WORLD RETAIL CONGRESS 2013: Retailers must embrace online "or perish"

By Michelle Russell | 8 October 2013

Around 10% of the UK’s retail sales last year were carried out online, says Javelin

Around 10% of the UK’s retail sales last year were carried out online, says Javelin

Retailers need to "transform themselves or perish" as the growth of the online channel picks up pace, a leading European omni-channel retail consultancy has suggested.

Tony Stockil, CEO of Javelin Group told attendees at the World Retail Congress in Paris yesterday (7 October) around 10% of the UK's retail sales last year were carried out online. "In all markets there is rapid growth and that is creating significant opportunities for retailers."

Stockil said it has become "critical" for retailers to have an online presence, which he suggested was important not just to boost sales but to drive traffic into stores.

"The incentives for retailers to transform themselves or perish is becoming more important."

Stockil added the overall retail market in the developed markets was not growing and suggested retailers are able to adapt to new channels will "have an advantage over competitors".

Stockil took Amazon as an example - an online retail behemoth that took US$60bn in sales last year. This, he said, is forecast to double in the next three years.

"This is a monster and is threatening everybody's retail business, regardless of the category. The retailers most under threat from this are distributor retailers - big box retailers in key categories. AmazonFresh is being rolled out. They think they have the model right now."

In June, Amazon rolled out its grocery service in the US to a second city, Los Angeles, after it was launched in Seattle in 2007.

Amazon also has an online shop offering food and beverages in Germany, which it launched in 2010.

"Imagine how conventional European supermarkets are thinking about this?" Stockil asked WRC attendees. "When [Amazon] takes share from those that have not established an online presence yet."

Stockil said the solution lies in the retail offering, which he suggested needed to include digital.

"What can we do? Have a better offer ... more proprietary ... we need to be authors of our own brand ... have more assortment, and having a strong digital footprint is essential. We need better formats, we need to be more convenient in our stores. But all this will be enabled by truly joined-up digital capabilities.

E-commerce, he suggested, was essential in order to compete effectively in today's fast changing retail environment. "Click-and-collect has been a killer app in online retailing. The ability to target a customer on a smartphone when they are about to make a purchase can make a real difference. The customer is changing very fast indeed and we need to transform faster.

"We need to think 50/50 now. It's not inconceivable to think that 50% of our business will be carried out online in the near future."

Sectors: Multichannel, Retail

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