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Business Times - 17 Jan 2007

Technology, globalisation changing retail landscape

(NEW YORK) Technology and globalisation are changing the retail landscape and successful retailers will be those who can respond and adapt to those changes, attendees of the National Retail Federation's annual convention were told on Monday.

Speaking to a crowded ballroom on Monday morning in New York, National Retail Federation president and chief executive Tracy Mullin, Metro AG chief executive Hans-Joachim Koerber, and Microsoft Corp chief executive Steve Ballmer said technology and the Internet have altered how consumers shop and what they expect from retailers.

'Through blogs and consumer reviews, customers are letting the retailer know how they feel about shopping at their store or website, and whether they like the products they brought,' Ms Mullin said.

Retailers who have set up customer reviews, where shoppers can give feedback on products they have purchased, have reported more satisfied customers and fewer returns, she said, because consumers can learn from the experience of others and avoid products with bad reviews.

'The consumer is absolutely in a different position today and going forward than the consumer was in the past,' Mr Ballmer told the crowd. 'The consumers' ability to get information, to be empowered, to know what's out there, to make intelligent decisions, to stay organised, to dispassionately assess alternatives, to be in control, has never been higher.'

He pointed to the fact that Time magazine's 2006 'Person of the Year' was 'you'. Consumers expect more personalisation, tailoring and customisation than ever before, he said, and they expect to be able to search and get information or shop from their home, over the Internet or on mobile devices.

'They expect to be at the centre of everything that the businesses that serve them do,' Mr Ballmer said. 'The ability for consumers to get information and be served in a variety of ways is only going to increase.'

Metro's Mr Koerber said the increasing digitalisation of consumers' lives is something routine 'that nobody can afford to ignore'.

He also said retailers cannot ignore the growth opportunities coming from emerging markets like China, Russia, Ukraine, and India. 'In India, retailing is undergoing a crucial shift at the moment as supply moves from small mom and pops to larger outlets,' he pointed out.

Mr Ballmer said that in India and China, organised retail is taking off 'in an unbelievable way'.

Mr Ballmer said competition is becoming much more global and more focused on giving the consumer 'exactly what they want', with retailers trying to differentiate themselves through different store formats or experiences.

Mr Koerber called on retailers to adopt global standards to make running businesses globally more efficient.

'Running a business like ours without true standardisation would be like trying to play a game between a European soccer team and the Pittsburgh Steelers,' he said, referring to the US professional football team.

While he said the game would be all about football - most countries outside of North America call soccer football - it would clearly be hampered by the different understanding globally of what football means. 'We cannot afford to apply different standards in different regions of the world where we do business,' he added. - Reuters