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18 Apr 2018

Retailers must adapt or die to compete in future

Retailers must adapt or die to compete in future
Legacy retailers can create modern businesses but the old models need to be adapted for the consumer

Kingfisher Chief Executive Veronique Laury laid out stark choices for retailers if they wish to thrive in the future, in a wide-ranging discussion at the World Retail Congress in Madrid yesterday.

Although she foresaw a more digital future, Laury also insisted that the “robotic predictions” put forward in some other sessions would not apply to Western markets, where both retailers and consumers are accustomed to high quality retail already.

“In China, they moved from small retail to digital in one go. In Western markets, we have created organised retail over a long time,” she said. “So firstly you have to change a lot, but also you have to look at the people. We as an industry are the ones who employed many low skilled people, so we should to simply replace them.”

She also said that you cannot layer technology on top of stores. “People will have a different role, she said, reflecting that of the 78,000 people the company employs across Europe, “in the future we will probably need a little less but less in some roles, more in others.”

Kingfisher started the digitalistion of its business three years ago and Laury said that because as a DIY group it sells “projects not products”, there was a myth that this will not be sold online.

“Not true,” she insisted. “At Screwfix, 28% of sales are online. I really think you need to have both.

Amazon has kicked evey other retailer to go a little faster. Their key has been the focus on customers, showing the way forward for all of us.

“If you think of a retailer as simply between the product and the consumer, then they have won the battle. So we need to talk more about the offer, you have to do something more, around the service or the offer.”

To determine the future direction of the business she said Kingfisher would stick with what the customers want, not the business model. “It's a challenge because you have to change the way you do everything,”she said, advising: “Be bold, brave, test and don't wait until you know the answer. No-one has the answer.The real difference is the pace and how fast you have to change. Either you change or die.”

Laury said she considered the company “lucky to be in the UK” because the digital is so developed, describing the market as “almost a lab for the rest of the countries. Also, there are a lot of stores closing. Other markets may think this won't happen but I predict it will come to France in three years, Poland in five to six years, and also Rusia is catching up very fast.”

In terms of product ranges, she pointed out that on the web there is a “filter of what you need and reviews. In-store there is not the same insight, so we don't need all that stock. I don't think that we'll need all that product in the future.”

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