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How retailers are positively embracing multiple challenges
In this episode of the Retail podcast, the panel is joined by Ian McGarrigle to discuss the highlights and takeaways from this year’s event in Barcelona.
Our fourth episode features Thomas Harms, EY Global Retail Leader; Jon Copestake, EY Global Consumer Senior Analyst and Ian McGarrigle, Chair of World Retail Congress.
They discuss discuss the highlights and takeaways from World Retail Congress 2023 in Barcelona.
Key takeaways:
How retailers are positively embracing the multiple challenges they face
How retail business models are changing to become more shopper-centric
The continued growth in the retail value sector
How technology needs to be centered around the humans – staff and customers.
For your convenience, full text transcript of this podcast is also available.
Kait Borsay
Hello and welcome to Transforming Retail. The podcast series from EY for leaders in the retail industry around the world. I'm Kait Borsay and on this episode we've highlights from the World Retail Congress in Barcelona. The theme this year is retail leadership for extraordinary times. Joining us from the event in the capital of Catalonia in Spain are Thomas Harms, EY's Global Retail Leader. Hi Thomas.
Thomas Harms
Hello Kait.
Borsay
Ian McGarrigle, Chair of the World Retail Congress.
Ian McGarrigle
Hello Kait.
Borsay
Hello, and Jon Copestake, EY Global Consumer Senior Analyst. Hello, Jon.
Jon Copestake
Hi Kait.
Borsay
Thomas, I imagine it's been all hard work so far and no time for you to take in the delights of Barcelona?
Harms
Well actually I already arrived on Sunday, and I always use these trips to do some store tours and so Monday morning was my time to do that and it's really a beautiful city, full of energy, a lot of stores and really worth visiting.
Borsay
Well, I'm glad you've had a chance to see the sights. From a retail perspective what really stood out to you Thomas?
Harms
Well, I think the major shopping area is around Plaza de Catalunya and you see all the global international brands. So, everything you can wish for is there and you see their newest formats. However, I also took the opportunity to pass a little bit away in the neighborhoods and there I detected a number of fresh, Spanish formats that really stood out to me, a gift shop called Grey, a new beauty brand that is coming up here in Spain, all organic ingredients, very nice atmosphere in the store, good curation, good advice. So, you could really feel the spirit of the founder in the store, and I think this innovation in this mega city that is what makes it up and made it a great experience for me.
Borsay
Ian we'll look at this year's event in just a moment but first explain the background and the purpose of the World Retail Congress.
McGarrigle
Yes sure. So, it's great here in Barcelona because this is where the congress launched back in 2007 and the real idea back then when we launched the congress was, well we spotted a need and an opportunity to create a platform really for senior retailers from around the world to come together to discuss the critical issues facing the industry. Back then, which seemed a long time ago in all senses, the focus in retail was about international expansion and the opportunities for retailers to go across borders, and that was the real interest at the time. But of course, the world has changed, the industry has changed, and the issues are being changed, but the need for retailers to come together hasn't grown any less, in fact really, it's grown more. So, it's been great this week to see such a large number of really senior retailers.
Borsay
And why did you choose Ian, retail leadership for extraordinary times as the theme for this year's event?
McGarrigle
Retailers were facing multiple challenges on a macro level with the fall out still from the pandemic, but obviously also the ongoing situation with Ukraine and all that's done to the global economic and geo-political structure, and it felt to me, talking to retailers and they kept saying they'd never known a more challenging time. So, it was really thinking about the multiple challenges that retail leaders are facing, and so that's why I wanted to, as I say, using those words retail leadership because it really is about them as leaders. But how can their businesses establish leading positions through these uncertain times is another way to describe it and that's the thing that's continuing to prevail.
Borsay
Thomas you've been at the World Retail Congress for the past couple of days and I know you've been hosting a breakfast panel each morning which sounds really interesting. What have you been hearing from the industry leaders attending those panels?
Harms
Well, I think one important issue was that it was this transformation that is happening, people are the center of everything. So, meaning the shopper is critically important, getting a realistic view of the shopper regardless of the channels, the countries you are operating. So, the business models will become far more shopper centric. And the other thing is especially when we use technology that it also needs to work for the sales associates. So, this morning Greg said it needs to be invisible for the employee and for the shoppers. So, technology is only enabling all this change but should not add additional friction. So that stood out for me.
Borsay
Well let's get each of your event highlights now and get into some of the detail of what you've been hearing and experiencing. Jon, take us through a couple of the speakers that you've been hearing from and the messages that have really stood out for you.
Copestake
I can't really do this without talking about Scott Galloway because I think Scott Galloway was a fantastic speaker and kudos to Ian for getting him here. Great to have an outside in view as well. So, it was really good to hear him talking about some of the issues in technology, in media that he sees and whether or not you agree with him he's a fantastic speaker and a fantastic person to encourage debate and I think that's something that stood out certainly for me, and for the number of people that I spoke to here as well. But in terms of themes, I think it would also be hard to ignore generative AI. So last year there was talk about the metaverse, this year there's a lot of talk about how generative AI can actually enable businesses or enable retailers to develop new capabilities. So, I think those are the two things that really stood out for me so far.
Borsay
That's fascinating to hear about Scott Galloway. Of course, the famous podcaster and professor of marketing at NYU Stern, a huge name to have there at the congress. And Thomas what about any particular highlights for you?
Harms
Not being able to travel to Asia for a while due to COVID. I was impressed especially by the Asian speakers. So, we had Jennifer Woo from the Lane Crawford Joyce Group luxury department store chain and so I think it was impressive to hear their story, and then personally I was also very much impressed by a lady from India, Falguni Nayar, she founded Nykaa and within 11 years she has built a multi-billion dollar beauty business in India and it's really amazing how fast they have been growing their business, how enthusiastic they are, and that they also adopt newest technology and newest methods immediately. So, without normally evolution they are really jump steps ahead and I was really impressed to see that.
Borsay
So, what's been key to her success, what is unusual? I suppose the growth is incredibly quick isn't it but what's been fundamental do you think to how she's done that differently?
Harms
Well, I think first of all and there's a deep understanding of the local needs and then using newest technology, newest methodologies to fulfil this need in the local context. And the other thing is focus. When I looked at India, I'll always see this massive population and she clearly said okay, you cannot serve all the people that live in India at the same time. You start in one region, focus on a certain segment of consumers, adapting global beauty to local Indian needs, and I think that was the holy grail she found.
Borsay
Excellent. Ian, as the organizer, I suppose it's like asking you to choose between your favorite children here isn't it? But have you got a highlight or two that you'd like to share with us?
McGarrigle
Yes, that's a good way of putting it because after nearly three days my head is spinning with kind of all the sessions and the speakers trying to filter it all through. But I have to certainly agree with Jon about Scott Galloway he was as he always is he's so though provoking and challenging and I hosted a Q&A session with him after his main stage session, and what was fascinating to me was not a single retailer asked him a question about retailing. They were really very focused around his thoughts on the impact of social media and what it's doing to young consumers, young people and other sectors. He talked about AI but I thought that was interesting. But if I think about the retail speakers many stand out but for me there's two, I would particularly highlight. We had Hajir Hajji, CEO of Action, which is Europe's fastest growing non-food value retailer and we had Paul Marchant, CEO of Primark. So, two titans of the value retail sector. Primark obviously in fashion. Primark going against all the trends in many ways as is Action. They're opening stores at some incredible pace. They've come out of the pandemic where certainly Primark had to close all of its stores and it doesn't have a transactional website, but the way that it's bounced back and indeed the same with Action, and I think it reinforces some of the messages that I've taken from this. It's the laser like focus around the consumer and the customer which both retailers demonstrate and we've heard that many times. I think that's really important. And product as well I think that's absolutely key and also the people in the business. I think both spoke really passionately about people in their business.
Borsay
Jon, any other highlights for you before we ask you each for your one key takeaway?
Copestake
I was expecting this event to be largely talking about the challenges that retailers face, the macro-economic challenges, the disruption, inflation, cost, those are big elephants in the room for people to discuss. But what I was talking to Ian about before was actually I've noticed a lot of retailers here talking about the opportunity, so the air of positivity in the room was actually quite tangible and retailers were talking about how they can make things better. How they can take leadership. How they can resolve some of these issues and meet the challenges head on. And I thought that was really interesting because it could be very easy at a conference like this to get bogged down into the challenges, but actually there was certainly a solution-oriented approach to the way that retailers talked about it, and again, it's impossible to ignore but there was a lot of talk about generative AI. There's a lot of talk about how they can use AI to improve solutions, AI to engage with consumers, AI to build new business capabilities. So, I think that's certainly a hot topic going forward.
Borsay
Alright fascinating. Let's wrap up this podcast then with one key takeaway each that you'd like to share, something that you've learned at the World Retail Congress that'll help leaders in the retail industry to be resilient during unpredictable times. Let's go to you first Ian.
McGarrigle
For me it's as Jon said, there's no denying the continuing back drop of difficult extraordinary times but what I've taken is retail seems to be working it out. On one hand going back to basics and I love the focus around the consumers as I've already mentioned, and product. There's been a lot talked about, you're not going to win customers if you haven't got great innovative attractive new products all the time. So, I think that was it. But I think over laying that, is the tools that are going to make the business exciting, profitable, efficient, and yes AI is absolutely one of those tools but they're talking about technology, I've had lots of conversations and heard sessions where they've said we've got to use technology that suits our customers. And that's not one size fits all. I mean I've heard people saying like for our baby boom generation who are really important to us they want to engage and use technology in one way, Gen Z in another way, and I thought that was fascinating to hear about injecting humanity if you will into how you use technology and I think overall we could be seeing a really exciting new stage in retail with this unleashing of innovation and ideas that people are through that sense of it's really bad what are going to do. We're just going to batten down the hatches I think there's a real sense of the industry can move forward and engage with customers and build better business. So that for me that is a really exciting takeaway.
Borsay
Jon one key takeaway for you?
Copestake
So, one speaker who I thought was very powerful said that retailers shouldn't chase trends, they should create them, and I found that to be a very powerful statement because it is completely true. There's a high degree of potential for reactivity especially to the challenges retailers face today, but with all of the enablers that they have, their talent, their stores, their footprint, their digital footprint, the way they engage consumers and obviously technology. They have used this opportunity to create lots of new things and I think that's a key takeaway of what retail is becoming.
Borsay
Thomas let's give you the last word on your big takeaway from this year.
Harms
Maybe a little bit more high level. I think I heard that in general there's over capacity in the market. So, a lot of sales square footprint is already available. And retailers want to find out what is really their value proposition, so why do they exist? Why are they relevant for the shoppers? And then what are their real assets? So, I have they been successful in the past and then build a shopper centric business model around this. Knowing who you are and knowing why you are relevant and then deliver on this promise every moment you have a relationship or a touch point with the shopper.
Borsay
Before we go Ian, last year the event was in Rome, this year you're in Barcelona of course. Have you decided where you're going next year?
McGarrigle
Simple answer is no we haven't yet. We're looking at some exciting options. We really wanted to just test the water, talk to lots of people here in Barcelona and get some views. We will be announcing it very shortly.
Borsay
There you go the World Retail Congress still open to offers on next year’s venue that's what I'm reading into that. Well, that's it for this episode. Thank you to all of you, Ian, Jon and Thomas for sharing your highlights of the World Retail Congress. Join us again soon when we'll continue to look at how retailers can transform to stay relevant, also do subscribe to this series so you won't miss an episode. From me, Kait Borsay, thanks for listening and goodbye.
