The 9th International TCG Retail Summit took place in May this year. The conference series provides a unique platform for top industry leaders to exchange views on the issues that are currently affecting the industry and the future of retail. Based on the experience of the event, the chairman of the event series, Chris Buecker was asked about the issues, areas of focus and challenges facing the industry’s key players.
What are the trends and main topics that are currently of most concern to retailers and manufacturers in the TCG sector?
Currently, one of the most important issues is the geopolitical situation and the evolution of the economic environment. Inflation and the subsequent loss in consumer spending has caused a serious downturn in retail sales across Europe. The decline is particularly marked compared to the unexpectedly large increase during the pandemic years. Although this year’s results are still above 2019 levels despite the decline, market players always compare the performance of the current year with the previous year. And compared to last year, there is a significant decline, which is also reflected in companies’ profitability. In turn, falling demand are putting downward pressure on prices, which is not conducive to the alignment of interests between traders and manufacturers.
The role of the shopping experience is also receiving a lot of attention in the industry. There is a growing number of examples of the less product, more experience approach in retail. In practice, this means solutions such as dedicated areas for gaming products, for example, or in-store service points such as a service desk or even a café. Sustainability remains an important issue, and one to which almost all operators are paying attention. Technology also remains an important consideration. On the one hand, through digital transformation, where the importance of marketplaces continues to grow, and on the other hand, we are witnessing the expansion of commercial ecosystems. A particularly interesting issue in terms of technology is the development of artificial intelligence. This could transform the way the sector operates along the complete value chain, including areas such as pricing or assortment optimization.
How do economic circumstances and prospects affect industry expectations?
Despite the unfavorable situation, expectations are optimistic. Market players generally expect growth from the second half of the year, although to varying degrees in different markets. Although the industry expects a recovery, growth in the second half of this year is unlikely to compensate for the first half’s decline, so overall 2023 will be somewhat below last year. Technology and innovation, both in terms of product and commercial development, are seen as the engine of growth.
The retail industry is experiencing many changes and there is a lot of uncertainty in the market. How far ahead is the industry thinking? How much room is there for longer-term strategies?
There is no doubt that we are living in very unstable times, which makes it difficult to plan and think ahead. I believe that in this situation, we need to plan in the safest way possible. In terms of longer-term ambitions, I believe that the focus should be on increasing the stability of production and supply chains.
We can hear a lot about the importance of customer focus these days. This sounds somewhat as if the customer was not important before. How is today’s approach really different?
The customer has always been, and will continue to be, at the heart of everything. But in recent years, retail has sometimes become too focused on technology, but from time to time it gets in the way between the retailer and the customer. Some market players have recognised this, but many retailers still have work to do in terms of customer experience. There is a big opportunity here for smaller firms, where there is less turnover and they can better implement ideas to get closer to the customer. The formula is actually very simple: just think from the customer and work backwards.
But in recent years, retail has sometimes become too focused on technology, but from time to time it gets in the way between the retailer and the customer.
Sustainability is one of the most frequently appearing topics in the TCG sector today. Of course, environmental friendly approach is self-evidently justified, but why has this aspect become so prominent recently?
Sustainability is no longer a trend, but an integral part of the way the industry works. In addition to ethical and environmental considerations, it is also important for companies because they can lose customers by not paying attention to this aspect. The number of customers who care about sustainability is growing, and young people are particularly sensitive to this issue. Moreover, EU regulations also require manufacturers to be aware. Ecodesign for sustainable products, which sets minimum environmental requirements for manufacturers, the ‘Right to Repair’ directives, or even the ‘eco-label’, which aims to establish a single set of criteria behind the various eco-labels, are all pushing the market towards environmental awareness. In addition, education and information for consumers should be stepped up. More and more companies are putting emphasis on this.
Reflections from speakers at the 9th International TCG Retail Summit
During the 9th International TCG Retail Summit, held in May this year, nearly 40 prominent industry leaders shared their experiences and opinions with conference participants. The following is a brief summary of the key moments from the presentations of some of the speakers.
Professor Dr. Andreas Dombret, Senior Global Consultant at Oliver Wyman, former member of the Bundesbank and ECB, expressed confidence that Europe’s economic growth will return to normal next year. But he also warned that the future remains uncertain, with the possibility of interest rates rising again, potentially tightening pressure on consumers and leading to business failures. It also expressed deep concern about the health of the global real estate sector, highlighting the potential impact of a sharp downturn on the economy as a whole.
Dr Karsten Wildberger, CEO of CECONOMY& MediaMarktSaturn, said that the company is on the path of moving away from consumer electronics towards what he calls “experience electronics”. He stressed that innovation is essential to meet the changing needs of consumers in the digital age. Mobile, social media and collaboration with influencers have emerged as powerful tools to engage consumers, build loyalty and drive sales.
Pieter Zwart, founder and CEO of Coolblue, highlighted the importance of excellent service, effective use of data and investing in employee training and attitude as key factors for success.
Carsten Olesen, President of Harman INTERNATIONAL Consumer Audio, stressed that businesses cannot thrive when the planet is in crisis and encouraged retailers and brands to work together to grow effectively. Among the solutions discussed were extending the life of products through repair and recycling, and introducing rigorous and verifiable sustainability standards.
What other aspects are nowadays emphasized by market players?
Gender issues are also starting to receive increased attention in the TCG sector, as women are less represented in senior positions, especially in industry. This attention is particularly visible in US companies, but also an increasing number of European companies. In the next 10 years, I believe there will be more women leaders and the gap will decrease considerably. TCG Summit is supporting this process by launching the TCG Women Leadarship programme. And on the consumer side, the role of diversity and inclusion seems to be growing. There are already examples of retailers responding to the needs of neurodiverse consumers, but also attention to older people who may need more explanation about a technology.