Is retail ready for 2022?
New report highlights a changing global landscape as BRIC markets become leaders and Africa will offer a new frontier.
By 2022, the emerging countries of China, India, Russia and Brazil will have become four of the six largest retail markets in the world, according to a new report from the Economist Intelligence Unit.
Released today, the report predicts that the Chinese retail market will be worth $8.3tn by 2022 - around a quarter of global retail sales and twice the size of the United States’ at $4.5tn.
India will be next in line at almost $4tn, followed by Japan ($1.6tn), Russia ($1.5tn) and Brazil ($1.2tn). In ten years the Indian retail market alone could be the size of Western Europe’s.
In contrast to this, weakness in the UK market could see polarised shopping habits – when consumers purchase staples from discounters to fund luxury purchases - leading to an even greater squeeze on mid-market retail by 2022.
Jon Copestake, Chief retail analyst, Economist Intelligence Unit and author of Retail 2022 comments: “The opportunities for retail over the next decade and beyond are enormous. But where the future markets will reside and the way in which we will buy goods will change dramatically. Retailers will need to evolve to adapt to this new landscape.”
E-commerce, m-commerce (sales made via smartphones) and s-commerce (sales made through social media) will transform global retail and 2022 will see online purchases account for one-third or more of sales in markets like the UK, compared to around 10% now. Mobile commerce will be a mainstream means of shopping by 2022, as more consumers make impulse purchases directly on mobile platforms. S-commerce, led by investment in traffic drivers such as Pinterest, will add a further dimension to virtual shopping. By 2022, bargain-driven technologies such as Groupon and mysupermarket will have merged and expanded into sophisticated sites tailoring and personalising the best offers for consumers.
‘Bricks & Mortar’ will fight back as traditional retailers respond to change by integrating online with physical store offerings. Physical stores will not disappear by 2022 but they will play a very different role. Many shops may operate as little more than showrooms, collection centres or customer service hubs. Augmented reality displays will become the norm, driven by smartphone applications.
Convenience will be king as consumers take a multichannel approach rather than ‘one-stop shopping’. Convenience store penetration will rise further by 2022 as the balance between price and convenience shifts back towards the latter.
Don’t miss these two important Retail Bulletin events:
The 4th Multichannel Retailing Summit, 6th February 2013
International Expansion Summit, 26th March 2013 - details to follow
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