Going global in search of innovation - Guest Column - Brief Article

DSN Retailing Today, Sept 23, 2002 by Bob Verdisco

As anyone in the industry will tell you, retail competition has become increasingly fierce over the past decade. And the economic uncertainties of the past two years have dampened consumer confidence and added another degree of difficulty for retailers.

Despite the shaky economy, many mass retailers have continued to thrive in today's intensely competitive arena by consistently offering value; i.e., competitive prices, broad selection, quality and convenience. These are the elements that have made mass retail stores the preferred shopping destinations for millions of consumers worldwide. Economic conditions will eventually stabilize and we will return to a period of steady, sustainable growth. The competitive atmosphere, however, will only become more challenging. The key to success in this environment will be a heightened focus on the consumer.

Years of research have shown that consumers, while always searching for value, also are looking for a satisfying shopping experience. The failure to provide that experience has contributed to declining customer loyalty and lost sales. Forward-thinking retailers--who have already mastered the value equation--will maintain their competitive edge by enhancing the shopping experience through the following: a better store environment, with more dynamic design, layout and merchandising; more effective shopper communication and marketing; and better accessibility and service options for consumers. In short, these retailers will ride ahead of the pack by operating the store of the future.

To draw the blueprint for that store, IMBA is spearheading an unprecedented industry study of retail innovation around the world. Our Global Innovations Initiative will identify retail innovations in 10 world markets--such as Barcelona, Berlin, London, Monterrey, Moscow, Paris, Reykjavik, Sao Paulo, Shanghai, Singapore and Warsaw--in 2002 and 2003.

The program's global, consumer and cross-disciplinary reach has captured the interest of not only leading companies in the United States and abroad, but also governments, trade organizations and academic institutions with a vested interest in enhancing consumption through better retailing.

This unique program, supported by an advisory council of senior executives from IMRA's retail and supplier member companies, will yield a wealth of new store concepts and merchandising techniques, and a new standard for measuring "shoppability" to use in rating the retail experience. Many of the study's findings will be translated, distributed and promoted in 11 major countries and, given the direct involvement of key government and trade agencies, could become the primary resource on mass retailing innovation.

The project gets under way later this month when members of the advisory council and IMRA staff will journey to Paris to exchange insights with French retail executives and trade associations. Key issues will include industry trends, supply chain and sourcing practices, and labor challenges affecting mass retail in the United States, France and worldwide.

Why are we studying retail innovation outside the United States? For one, mass retailers are major players in the global arena and learning what works in the broader marketplace will help ensure their continuing success. For another, gaining insights from outside our normal markets, established distribution channels and core product categories will promote fundamental, rather than incremental, changes in current business models.

And then, there's the trip to Paris ...