Time to Re-read my WRC-report from 2019?

This year's WRC 2020 in Rome was supposed to take place in April, but got postponed beacuse of the Corona Pandemic. Then it was supposed to take place now in October instead, but had to be cancelled and replaced with next year's WRC in 2021 instead. Nothing odd or strange with that given the circumstances.

But at the same time, this pandemic situation has only challenged and stressed several of the challenges within retailing even more, and the need for the next World Retail Congress has perhaps never been bigger? Meanwhile, I have decided to share my last year's sumarising report officially and for free here on LinkedIn. Hopefully it can deliver some valuable thoughts for new readers, at the same time as I believe it is an important reminder to those who read it already last year? (It is a 32 page document covering three days of conference including some reflections and conclusions).

THE BREHMER RETAIL REFLECTIONS

From WRC World Retail Congress 2019 in Amsterdam 14-16th May

“Economies never crash upwards”

 Martin Wolf, CBE, Associate Editor & Chief Economics Commentator, Financial Times

This is a summarising document of my own notes, observations, my work as a member on the Expert Jury and additional reflections, in connection with WRC 2019 in Amsterdam. I have tried to structure different topics under new, own summarising headlines, which hopefully makes it easier to navigate among the content.

1.1          General Reflections

1.2          High Velocity Retail

1.3          From Walmart to High Tech Fashion

1.4          JD.COM - The unknown Amazon and Alibaba? 

1.5          The Macro Economics 

1.6          Looking back to see the Future

1.7          Generation Z takes the steering wheel

1.8          From a Philosophical point-of-view

1.9          A Bright Future – Our World Universities

2.0          AI – The most Exciting and Scary Innovation ever

2.1          The Amsterdam Scolding & A much BIGGER question

2.2          Concluding Reflections

Like in my previous report, I have cherry picked content from several various presentations and debates and discussions, and mixed them with my own reflections and questions throughout this document. It of course limits the picture that I only managed to attend a few sessions, as a result of the format for the Congress.  Well over thousand participants, apparently 180 speakers (!) in total, a few plenary sessions and then up to five different break-out themes going on in parallel during three days, plus a permanent exhibition in-between, says it all. This year I prioritized to attend the six shortlisted universities of the world, and their presentations/start-up pitches, which was utterly amazing! All six ideas have potential, and I fell in love with most of the presenters :)

I hope you find it interesting, meaningful and entertaining and wish you very welcome to get in contact for further discussions, business opportunities and various projects. You can either contact me directly via email hm.brehmer@gmail.com or approach me via Sephia on thesephiagroup.com and my contact details there.

Please enjoy

Best Regards

Magnus Brehmer

1.1                       General Reflections

After the first day (and its previous evening’s opening cocktail), I actually felt less enthusiastic this time than last year. My immediate and spontaneous reaction was to start scrutinising the content and structure, as well as the speakers’ performances. But after reflecting a few days, and having started to analyse my own notes, I’m not sure that is entirely fair. It might rather be a combination of those details, and a general, more tensed atmosphere in the macro world this year that caused this feeling? However, and as showed later in this report, it is clear to me that WRC has never been more needed than right now!

Already at the drinks the evening before the opening day, I could feel a sense of tensed, worried and anxious air in the room. And by lunchtime the opening day, I identified a slight smell of “fear” among people. It was like the rapid, and since long time on-going, change and digitisation within the retail industry had reached a new mental tipping point. The continuous closure of physical stores, the laying off of people and the more and more empty shopping malls around the world hadn’t stopped, but rather increased in speed. (Not that anyone suggested it wouldn’t last year, but it anyway felt like it now had reached a new level of pain in the industry).

Of course there are several macro changes in the world economy at the moment, which are playing an important role in creating this atmosphere. There is after all more than 10 years after the crash of Lehman Brothers, and we know that the economic up-turns rarely last more than a decade at the time. (On the other hand we also know that the downturns rarely last more than 2-3 years at the time, before things start to recover).

We have of course the never-ending nightmare around Brexit, and in addition an important EU-election taking place right as I was writing this report in end of May 2019. There is of course the clear protectionism promoted by the American President, and several trade-war-like threats being launched between the US and the rest of the world, which are all posting potential horror scenarios for the global trade mechanisms. Not at least the relations between the US and China, which dramatically impacts the world trade of course. 

But perhaps most important of all, from a consumer sentiment point of view, is the current Climate Panic and Climate Depression spreading around the world among especially younger generations. The recent EU-election clearly confirmed that the climate matter has re-alerted itself in society, where the green parties (especially in Germany) went significantly forward. This WILL HAVE AN IMMEDIATE AND HUGE IMPACT on the entire consumer societies of the world, and it happens right now.

Having said that, and in hindsight, I think the WRC 2019 could have created an even more constructive atmosphere, if this situation had been put on the table in a clearer way from the very beginning in the agenda. It would have acknowledged a lot of the stress that many participants seemed to feel, and thereby “letting it out”. And then allowing everyone to focus on a more â€œfuturistic optimism”, to borrow an expression from the legendary Apple designer Jonathan Ive.

Further more, I would have encouraged a clearer focus on the consumers and behavioural economics, as the starting point of everything, and then let the technology and logistic parts deliver towards that. Now, my feeling was that the impressive technology parts were much stronger, and kind of high-jacked the overall content in a way. They are also very important, but balance and the right focus is everything. 

The late Swedish industrialist Peter Wallenberg, 1926-2015, once stated that his legendary father and his uncle, were both very fascinated by technology and loved to initiate and invest in new projects regarding airplanes, robots, telecom and ball-bearings etc., without any equal interest in how on earth all those products should be sold? 

“Innovative technology that can’t be sold and generate any profit, we can do very well without. It represents no benefits, but usually very high costs of development” Peter Wallenberg (Around 2008)

Peter himself on the other hand, had been selling drilling equipment for Atlas Copco to the mines in South Africa and Rhodesia/Zimbabwe, driving thousands of miles in the bush and spent years in dusty offices and demonstrating the tools on spot, deep down in the mines. He told that the often animated discussions he had with the father in the latter’s shiny Bank Palace in Stockholm, only revealed that the old man had little knowledge about how their companies’ products actually were sold, nor used by its customers. 

WRC 2020 must avoid having an agenda and speakers, once more repeating obvious things regarding change, disruption and digitisation. Everyone knows that by now. Repeating that the speed of change is increasing even more is also unnecessary. 

A strong agenda must now focus on how the changed consumer behaviour and their dreams and needs, must be catered for by a retail world breathing a completely new culture. The original role of the retailer, as a selective curator and enabler, making items and services available to buy for the consumers, including simplifying their choices, needs to be transformed and rejuvenated into a totally new environment. One where almost the whole (old) role of the retailer has been “stolen” by the smartphones of the consumers.

It would be great if WRC can provide specific know-how, tools, tips & ideas and preferably some evidence of inspiring and energising, successful business cases, which the participants/delegates directly can translate to value-for-money by their active participation. The sponsors of WRC will only be interested in continuing investing money in this event, as long as the lion part of their existing and potential customers are going to be there. Hence there is no conflict in continuing to prioritise and lifting the quality of content/speakers even more. 

Which I know is the ambition of its management. Mr. Ian McGarrigle, the Chairman of WRC, have responded exceptionally professional and constructive to my feedback, and I know that they are bringing it with them in their planning for next year’s event, which I’m already looking forward to with great excitement. Let’s hope that WRC 2020 can bring signs of a well-needed sunrise!

However, and despite this somewhat harsh opening in my report, WRC 2019 as a whole DID DELIVER A LOT OF IMPORTANT FOOD FOR THOUGHTS AND REFLECTIONS! The fact that the top-level retailers of the world are gathering for 3 full days to exchange knowledge and experiences, all in one place and to challenge and discuss various initiatives, IS a unique opportunity. And there were several golden nuggets also this year, which I will do my best to comment upon in the rest of this report.

1.1                       High Velocity Retail

After the normal breakfast sessions during day 1, the WRC 2019 was opened by its Chairman, Mr Ian McGarrigle, and the Super-professional facilitator and broadcast journalist, Ms Naga Munchetty.  They are both very skilled and reliable in their roles. Given my feedback in the General Reflections under 1.1, the requested stronger focus on the Consumer as the only starting point for every other agenda could have been even more emphasised during their opening speeches/introductions. The current “re-alerted” debate on Climate and Sustainability could also have been given a stronger presence already here. 

Then the session with Sander van der Laan from Action and James George from OC&C, under the headline “High Velocity Retail”, most likely had the purpose of setting the scene and summarise the global Situation Analysis. I realise that I would most likely have gone into this trap myself when creating the agenda. It seems absolutely right and the obvious starting point. 

The point that Retail Industry is being disrupted and is changing in high speed was very clear already last year in Madrid. Now the similar thing was said under the new headline “high velocity”. 

I believe the well-intended starting point, unfortunately created a slight frustration during the opening of the congress, which did not help most of the following speakers, as almost all of them (completely unnecessary) also had an opening regarding “speed” and “dramatic changes”. 

But as stated, I would probably have stepped into the same trap myself, and it only reminds me how important it is to constantly “be in the market”, to live and breath the same air as the audience, in order to pick-up those subtle, small signals and sentiments between the drinks and by the coffee machines. This is still a challenge for the algorithms by the way, how to cater for the empathic dimensions of personal relationships. And its connections with brands.

1.3               From Walmart to High Tech Fashion

The very impressive Walmart Executive, Judith McKenna, who also was awarded and recognised later during the congress, shared some of her observations and experiences, which was interesting and impressive. 

Again, of course, she also had to state some obvious things to start with, but then shared some of the extraordinary challenges it means to run a business of half a trillion USD in sales and 11 000 stores(!). Walmart is actually managing some 55 different brands around the globe, as a result of their growth and acquisitions. 

She also shared a number of important reflections, like the Social Media’s way of putting the spotlight on “TRUST” as one key factor. “It’s not enough to sell products and items anymore, you have to explain who the company is”.

Judith McKenna also clearly stated the importance of gender equality in the retail world, but acknowledged the challenge. She said that you need to start by the list of candidates for the top-jobs, and make sure they are diversed and equal from the beginning. But she also said that she would not compromise on who’s right for the job, and indirectly claimed that it is great if we have a 50/50 situation in the future, but that it would not be beneficial if this was achieved through any sort of compromises.

As a contrast to this huge retail machine called Walmart, where volume and low price maintains the fundamental brand position, I visited one of the innovative “labs”, where a most amazing young, American electrical engineer, named Janet Liriano was presenting her findings. And she had some breath taking findings and ideas to talk about.

She explained how far the innovations are in terms of functional fashion and high-tech clothing. On the other hand she started off by explaining that “solar panels are not batteries”, which apparently is a common misunderstanding in the world. Then she put a future value of what was named “The smart soft goods industry”.

Secondly, she explained that any kind of future high-tech fashion item needs to pass the washing machine test. If it isn’t possible to machine-wash your digital  T-shirt, it will never fly. She also explained that the innovations are now happening very fast, and that there already today are clothes and fashion items, where the electrical components ARE possible to machine wash.

So, in a not too distant world, your smart phone could be exchanged towards a shirt with all the existing and new functions being integrated. One that perhaps might be charged by body heat and movement for example? What would that mean? How would that influence the consumer behaviour among your retail customers?

Marc Rosen from Levis was mentioning a denim jacket with an integrated touch-pad on the arm, which you can answer your phone with while riding a bicycle for example, without taking the hand from the handlebars.

Lots of exciting opportunities when high-tech becomes integrated in our daily lives and hence influences our consumer behaviour.

Clearly there are young and well-educated, energising and professional engineers like Janet Liriano and her friends, who are putting in their very best of thoughts and creativity, to make this happen in the best possible way.

When I talked to her and to the equally impressive Harsh Shah, from “Fynd”, at the opening party the evening before the congress, I just realised how fortunate we are. Why? Because we have these brilliant young people, who have a fantastic and pragmatic attitude towards change. Not only do they represent creativity and professionally skilled specialists, but they are also demonstrating a true entrepreneurship that must be described as very promising for the future.  

They are well educated, self-confident and humble at the same time. They are actively open to listen and learn in all situations, given that the other party has something relevant to share. If not, they shift their focus of attention pretty fast. I can’t help reflecting and connecting it to this new generation of “Youtube-behaviour”. Also in a cocktail party environment, IRL (in real life), they seem to function like short, snappy, videolized content, where the point need to be the opening statement, or at least being communicated within a few seconds, and then perhaps backed-up with an explaining sentence or two :) Not more, or focus is going to be lost. 

The culture challenges in work places as well as in society at large, as Generation Z is entering must not be underestimated.  

1.4               JD.COM - The unknown Amazon and Alibaba?

Lunch Session with Professor Jianwen Liao, Chief Strategy Officer of JD.COM, hosted by Ian McGarrigle from WRC.

Fireside Chat with Mr. Chenkai Ling, Vice President of Corporate Strategy & Investment of JD.COM, facilitated by Naga Munchetty from WRC.

JD.COM is a huge and impressive e-commerce player in China, not very well-known in the west world. But fact is that it might be the biggest retailer in China, and is for sure the largest competitor to companies like Alibaba and T-Mall etc. Likewise, it is obvious that a company like Amazon.com is keeping a close eye on their development and progress. Being on the Forbes Top-500 companies, they are of course well-known by market analysts and industry experts, but perhaps less so among the global consumers?

Professor Jianwen Liao was a confident presenter and knew he had an impressive story to tell. Having said that, my feeling was that he (as so/too many) was making the mistake to use technology and logistics as the starting point for their analysis and story. There were so many questions for him by us specially invited lunch guests, and so little time before the next point on the agenda, that only a few managed to be raised in public. However, I managed to get a chat with Professor Liao one-to-one at the end, where I confronted him with my observations (lack of consumer centric perspective).

He immediately took on the challenge, and started to describe the Chinese consumers based upon five different segments, categorised based upon preferences rather than demographics. But it anyway felt that the consumer dimension of their business is something that is brought in at the end, after the technology and logistics. How sustainable will this be? As long as the Chinese market is showing significant domestic growth, perhaps YES? But how about it when the market matures, the competition increases and consumer demands get more sophisticated? 

Professor Liao managed to get some laughs as he described their objective of creating a “CIA-organization” :), in this case referring to “Co-create”, “Innovate” and “Agile”. 

The Fireside Chat with JD.COM’s Vice President of Corporate Strategy & Investment, Mr. Chenkai Ling, did not feel particularly informative. The very skilled Naga Munchetty did her best, but my only notes after their session was yet another confirmation that “consumer behaviour is changing fast in China” (shifting to e-commerce), and that their strategy to handle the Chinese market is to offer a “bounder-less retailing experience”. But no revealing/interesting explanations on “how” this was implemented, nor how it helped them differentiate compared with Alibaba, T-Mall, Amazon etc.

Noticeable as well, regarding both the gentlemen from JD.COM and their sessions, was that neither the word “climate” nor “sustainability” were mentioned even once.

1.5               The Macro Economics

Presentations by:    Martin Wolf, CBE, Ass. Ed. / Chief Economic Comm, Financial Times

DR Ira Kalish, Chief Global Economist, Deloitte

When Martin Wolf entered the stage with his seniority, authority and undisputed knowledge regarding the macro economic situation of the world, he lifted the overall level of the entire congress a step or two.  He was well rehearsed, had a rhetorically good start, referring back to his previous presentation some 10 years earlier, where he predicted the financial crash and alerted the retailers to prepare for “winter times”.  With a twinkle in the eye, he speculated whether it was the fact that he was right, that made it take 10 years before he was invited to the WRC again? 

He then delivered some no-nonsense and hands-on facts that cannot be ignored.

·      Economies never crash upwards

·      Trump stated already 2016 that “Protection will lead to Prosperity”, so nobody can claim to be surprised when he is now imposing tolls and import taxes etc. He is doing what he always said that he would.

·      Actually the development of the Chinese economy should not come as a surprise to the world either. Stepping back and taking a strategic look on its macro development between 1992 and its prognosis for 2022 (a 30 year perspective), suggests that it is following the outlined picture.

·      The economic shift in the world, between west and east, has never been as dramatic as now in world history.

·      China’s depth situation is posting a potential meltdown for the entire world economy. The risk that it actually happens is very difficult to speculate about, as political decisions and directions in the world are less stable than in a very long time. 

·      As late as 5 years ago, no one would even have suggested that USA should launch trade tolls, as it is just totally wrong! This has the potential power of causing/launching a world economy crash, “or worse”(!)

·      The Brexit issue is such a stupidity that it is “impossible to address with the existing choice of vocabulary” :)

·      The Geopolitical conflict between the US and China could escalate to a crisis impossible to estimate.

DR Ira Kalish from Deloitte followed up Martin Wolf’s presentation with comments, being interviewed by Naga Munchetty. Here are some of them:

·      Politics run the risk of destroying parts of the Retail Industry, caused by trade regulations and instable business conditions.

·      The current regulations imposed by Trump, is most destructive from the American consumers’ point-of-view.

·      DR Kalish did not see the next financial crisis coming from China, but was more worried about the US sanctions on Iran. This as it has an immediate effect on the global Oil Industry, and that all those money are being transferred in US Dollar and through the American Banking system.

·      DR Kalish got the question of “where he would launch a new retailer today, given all his macro insights?” His rapid answer is epic and music for a passionate marketer’s ears. “In the area where I live, and which I know best”. 

Comment by Magnus Brehmer, / www.thesephiagroup.com

“All businesses are built around Marketing. Marketing is NOT the equivalent of advertising and PR. Not even communications in its widest sense. Marketing starts with the intimate understanding of the intended customers’ needs and dreams. It feeds and leads innovation and product development, design and performance. 

It defines the optimised pricing strategy considering affordability, volumes, market penetration, margins, profitability and prestige. It answers the requested distribution preferences, and hence creates the prerequisites for logistics. It provides the brief for necessary services and staff recruitment, training and retention. Finally, it also includes the important dimension of communication. But not even Philip Kotler’s first version of the Marketing Mix, suggested Marketing to only include the communication part of it!

Yet, most companies around the world mistreat Marketing to equalise advertising and PR.  Yet, most companies stubbornly insist of naming their Communication and Media Budget as their â€œMarketing Budget”. Yet, most companies organise themselves in such a way that the true definition of Marketing (Intimate understanding of consumers needs and dreams), isn’t present                                            across all functions in the company. That’s when it goes wrong. Which industry and/or companies/brands are going to be the next Kodak-case? Not the ones that truly understand and cater for their customers’ needs and dreams for sure. Those who really understand what Marketing is.

     Magnus Brehmer / THE SEPHIA GROUP

·      DR Kalish suggests that Retailers might need to go back 100 years in history and provide what’s once created this industry; An exciting and worth while visit to their stores and offers.

·      He also suggests that communication and empathy might be the least disrupted areas, short term, by Artificial Intelligence (AI).

·      DR Kalish is among the first persons on stage to even mention “Global Warming” as an issue for the retail industry. (This might be a more worrying issue from a truly Strategic Macro Analysis point of view for the entire Retail Industry, than most people and players seem to understand? I shall get back to this later in this report, where I high-light the true consequences of the global shipping industry, and commenting on the French Documentary “Freightened” from year 2016. Magnus Brehmer).

1.6               Looking back to see the Future & Lots of more input

Presentation by:               Marc Rosen, Executive Vice President & President of                                                                                  

Direct-to-Consumer, Levi’s

Input from:                      Sinéad Burke, Writer

                                         Neela Montgomery, CEO Crate & Barrel

·      Marc Rosen makes an important point about the power of history for a strong and well-established Brand. Levi’s has 165 years of learning and experiences to lean on, while they are testing and developing their future strategies and innovate new products.

·      He also underlines the fact that Levi’s is built on a true and hands-on consumer insight that they got when they were selling pants to the miners during the American Gold Rush in the beginning. Note: Levi’s product was created based upon a specific need and feedback from the consumer. Creating durable and more functional pants for hard working miners, was their way of securing “intimate understanding” of the consumers 165 years ago. Today they are demonstrating their understanding, by addressing a completely new customer, with completely new preferences and needs and dreams. Today it can be around integrating modern technology into their products, as mentioned earlier in this report, but also a lot about “personalization” and a new generation of consumers who uses clothes to express themselves and their uniqueness more than ever before.

·      Marc Rosen surprises us by showing a picture of the first ever personalized Levi’s jeans, and then asks the audience when we think they were produced? Someone guesses 20 years ago. The answer is 1879 (140 years ago)

·      To invent and launch various tools and channels where the customers can create their own classics, configure their own pants including design, choice of materials, colours but also using laser technique to “worn them” adequately, are already offered today. 165 years ago, Levi’s listened to their market’s specific needs, and created better and more durable pants for the miners. Today Levi’s is listening to a new generation of consumers, who on the contrary want help to “destroy” their pants in a cool way(!) :) In both cases the company demonstrates a black-belt in true Marketing.

In an interesting conversation moderated by Trevor Phillips, OBE, with Sinéad Burke, Writer, and Elaine Bowers, incoming Chief Customer and Commercial Officer at Coca Cola, we get to know more about the daily challenges that some customers have in their Retail Experiences, and how bad the Retail Industry is to cater for everything that does not fit existing business models and store operations.

Sinéad Burke, who is a dwarf, shares the frustrating reality of “go shopping” for her. Everything from being starred at, being confronted by small children who of course wonder what kind of strange person she might be, the children’s embarrassed parents and their inability of handling the situations, and adult people’s inability to address dwarfs as normal, adult people.

But then also more practical things. Stores are not generally catering for these people’s needs. It is impossible to take down clothes hangers in general, as they are too high. In the test-room or at the WC she can’t reach to the lock, so she would need to ask someone else to guard outside or to go in with her. No staff anywhere seem to know how to handle the situation, and go shopping becomes an awkward experience. 

How many Retailers even have an operating procedure to assist dwarfs (and disabled customers)? Wheel chair friendly toilets and access ramps are two things, but how do you enable and secure a pleasant shopping experience for those who need hands-on assistance to shop your products? Or are they going/needing to shop 100% on-line?

I think the Retail Industry have huge potential for improvements across these areas, and think it was a good and important topic to be highlighted by the WRC. 

Well done!                                                  

1.7               Generation Z takes the steering wheel

Input by:      James Rhee, Founder of FirePine Group, Chairman & CEO of Ashley Stewart

                    Neela Montgomery, CEO Crate & Barrel

Already last year 2018 in Madrid, the WRC spent quite some focus on the new generation of consumers, and among several speakers DR Barbara Kahn from Wharton Business School, University of Pennsylvania, shared several important observations and findings regarding the so called Generation Z (roughly born 1995-2010). Most retailers have noticed that we are facing a new breed of customers, with a new set of priorities and demands. As they become adults and move in to new markets, at the same time as older generations disappear, their proportion and influence on the industry becomes larger. This should not be underestimated.

I urge you to study last year’s BREHMER RETAIL REPORT from Madrid 2018 to read more about Generation Z.

But let’s not start by only treating them as consumers and customers – They are also our now and future employees. And that’s a tough cookie in itself.

·      Generation Z don’t want to join big companies or institutions, where nobody notice them and they can’t influence anything.

·      They want to take risks and make quick money, while retailers in general are managed by old people who don’t want to take any risks, which might jeopardize their pension.

·      Retail Industry is facing a huge challenge in terms of future work force, where the most talented people will choose other industries that don’t offer minimum wages, working weekends and late evenings.  And it will not only be for on-the-floor-staff. Future Management Talents usually know they are sought after, and might exclude Retail from the very beginning.

·      Another issue is that new, young start-up companies tend to raise money for nothing, despite not showing any profit, at the same time as old, well-established and big retailers can’t even raise money at all! Nobody seem to be willing to invest in old, traditional retailing? Which one is thought to be most successful in attracting new, young talents?

·      Generation Z thinks time is important and valuable. Reducing working hours might be a possible alternative, if not more money can be paid?

·      BUT, retailers must start paying living wages (not minimum wages) to employees, and that is just a fact. How much room is there in existing business models to allow this, and still keep on investing heavily in e-commerce, increased omni-channel communications, logistic solutions, free deliveries etc.?

·      Neela Montgomery points out that it is already impossible to recruit qualified staff in the US right now, since the Retail Industry is simply just not competitive.

·      To put it bluntly, if Generation Z won’t work within retail, and won’t shop at the current retail format, exactly how does the long-term strategy look like for the Retail Industry? (Magnus Brehmer).

1.8               From a Philosophical point-of-view

Presentation by:               Robert Rowland Smith, Philosopher

Just before lunch during the second day, I was about to skip a presentation by “some philosopher”, as I also had some client work in Sweden to attend to, and needed a space to write some feedback. I’m glad that I didn’t!

Robert Rowland Smith entered the stage with a few very interesting reflections. Leaving his presentations skills outside of it, he really pointed out one very important insight:

                      â€œIn a confusing world, companies are actually interested 

                        in philosophy for the first time in history”.

I find this statement both important and encouraging, as I have always promoted both time and tools for reflection and alternative perspectives. In a digital world where we inject agile working processes to reach faster results, and where people’s patience don’t even manage a 3 minute Youtube-video, I think this might be a future differentiating capacity in business life.

As Mr Rowland Smith also stresses, not at least considering the challenges now are arising between AI (Artificial Intelligence) and Human Beings (homo sapiens).

He also makes an attempt to compare the old Maslow’s Hierarchy of Needs-model, with the rapidly evolving retail model, which I’m not sure actually contributed that much? But, having said that, this should also be the freedom of a philosopher, and I can understand where he comes from in those thoughts. If I remember it correctly, (as I faced serious battery issues with my only 2-year-old Apple iPhone, AND with my Apple iPad Mini, I failed to take notes during the whole of his presentation), he made the following reflections:

Products offered by the retailers. They selected/curated a range of products at certain prices, which could be compared with the first level of Maslow’s model, the one with basic, physical needs (food/drink/sleep etc.). Then retailers provided and displayed those products at certain geographical/physical spaces, which could then be compared with Maslow’s step about “shelter”, “safety” and “security”. As a third step, the retail model added “services” and support of various kinds, to simplify and promote the sales of the products. This would then correspond to the level of “love” and “belonging” in the Maslow model. The fourth step in the retail model would be the concept of “Brands”, meeting the Maslow’s level of “Self esteem”. 

Following this logic, the fifth and top-level of the Maslow model, “Self-Actualization”, would then be met by the kind of “Personalization” that we see more and more retailers now entering. One where you don’t only “configure” your new car or your next journey, but even the design and look of your new jeans (see Marc Rosen’s speech here above). Experiences and Meaning is needed.                                                                                                       

Now, assuming that this is a workable theory, and that the entire retail model has evolved in close relationship with Good Old Abraham Harold Maslow, the American Psychologist, and his model of hierarchy of needs, it raises two reflections:

          A)                  It would be a good recognition of retailing and marketing, as taking

advantage of available sciences

          B)                  It makes one wonder how this will be affected in

                               a world of AI and Algorithm-driven, behavioural economics

Small note: Maslow was born 1st April 1908 (in Brooklyn, and died 8th June 1970 in Menlo Park). But his credibility, legacy and respect as a psychologist and scientist are normally non-questioned despite that little fact :)

Robert Rowland Smith concludes his reflections by observing that people are living in a time where we are craving ideas more than ever. He points out at that there are several signs in society to prove this. 

Look at the explosion of phenomena like TED Talks, Pod-Casts and also traditional universities and how they are opening up themselves for sharing of ideas and become more inviting between themselves, as well as towards media and society at large.

He finally elaborates around the “3 C’s”, connecting, creating and convening, but doesn’t manage to bring it home or to reveal anything really new. He also states that consumers today, do not want to be described as “consumers”. This I believe has always been the case? Perhaps there is a small difference in the way that we just dislike it but don’t care about it, where as a new generation of consumers are actively hating it, and are getting physically and mentally ill when confronted with it?

1.9               A Bright Future – Our World Universities

As mentioned already on the first page in this report, I decided to prioritize the presentations of the short-listed universities this year, to listen to their creative contributions for the World Retail Rewards. It was almost the highlight of the entire congress I must say, and if one ever feels low or depressed regarding the future, one should spend more time with brilliant young students. It is so up lifting and rewarding just hanging out with them.

The finalists this year were:

·      Fashion Institute of Technology, New York, USA

·      Fashion Retail Academy, London, United Kingdom

·      MGIMO University of Russia, Moscow, Russia

·      Institute of Textiles and Clothing, Hong Kong Polytechnic University

·      ESCP Europe, Turin, Italy

·      Avans University of Applied Sciences, the Netherlands

This year’s challenge for the university teams to take on, was to choose an iconic figure – or group if selecting a band - from that period of the 1960s and early 1970s and then apply all that they understand about their values and goals from that time, to create a new brand that will appeal to today’s Generation Z or Millennial consumers. (Acknowledging that the rebellious years in the 1960-70’s was a time where many new brands and innovations saw the light and took off, reaching the Baby-boomers (post war generation) in a strong way. So what would the equivalent products/brands be today, to reach the current young generation?). 

To judge and be on the jury, WRC had invited the mega icon and super model from the 60’s, Dame Twiggy Lawson, DBE

All six university teams were really good, and had developed great ideas and brands, trying to address a new generation of “rebels” and address their needs and dreams in 2019 and onwards.

First to present to us in Lab E, Future Retail Challenge, during the second day of the WRC, was the team from Hong Kong, which as it turned out during the World Retail Awards in the evening on the third day, also won the whole thing!

·      Institute of Textiles and Clothing, Hong Kong Polytechnic University

       Chosen ICON: Neil Armstrong

       Concept: “HALOOTREK”

Idea: Travel like Neil Armstrong. An App that takes care of everything you want upon arrival to a big city in the world. AR-glasses and joystick to be included. Gaming, travel info, interactive culture functions/museums, guides, restaurants and bars, and language translator etc.

Comment: Well worked through, good presentation, clear graphical concept. Charming team that truly believed in their idea, and presented it as if it already existed and was the market leader!

(Magnus Brehmer with the winning team from Hong Kong University)

·      Fashion Retail Academy, London, United Kingdom

       Chosen ICON: John Lennon

       Concept: “VELI”

Idea: Unisex Street wear, have your personalised suit made for you, based upon a few curated models, but with varieties of fabrics and patterns. A lot of co-ops with selected artists and photographers.

Comment: Inspiring, good presentation by four handsome young men in four individually designed and stylish suits, lots of “mood” and “motions” in their performance. They worked on appearing tough and confident,  even though their polite, charming manners were impossible to hide :)

·      Fashion Institute of Technology, New York, USA

       Chosen ICON: Beach Boys

       Concept: “Kokomo”

Idea: A somewhat un-precise Pop-up Store concept with containers, who would be converted to “Kokomo-paradise-island-stores”, which would be going on a tour by Truck, from Florida, via New York to California. It seemed to be a combination of Beach Boys exhibition and beach fashion store, but the commercial part of the concept was not really there.

Comment: The Brand Beach Boys immediately means happiness and joy, parties, dance and cocktails to mid-age and older generations, and hence    might have been a short-cut to our hearts? But now the task was to attract     Generation Z, which would probably work as well, since music is quite         universal. But for some reason it felt like the whole Kokomo-concept was      closer to the students’ female Professor, who attended as well, than to       themselves? Just the fact that they did not play any Beach Boys music during their presentation is a complete mystery? If they would have played for example “Fun, Fun, Fun”, “Wouldn’t it be nice”, “Surfing Safari” or for that matter “Kokomo” on loud volume, the entire congress would have gone crazy and uncontrollably happy! You could tell that they had put in a lot of effort and that they believed in their idea, but it was just not     strong enough.

·      Avans University of Applied Sciences, the Netherlands

                      Chosen ICON: Muhammad Ali

                      Concept: “Mo’s Place”

Idea: Very relevant and interesting idea, based upon the insight that most students and young people in bigger cities of the world live very small and during simple conditions. Often several people together in one flat, or in a student corridor or in best case in a tiny studio with very little space.  Based upon the legend Muhammad Ali’s unique attitude, power and determination, the idea is to rent a larger space just outside the expensive city centres, and then convert it into “Mo’s Place”. This is a place with 4-5 small kitchens, a common large dinning hall, a laundry room, several 4 – 6 showers and toilets, a small GYM, a lounge area and one meeting/conference room for perhaps 8-12 people. The idea is to sell membership to Mo’s Place, where students and young people who don’t have the space                    or atmosphere at home, to go cooking, socialising, working-out and do their laundry. If you need to set up a meeting, for business or private, you can book Mo’s Place. If you need a receiving address for your on-line shopping while you are away, you can use Mo’s Place.

Comment: This is a very good and exciting idea. One could easily see the first 5 Mo’s Place in cities like Amsterdam, Berlin, London, Paris and Barcelona. And if successful, then see it scaling up to the rest of Europe and worldwide, perhaps as a well-defined franchise concept?        Challenges are of course to find the right locations, cheap and low key, yet     accessible and to find a balance between attractiveness and low cost for the interior solutions. But the guys’ estimates and budgets were not totally unrealistic, and 1000 members spending 4 hours per week there in average, should be doable. Then there is always a question of what the      market is ready to pay for this service? And what’s included and what’s charged extra for? But if it can replace a student’s costs for GYM, laundry, and replace some restaurant visits, by home-cooking-events, there should be room for a win-win solution between Mo’s Place and the customers.

·      MGIMO University of Russia, Moscow, Russia

                      Chosen ICON: Jurij Gagarin

                      Concept: “InTube”

Idea: A super effectful, healthy, sustainable and convenient “food-shot” (“nutrition-shot”), developed together with space technology currently used for astronauts. InTube is only 100 ml liquid, possible to store in your jacket, handbag, car gloves compartment and even bring on an airplane. It is possible to grab and open with one hand, and consume in one go. It             contains the daily needs of nutrition, minerals and vitamins for an adult person, and contains ingredients making the body to absorb the energy and nutrition immediately. It should first be developed in 10 different tastes and recipes, but in a near future be possible to compose and order according to the customers individual preferences. It would be targeting        everyone that sometimes finds it difficult to manage to eat during stressful days, and serve as a good and healthy “emergency snack” whenever needed. Sustainable packaging is secured.

Comment: Inspiring, good presentation by a confident Russian team of students. They even had a mock-up of the unique packaging, and had been working with awarded chefs in order    to taste the various meals, and secure that they were not just eatable, but also tasted good. If successful and if large enough volumes can be produced, it should also be an interesting product for UN as humanitarian aid. Packaging should be developed in weekly and monthly consumption sizes, per person, couple or households. All to drive volume and speed up cash-flow from the beginning.

·      ESCP Europe, Turin, Italy

                      Chosen ICON: Vivienne Westwood

                      Concept: “Made in You”

Idea: Totally personalized clothes, based on comprehensive use of Big Data and individual meetings with “fashion psychologists”

Comment: Probably putting the finger on a possible future for the more exclusive segment of the fashion industry? There is only a question of time, before AI, Algorithms, VR and AR are fully utilised together with Smartphone Apps. Allowing thousands of collected data points from our lives, Google searches, playlists, credit card spending history etc. This             could then define, design, present, suggest and convince what’s best for us! In the same way,         digital solutions with video chats and interactive tools of various kinds, already mean that computerised interviews and coaching can take place.

2.0               AI – The most exciting and Scary Innovation Ever

Presentation by:               Hod Lipson, Professor of Engineering & Data Science, 

                                         Columbia University, New York, USA

Already last year there was a good focus on the rapid progress within AI, Artificial Intelligence, and in my WRC Report 2018 I was repeating the late Professor Stephen Hawking’s worries, that AI could potentially post a much more serious threat towards mankind than both climate change or nuclear wars.

In light of that, one could of course wish that the relationships between USA and China, and USA and Iran plus lots of other existing or potential conflicts, had looked a lot better and more stable.  One of the key challenges for the world and our politicians the coming 10 years, in addition to the climate crisis, would therefore be to fight the evil forces of the planet, and their future access to AI technology.

Professor Hod Lipson from Columbia University shared some of his reflections.

·      AI is already everywhere around us, even if we don’t know about it

·      He starts by sharing Marc Andreessen’s saying “Software is eating the world”, and his follow-up statement “AI is eating Software”

·      People don’t realise how complicated it is, and how fast the development goes. Until a couple of years ago, AI could not tell the difference between a dog and a cat!

·      Do you like to take a ride in a self-driving car that gets it right in 75-95% of the time?

·      Driverless cars will change everything in society

·      Machine Learning is what drives the development

·      We already use drones with high-resolution cameras to audit crops and look for deceases or insect attacks, and learn how to recognise them.

·      A free App will make better judgements than 1000 doctors, lawyers, analysts or any kind of specialist

·      AI is both amazing and horrible at the same time. Who knows what it might figure out?

·      AI can create fake objects, fake faces and fake humans that don’t even exist. It is already now impossible to separate them from the real original.

It is very likely that AI will allow a new generation of industrial robots, and new robots for several service industries, to take over many of the existing jobs in today’s world. A totally objective and unsentimental “worker” that never gets ill, never needs to be on maternity leave, doesn’t takes any bias decision based upon gender, religion, race, never asks for a pay raise, AT THE SAME TIME as “it” can gain the equivalent experience/knowledge of 100 000 specialists during the last 100 years, pre-programmed even before day 1 at work. 

A medical diagnose robot that could take an X-ray photo of your body, and in a few nano-seconds compare it with all the last 50 years’ similar cases around the world, process the information, make a risk-analysis of its validity and calculate the statistical margin for error, and give you an answer within 30 seconds. 

Not even PG Wodehouse’s and his invented, excellent butler “Jeeves” would be able to meet such an example of stiff upper-lip. 

This might be where the dimension of philosophy needs to be brought in rather sooner than later. How will such a society look like? Where will the natural room for human beings be in such a world? What will humans be doing, if they are not working? 

AI robots have shown that they can take own initiatives, and make own decisions already, which worries the scientists (not only Professor Hawkings). How long does it take before AI goes criminal? How will their short-cut to fortune and power look like?

Emotionally lost people are already looking for directions and guidance today, in a society where traditions, religions, and values are being challenged like never before. Reports tell us that younger generations have never been more psychologically stressed and depressed. Climate panic is spreading around the world (among those who can afford to be bothered). 

Again, the danger of using the technological perspective as a base instead of the human, consumer behaviour driven one, is very present. What if we already have created an entire generation of people, who all checked in at the very top of the Maslow’s hierarchy of needs, and now gradually realises that they never understood it completely? And what if “life” and “reality” can’t be simplified, can’t be reduced to a Post-it note in an “agile” workshop? What if “life”, “love” and “meaning” actually turn out to be rather complex and complicated?

Will AI be able to solve the issue with those hard-plastic packages for light-bulbs, that make us cut ourselves, destroy the product before we access it, ruin the interior and the better part of our household tool-kits? :)

2.1               The Amsterdam Scolding & A much BIGGER question

Presentation by:               Guy Singh-Watson, Farmer, Founder of Riverford, UK

“This new generation of, cash rich – time poor,  young people who can’t cook”

During Day 3 of the congress, and just before lunch, we all suddenly woke up when a frustrated, angry man started to mutter and rage around on the stage.  Now what, I asked myself and took a quick look at the agenda. Some British, ecological farmer, selling vegetable boxes across the UK? Should I stay or should I go?, (to quote Clash from 1981).

After a minute of confusion, when he first couldn’t find the remote control to shift presentation slides, and asked someone to get it for him, he stared contemptuously at us, and said something along the lines that we should be ashamed of ourselves, all of us, and that he had been there listening to us the day before, but found it so appalling that he had to leave after 2 hours! (Now I just had to stay of course, finally someone daring, outspoken person who did not follow the rules).

I was so surprised that I failed to take notes, but I see that I did insert 3 red hearts under his name, on my iPad Mini. Then I just had to focus on what this odd man had to say to us. Hence I have to pick all my following notes from my memory, so please bear with me if I have missed or misunderstood something.

Guy Singh-Watson turned out to be a very interesting man, with an unexpected background, a fascinating story and an impressive business case. But more than anything else, he turned out to be a value driven man with a firm belief and on a clear mission. To provide people with healthy, fresh and locally produced vegetables, produced and distributed in a sustainable way.

Having worked as a management consultant in New York for a while, he decided to move back to UK and the farm Riverford, and to start produce vegetables in harmony with the nature, in a pure organic way. He started some 30 years ago as one man and a wheelbarrow, delivering home-grown organic veg to friends, and took the business to a national veg box scheme, now delivering to around 50,000 customers a week.

True to his values, and with the best for Riverford and its customers for his eyes, he sold 74% of the company to his employees, at roughly 1/3 of its market value. To avoid external investors or big retail chains to interfere with its business, he felt this was the right thing to do. In his attack on the retail industry and big companies in general, he left no one outside the fire. 

·      Consumers:          

Unaware people with little or no interest in quality of food, always hunting for lowest price with no thoughts of its environmental impact. Eating too much meat and too little vegetables. Young generations given a box with superb vegetables, wouldn’t know what to do with them. Spoiled, fast food junkies, cash rich - time poor, destroying the planet.

·      Agriculture Industry:        

Horrible, non-trustworthy, incompetent people with hidden agendas and corrupted by the large companies within the chemical industry, which just want to boost profit ahead of anything else. Destroying the planet.

·      Retailers:              

Should be ashamed of themselves. Totally occupied by staring into their own bellybuttons. Always start from an inside-out perspective, how to solve their own issues, without asking how they can help solving their customers’ issues. Too greedy and short-term minded and are destroying the planet. “You should all go home and stop what you are doing, and do something meaningful instead”.

·      Politicians:           

Horrible, non-trustworthy, incompetent people with hidden agendas and no understanding/knowledge at all about the food industry, its impact on the environment, nor                                               the consequences of their various decisions an regulations. Destroying the planet.

It was (or should be) an important wake-up call for the whole Retail Industry. Everybody is aware of the macro challenges the world is facing, and the huge impact of the consumerism and mass-scale operations that Retail is a fundamental part of, but very few present any truly credible innovations and solutions to address those matters. We talk a lot about it, but.........

Guy Singh-Watson has a point in retailers (in general) being too narrow-minded and too short term in their business planning.  Economies of scale has always been important to Retailers, and sometimes/always/rarely/never (pick the one you find relevant) at the cost of quality, sustainability, margin, profit, distributions/deliveries, service, communication.

It’s never fun to be scolded, but I hope that all the delegates at WRC have the intellectual capacity and maturity to say THANK YOU to Guy Singh-Watson. Only YOU know how much of his criticism that should be relevant to yourself, perhaps none of it? The point though, being that the industry as such just urgently need to get our act together. There is no nicer way to say it. That’s a fact.

A much BIGGER question

In 2016 a French TV-documentary called “Freightened” got a lot of global attention, and even won a number of awards, before it was successfully lobbed out of the debate and quietened somehow?

The program was roughly one hour long, and described the full, bigger picture of the global shipping industry, and its daily impact on literally everything in our lives. Most of all how deadly it is for the climate and the world environment. But also how closely linked it is to our individual shopping behaviour, how crucial part it is of global pricing strategies, and consequently its fundamental link to the entire Retail Industry. 90% of everything sold around the world is transported by large ships.

Nobody wants to talk about it, but the likeliness that a number of global, regional, federal and local new regulations regarding the environmental foot print, that each product/category/industry/household are having, will be imposed on the world economy is 100% inevitable. 

We are only a few years from dramatic political regulations regarding this. It will likely be forbidden to live on the wrong side of a Mega City, in relation to where your work is located. It will happen and it is a question of few years rather than a decade away. The mass transportation of millions of people every morning is not sustainable, and electrical cars cannot solve it. Nor trains or drones. The idea of letting millions of people commuting 1 hour every morning and 1 hour every evening, only to shift places with each other depending on where they live and work, is going to be forbidden. As a proportion of the total impact on the environment, the everyday work commute for billions of people is massive, and much more serious than all airline traffic, as an example. 

There are several, perhaps tens of, world regulations that are likely to be imposed on the Retail Industry within the next coming 10 years, based upon the climate challenges. Those will have a fundamental impact across the entire chain 

from raw material supply, production, distribution, manufacturing, deliveries, consumption and re-cycling. Are those clearly identified? How are big retailers preparing and adjusting?

Play with a scenario where each retailer is given a CO2-quota in the near future, limiting their ability of both operations and growth. And play with a scenario where also its customers are given a CO2-quota, limiting their ability to both buy and use products, what would that mean for the total business?

I think many Big Retailers (executives) are afraid of being caught by the steering wheel on the next Kodak case. And there are many in line from my understanding. But this should also create great opportunities for anyone who dares to do something about it. 

2.2               Concluding Reflections

By: Magnus Brehmer, Partner at Sephia (thesephiagroup.com)

(Including input from for example):      Lord Stuart Rose, NED Majid al Futtaim, 

                                                              and Woolworths South Africa

  Christopher de Lapuente, CEO Sephora

        Marc Rutte, Prime Minister of NL

Just the fact that agendas nowadays are available in both English and Mandarin, carries some sort of message in the on-going economic shift I suppose.

As mentioned in my opening General Reflections, it is my belief that the WRC has never been more needed, or more important than right now. 

That’s why it is equally important that its ability to create added value for its delegates, remains a focus area for 2020 and in the future.

The stress and the fear that many Retailers are feeling right now are for real, and are understandable of course. But a whole industry can’t be allowed to get paralyzed, no matter how dramatic changes might be. Change always brings opportunities as well.

Here I would urge each leading retailer around the world, regardless of category or country of operations, to look up the definition of the term “Market Leader”.

To be the Market Leader usually comes with pleasant elements like highest market shares, highest sales, best T-O-M awareness, most stores, most employees and regular invitations to Universities and Conferences, access to politicians and to media interviews etc. But being a Market Leader also comes with a set of responsibilities and commitments that too often are neglected.

A true and well performing Market Leader is expected to:

·      Drive the market (Stand in the frontline and lead the market forward)

·      Invest heavily in marketing, including R&D

·      Set Bench Marks for others to follow and be inspired by

·      Use its power and position to influence society at large to the benefits of the market as a whole

·      Inspire and stimulate competitors and students by creating challenges and initiatives that grows the total market

·      Address Share-of-Wallet (SoW) and move the category upwards on the customers shopping-lists

In cases where the Market Leader is neglecting any or all of these six tasks and responsibilities, the total market is going to be shrinking and losing its foothold in favor of other/new categories.

The Yellow Pages, phone directories, were normally owned by very profitable companies, where the product’s actual function was as a marketing communication channel for small entrepreneurs, which typically couldn’t afford advertising. But for a few hundred dollars per year they could get a bolded headline or a picture of their logotype next to their name and number. Thousands of small, local companies, also in smaller cities, created a prosperous market. At the same time as all consumers used the phone directory as soon as they needed to call any company. 

Kodak and the camera film rolls is another example of an entire category that has disappeared.

Those companies failed to innovate and take advantage of the new technology, failed to understand the changed consumer behaviour, but more seriously, did not have the cleverness and creativity to expand their businesses! Despite being highly profitable Market Leaders with huge resources. Instead they handed over their businesses for free to Google and mobile cameras etc.

Now, compare these examples with the world market of Olive Oil!

Until a couple of decades ago, the available range of olive oil in most stores, consisted of 3-4 different products, available in 2 – 4 different sizes of packages/containers, occupying less than a meter shelf space in most stores. Then, a few Market Leaders in the world decided to expand and grow the market for Olive Oil. The world market is controlled by a handful of players, with Spain, Italy and Greece being the largest producing countries. 

Huge investments took place in various kinds of olive oil, natural and flavoured, vintage and virgin versions, stored on barrels like exclusive wine! Investments in Design of frosted glass bottles, cool retro-cans and containers of metal, co-operations with famous star-chefs and Mediterranean housewives, promotion and lobbying of the Mediterranean Kitchen (consuming loads of olive oil), and serious education of the consumers in frying with olive oil, eating bread with olive oil, various recipes and salad dressings with olive oil, Olive oil tastings etc. 

In just a few years time, the Olive Oil brands, both Market Leaders and loads of smaller players, had conquered 4 to 10 times as much shelf space in the stores around the world, and in 20 years time grown the total market with more than 130% in volume, and much more than so in value. (Total market volume worldwide is estimated to around 3 million tons by 2019, and to be worth USD 11 billion by 2022).   

Noticeable is also that this mega-effort took place without as much as a thought of any digital device, nor software at the time. Then they have of course utilised digital opportunities as times have developed, but they didn’t start with an App.

Why haven’t we seen more of these determined, bolded and creative “upgrades” from several other retail categories, where Market Leaders are taking their role seriously?  Why are so many established Retail Brands and categories, so slow on the ball? Where is the true eagerness to innovate and to lead the market?

I am convinced that we will se several skilled Retailers, stepping up facing the fire as well. And if market economy theories are allowed to work, those guys, companies and brands should be generously rewarded as well. It will happen!

But the list of Top-100 worldwide Brands in 2030, will look very different from now and the past 50 years. Will old, established brands like Coca Cola, Microsoft, Apple and McDonald’s still be there? Will newer, established and strong brands like Google, Facebook and Amazon still be there? Perhaps not? 

Given any basic macro-analysis, the proportion of Chinese and Indian brands will be much higher than today. Who will win the e-commerce war in domestic China? Alibaba, T-Mall, JD.COM or perhaps 3 yet none-existing brands?

(Lord Stuart Rose)

The Sephora CEO, Christopher de Lapuente stresses the need for constant innovation. He sees Influencing Marketing as one of the most important new tools in the Marketing Mix, but also points out that “Going Global” is not just about opening stores. If you claim to be a people company, you better accept that it takes both time and care, to recruit, train and retain the right people.

I think he is on to something here. Many companies today claim to be “value driven”, even if their suggested “values” tend to be more of business objectives than truly human values. Many companies also claim that “people is their most important asset”, even if they then speed up recruitments, compromise on introductions, never invest in any real training, and don’t even bother to run proper exit-interviews when the staff resign!

It seems to be more common with company Yoga and After Work (nothing wrong with these, unless it down-prioritises fundamental range, sales and brand training), than a proper staff development plan related to the core business?

The brilliant Swedish Super-chef and Entrepreneur, Pontus Frithiof, recently shared some of his 20 years’ experience from running multiple business units with lots of staff. One thing he does better today, compared with in the beginning, is to be more careful and patient when recruiting new staff, and especially new managers. “It’s better with an empty box in the worksheet, than the wrong name there”, is his conclusion (in line with the Sephora-boss’ thoughts).

Investing significantly in staff training, and guarding the brand furiously, have been two key elements in Sephora’s expansion and success, Mr de Lapuente summarises his talk.

The Prime Minister of the Netherlands, Marc Rutte took some time off his busy schedule and visited the WRC during the end of the second day. And unlike many prominent politicians in these kinds of situations, he did not just pass by, dropping some polite and encouraging nonsense statements! He surprised by being very initiated, very well prepared and rehearsed and arguably wiped the floor with several of the “ordinary” speakers, from a content and performance point of view. 

He had bothered to read up on the retail industry and its challenges, in the world as well as in Europe and in the Netherlands. He also had an own opinion and a very positive and pragmatic attitude towards the challenges. It felt that he was “on the team”, and determined to fight side by side with the retail industry. 

Very refreshing, and I hope there were more politicians who would dare to really “take part” in the reality of the business community in this way. Brilliant speech, good discussions afterwards and a positive spirit.

During the last day’s agenda, there was also a Fireside Chat with Lord Stuart Rose, who with his 49 years in the Retail Industry, of course has a certain authority on stage. What I liked with his talk was the total “non-denial” position he took on most of the challenges today. 

·      He did think that many retailers are just too bad at what they are doing

·      He did think that the Retail Industry’s inability of better addressing climate change and the future of this planet is a serious problem. He also pointed out that it was rather odd that it had to take a young “Danish”(?) girl to wake up the world and turn the light on the issue (Greta Thunberg as the Lord most certainly referred to, is actually Swedish).

·      He is absolutely sure that retail is NOT at all a lost race! BUT, he advises everyone to drive with both hands on the steering wheel, and both eyes on the road. “You can’t be half a sleep right now, and most certainly not drive if you are”.

WRC World Retail Congress, is a unique opportunity to network, share and learn from the best in the world.

Some of the conclusions from last year’s WRC are still as relevant of course. Now I would focus on the following 3 if I have to prioritise (in order of importance):

·       It is not e-commerce that is causing the current apocalypse in the Retail Industry.  There is a high risk that too many big players are actually addressing the wrong things right now.

·       â€Generation Z” (roughly born 1995-2010) differs from all previous generations both in their capacity as consumers and customers, and as today’s and tomorrow’s employees. Retail Industry is not prepared enough for this.

·       Most of the big digital players STILL have problems with profitability and getting the business modelsto work. 

Magnus Brehmer

Partner at The Sephia Group

thesephiagroup.com

hm.brehmer@gmail.com