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Deloitte’s 18th annual Global Powers of Retailing report explores innovative trends in the sector

Published: 21 January 2015

The top 2501 global retailers generated revenue of US$4.4 trillion in fiscal year 2013, each with an average size of more than US$17.4 billion, according to the 2015 Global Powers of Retailing, Embracing Innovation report from Deloitte Touche Tohmatsu Limited (DTTL), in conjunction with STORES Media. This year’s report explores innovative trends in retail, forecasts for 2015 as well as the strategies retailers are utilizing to address the disruptive changes impacting the sector. 

The 250 largest retailers around the world are analyzed based on their financial performance, geographic region, product sector and e-commerce activity. Revenue growth for the top 250 retailers, which began declining in 2011, continued to slow in fiscal year 2013. According to the report, sales-weighted, currency-adjusted retail revenue was 4.1 percent for the top 250, following a 4.9 percent gain in fiscal year 2012. While growth continued to decline, nearly 80 percent of the top 250 (199 companies) posted an increase in retail revenue in fiscal year 2013.

“The sluggish global economy in 2014 left many consumers financially constrained and retail sales under pressure. Thus, the prosperity of the global retail sector in 2015 will very much depend on the economic stability of several of the largest economies.  China, the Eurozone as well as a few key emerging economies had a particularly tough 2014. Comparatively, the US and British economies continue to do well, with indicators pointing to the likelihood of strong growth in 2015 and possibly beyond,” said Dr. Ira Kalish, DTTL Chief Global Economist.

Despite the challenging environment, 14 Chinese retailers made it to the Top 250 list for fiscal year 2013, versus 13 from previously. “China’s economy has slowed down and continues to show signs of weakness. Growth is now slightly above 7 percent which, if sustained, would be the lowest pace of growth in nearly two decades. Chinese retailers, which have been weighed heavily by rising wages and RMB appreciation, also need to bear the brunt from shrinking consumption as a result of the government’s crackdown on corruption. To succeed, retailers need to keep abreast of the change in spending preference and pattern of the consumers; one of which is unarguably the rising popularity of on-line shopping,” said David Lung, Consumer Business Managing Partner, Deloitte China.

Kings Lau, Retail sector Managing Partner, Deloitte China, echoed that “Like in other parts of the world, online shopping is gaining momentum in China. The government is targeting to deliver broadband internet services to 400 million households by 2020. We have reasons to believe that online shopping will become even more popular in China. The fact that two Chinese retailers occupied two positions in the list of Top 10 e-retailers reflected the rising popularity of e-commerce in China.”

(Traditional Chinese version)

Top retail trends in 2015

  • Travel retailing –  International tourism is set to continue to rise above expectations despite continuing global geopolitical and economic challenges. The expanding middle classes of emerging markets are traveling to the world’s capitals and boosting retail sales.  For example, over half of France’s 16 billion Euros luxury industry depends on tourists2.  In 2015, retailers are expected to increasingly cater to high-spending travelers, especially emerging market tourists to drive growth.
  • Mobile retailing – Mobile retailing is expected to continue to grow aggressively. Sixty-five percent of the global population will be using a mobile phone by 2015 and an estimated 83 percent of internet usage will be through handheld devices.3 Retailers will need to respond by offering free in-store Wi-Fi and mobile-friendly retail websites optimized for different kinds of personal devices.  Privacy and security will become increasingly important as trust, transparency and protecting customer information will be critical in retaining loyalty as mobile retailing becomes the norm. 
  • Faster retailing - Speed continues to remain an important trend in retail. This includes: “fast fashion” (getting runway styles to the stores as soon as possible); limited-time-only products and flash sales to drive urgency and immediate purchase; pop-up establishments to quickly get products and services to market and build buzz; and self-service check-out and kiosks to reduce or eliminate waiting. In 2015, retailing is forecast to get even faster to meet consumers’ desires. Millennials will be driving much of this as they are the largest generation, with a lot of spending power, and carry a lot of influence. They prefer fast response and immediate gratification, and retailers will cater to that.
  • Experience retailing - Retailing is no longer just about the product, but the experience. Retailers will continue to explore innovative ways to enhance the buying experience for their customers through social media campaigns, festivals, fashion shows and interactive displays.
  • Innovative retailing- The retail industry will continue to be disrupted by new technologies and innovative competition. More retailers are likely to adopt innovative practices, embrace technology and use it in creative ways.  

Vicky Eng, DTTL Global Sector Leader, Retail: “The retail sector is going through a significant period of change.  The speed of innovation and the disruption being felt across the industry will continue, as the demands of customers continue to increase. To succeed in this environment, retailers will need to respond quickly to threats and opportunities ensuring they are quick to implement innovations of their own. This will require a connecting strategy, capabilities, and specific initiatives, guided by the insights provided by market data.”

 

 

[1] The analysis is based on publicly available data for fiscal year 2013 (encompassing companies’ fiscal years ended through June 2014).

[2] Inside France’s €16.8 Billion Luxury Goods Market, Luxury Society, 13 February 2014. http://luxurysociety.com/articles/2014/02/inside-frances-168-billion-luxury-goods-market

[3] Two Billion Smartphone Users By 2015: 83% of Internet Usage From Mobiles, DazeInfo, 23 January 2014. http://www.dazeinfo.com/2014/01/23/ smartphone-users-growth-mobile-internet-2014-2017/

Top retail trends in 2015

·      Travel retailing –International tourism is set to continue to rise above expectations despite continuing global geopolitical and economic challenges. The expanding middle classes of emerging markets are traveling to the world’s capitals and boosting retail sales.  For example, over half of France’s 16 billion Euros luxury industry depends on tourists[2].  In 2015, retailers are expected to increasingly cater to high-spending travelers, especially emerging market tourists to drive growth.

 

·      Mobile retailing – Mobile retailing is expected to continue to grow aggressively. Sixty-five percent of the global population will be using a mobile phone by 2015 and an estimated 83 percent of internet usage will be through handheld devices.[3] Retailers will need to respond by offering free in-store Wi-Fi and mobile-friendly retail websites optimized for different kinds of personal devices.  Privacy and security will become increasingly important as trust, transparency and protecting customer information will be critical in retaining loyalty as mobile retailing becomes the norm. 

 

·      Faster retailing - Speed continues to remain an important trend in retail. This includes: “fast fashion” (getting runway styles to the stores as soon as possible); limited-time-only products and flash sales to drive urgency and immediate purchase; pop-up establishments to quickly get products and services to market and build buzz; and self-service check-out and kiosks to reduce or eliminate waiting. In 2015, retailing is forecast to get even faster to meet consumers’ desires. Millennials will be driving much of this as they are the largest generation, with a lot of spending power, and carry a lot of influence. They prefer fast response and immediate gratification, and retailers will cater to that.

 

·      Experience retailing - Retailing is no longer just about the product, but the experience. Retailers will continue to explore innovative ways to enhance the buying experience for their customers through social media campaigns, festivals, fashion shows and interactive displays.

 

·      Innovative retailing- The retail industry will continue to be disrupted by new technologies and innovative competition. More retailers are likely to adopt innovative practices, embrace technology and use it in creative ways.  

 

Vicky Eng, DTTL Global Sector Leader, Retail: “The retail sector is going through a significant period of change.  The speed of innovation and the disruption being felt across the industry will continue, as the demands of customers continue to increase. To succeed in this environment, retailers will need to respond quickly to threats and opportunities ensuring they are quick to implement innovations of their own. This will require a connecting strategy, capabilities, and specific initiatives, guided by the insights provided by market data.”

 

Top retail trends in 2015

·      Travel retailing –International tourism is set to continue to rise above expectations despite continuing global geopolitical and economic challenges. The expanding middle classes of emerging markets are traveling to the world’s capitals and boosting retail sales.  For example, over half of France’s 16 billion Euros luxury industry depends on tourists[2].  In 2015, retailers are expected to increasingly cater to high-spending travelers, especially emerging market tourists to drive growth.

 

·      Mobile retailing – Mobile retailing is expected to continue to grow aggressively. Sixty-five percent of the global population will be using a mobile phone by 2015 and an estimated 83 percent of internet usage will be through handheld devices.[3] Retailers will need to respond by offering free in-store Wi-Fi and mobile-friendly retail websites optimized for different kinds of personal devices.  Privacy and security will become increasingly important as trust, transparency and protecting customer information will be critical in retaining loyalty as mobile retailing becomes the norm. 

 

·      Faster retailing - Speed continues to remain an important trend in retail. This includes: “fast fashion” (getting runway styles to the stores as soon as possible); limited-time-only products and flash sales to drive urgency and immediate purchase; pop-up establishments to quickly get products and services to market and build buzz; and self-service check-out and kiosks to reduce or eliminate waiting. In 2015, retailing is forecast to get even faster to meet consumers’ desires. Millennials will be driving much of this as they are the largest generation, with a lot of spending power, and carry a lot of influence. They prefer fast response and immediate gratification, and retailers will cater to that.

 

·      Experience retailing - Retailing is no longer just about the product, but the experience. Retailers will continue to explore innovative ways to enhance the buying experience for their customers through social media campaigns, festivals, fashion shows and interactive displays.

 

·      Innovative retailing- The retail industry will continue to be disrupted by new technologies and innovative competition. More retailers are likely to adopt innovative practices, embrace technology and use it in creative ways.  

 

Vicky Eng, DTTL Global Sector Leader, Retail: “The retail sector is going through a significant period of change.  The speed of innovation and the disruption being felt across the industry will continue, as the demands of customers continue to increase. To succeed in this environment, retailers will need to respond quickly to threats and opportunities ensuring they are quick to implement innovations of their own. This will require a connecting strategy, capabilities, and specific initiatives, guided by the insights provided by market data.”

 

Top retail trends in 2015

·      Travel retailing –International tourism is set to continue to rise above expectations despite continuing global geopolitical and economic challenges. The expanding middle classes of emerging markets are traveling to the world’s capitals and boosting retail sales.  For example, over half of France’s 16 billion Euros luxury industry depends on tourists[2].  In 2015, retailers are expected to increasingly cater to high-spending travelers, especially emerging market tourists to drive growth.

 

·      Mobile retailing – Mobile retailing is expected to continue to grow aggressively. Sixty-five percent of the global population will be using a mobile phone by 2015 and an estimated 83 percent of internet usage will be through handheld devices.[3] Retailers will need to respond by offering free in-store Wi-Fi and mobile-friendly retail websites optimized for different kinds of personal devices.  Privacy and security will become increasingly important as trust, transparency and protecting customer information will be critical in retaining loyalty as mobile retailing becomes the norm. 

 

·      Faster retailing - Speed continues to remain an important trend in retail. This includes: “fast fashion” (getting runway styles to the stores as soon as possible); limited-time-only products and flash sales to drive urgency and immediate purchase; pop-up establishments to quickly get products and services to market and build buzz; and self-service check-out and kiosks to reduce or eliminate waiting. In 2015, retailing is forecast to get even faster to meet consumers’ desires. Millennials will be driving much of this as they are the largest generation, with a lot of spending power, and carry a lot of influence. They prefer fast response and immediate gratification, and retailers will cater to that.

 

·      Experience retailing - Retailing is no longer just about the product, but the experience. Retailers will continue to explore innovative ways to enhance the buying experience for their customers through social media campaigns, festivals, fashion shows and interactive displays.

 

·      Innovative retailing- The retail industry will continue to be disrupted by new technologies and innovative competition. More retailers are likely to adopt innovative practices, embrace technology and use it in creative ways.  

 

Vicky Eng, DTTL Global Sector Leader, Retail: “The retail sector is going through a significant period of change.  The speed of innovation and the disruption being felt across the industry will continue, as the demands of customers continue to increase. To succeed in this environment, retailers will need to respond quickly to threats and opportunities ensuring they are quick to implement innovations of their own. This will require a connecting strategy, capabilities, and specific initiatives, guided by the insights provided by market data.”

 

Notes to editors:

Top 10 global retailers, 2013

Retail revenue rank (FY13)

Name of company 

Location/Country of origin

2013
Retail revenue 
(US $mil)

1

Wal-Mart Stores, Inc.

U.S.

476,294

2

Costco Wholesale Corporation

U.S.

105,156

3

Carrefour S.A.

France

98,688

4

Schwarz Unternehmens Treuhand KG

Germany

98,662e  

5

Tesco PLC

U.K.

98,631

6

The Kroger Co.

U.S.

98,375

7

Metro Ag¹

Germany

86,393e

8

Aldi Einkauf GmbH & Co. oHG

Germany

81,090e

9

The Home Depot, Inc.

U.S.

78,812

10

Target Corporation

U.S.

72,596

Top 10²

$1,294,698

Top 250²

$4,354,562

Top 10 share of Top 250 retail revenue

29.7%

¹ Metro changed its fiscal year from end of December to end of September. Fiscal 2013 results reported here include the 9 months ended 30 September 2013 plus the quarter ended 31 December 2013 to create a 12-month period equivalent to prior years. 
² Sales-weighted, currency-adjusted composites 
e = estimate

 

Chinese companies in Top 250, 2013

Retail revenue rank (FY13)

Name of company 

Location/Country of origin

2013
Retail revenue
(US $mil)

51

A.S. Watson Group

HKSAR

19,230**

59

Suning Commerce Group Co., Ltd.

China

16,616

69

Gome Home Appliance Group

China

13,441e

78

China Resources Enterprise, Limited

HKSAR

12,258

92

JD.com, Inc. (formerly Beijing Jingdong Century Trade Co., Ltd. and 360buy Jingdong Inc.)

China

10,827

98

Dairy Farm International Holdings Limited

HKSAR

10,357

104

Chow Tai Fook Jewellery Group Limited

HKSAR

9,979**

129

Shanghai Friendship Group Incorporated Co.

China

8,166**

156

President Chain Store Corp.

Taiwan

6,136e

162

Belle International Holdings Limited

HKSAR

5,856

179

Dashang Co., Ltd.

China

5,047

188

Chongqing Department Store Co., Ltd.

China

4,733

189

Yonghui Superstores Co., Ltd.

China

4,733

197

Nonggongshang Supermarket (Group) Co. Ltd.

China

4,538e

e = estimate
** Revenue includes wholesale and retail sales

 

Top 10 fastest-growing retailers 2008-13

Retail revenue rank (FY13)

Name of company 

Location/Country of origin

2013
Retail revenue
(US $mil)

Top 250 ranking

1

JD.com, Inc.

China

10,827

92

2

Yonghui Superstores Co., Ltd.

China

4,733

189

3

Albertson's LLC

U.S.

23,000

43

4

Jumbo Groep Holding B.V.

The Netherlands

9,420e

111

5

Chongqing Department Store Co., Ltd.

China

4,733

188

6

Chow Tai Fook Jewellery Group Ltd.

HKSAR

9,979**

104

7

Southeastern Grocers, LLC

U.S.

10,126e

102

8

Steinhoff International Holdings Ltd.

S. Africa

8,217

128

9

OJSC Dixy Group

Russia

5,628

166

10

SMU, S.A.

Chile

3.823**

241

e = estimate
** Revenue includes wholesale and retail sales

 

Sources: Published company data and Planet Retail

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