clark said consumption is weakening in China, Thailand and South Korea – formerly international growth engines – in the face of economic turmoil in Europe.

Editor's Note: The ‘Unthinkable’ Could Happen — Wall Street Journal. Prepare for Meltdown

“These economies are vulnerable to the crisis in the eurozone, as well as inflation caused by high commodity prices,” he noted.

However, Clark said digital technology – smartphones in particular – could ease the pain by offering ways to personalize the shopping experience for global consumers.

According to new research from MasterCard, retailers in Europe believe the mobile phone will overtake the physical store, website and call center as the most important communication channel with customers by 2020. However, only 3 percent think the retail industry is keeping pace with current consumer demand for multi-channel retail.

Meanwhile, a study by market research firm Deloitte concluded smartphones’ influence on in-store sales would more than triple in coming years – from 5.1 percent of annual retail sales now to 19 percent by 2016, amounting to $689 billion in sales.

“Consumers’ store-related mobile activities are contributing to – not taking away from – in-store sales, and our research indicates that smartphone shoppers are 14 percent more likely to convert and make a purchase in the store than non-smartphone users,” said Alison Paul, vice chairman of Deloitte.

Nearly half (48 percent) of smartphone owners surveyed by Deloitte said their phones have influenced their decision to purchase an item in a store, and 61 percent said they had used their devices to shop while in a store.

Editor's Note: The ‘Unthinkable’ Could Happen — Wall Street Journal. Prepare for Meltdown

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