Digitization in retail: positive impetus for sales
A recent survey of 4,000 retailers by Handel Schweiz shows that the vast majority are using digitization as an opportunity. The competence of employees in matters of digitization has increased. Only the toy trade still complains about a lack of know-how and skilled workers.
The umbrella organization for the retail industry asked the general public on social media how they rate the digitization of Swiss retail. Two-thirds of respondents think that the retail sector is doing well to very well in terms of digitization. In the current survey of 4,000 Swiss retail companies, the overwhelming majority of respondents confirm that digitization continues to change retail. This is also evident in terms of sales. Kaspar Engeli, Director of Handel Schweiz, explained at the media briefing: "Whereas in the comparative study of 2016, half of the respondents reported no effect at all of digitization on sales, today the figure is just under 11%. 31.4% of retail companies recognize a positive effect of digitization on their sales."
For the first time, the toy trade was evaluated individually - for seasonal reasons, as the last months of the year are traditionally particularly strong in terms of sales due to the Christmas business. Here, digitization is having a positive impact on sales for just under half of the retailers. Only 7% of all retailers surveyed are still doing nothing in terms of digitization. As before, the majority are avoiding digital platforms, which are perceived as competitors. Here, the competitive situation has intensified, especially in the product range and logistics. Kaspar Engeli says: "Retail companies are faced with the decision to expand their own assortment or to become more specialized and at the same time increase the availability of the possibly broader assortment."
Global unit price: 24% of the dealers confirm the
When people talk about digitization, the topic of prices is not far away. That is why the retail companies were also asked for their assessment of the price development. The Director of Handel Schweiz explains: "Overall, 91% of the retailers surveyed find the price trend negative. Around a quarter expect the global unit price to prevail. Over 82.5% of retailers expect their prices to be higher than those of international competitors, while 10.5 % consider their prices to be lower in international comparison." Compare this to the opinion of the general population on social media: Just under half of respondents think Swiss retail is too expensive in some cases. 16% negate, 37% fully agree. Handel Schweiz also sees the price differences and once again calls for retailers to have a level playing field. Last but not least, the Cassis de Dijon must be implemented consistently in the interests of consumers, says Kaspar Engeli.
Trend toward the haptic in toys
Thus explained Rolf Burri, President of the Swiss Toy Association: "Toy retailers are seeing steady single-digit growth overall. At the same time, we are a very fast-moving industry with new trends all the time. Some products are extremely hyped for 6 to 8 weeks and then disappear from the market again. Within that short time, however, they are then omnipresent." He identifies great potential for digitization in the toy industry, as the survey also confirmed. "We assume that half of Swiss retailers are not yet fully exploiting their digital potential. For manufacturers, the challenge is also the declining number of specialist retailers. So other distribution channels have to be used." Online trade in toys in Switzerland is only 15%; in Germany and England, the online share is already up to 40%. The big challenge is logistics in specialty retail - here, digitization is a must so that processes run cost-efficiently. A retailer with several stores can manage this better.
The trend toward the haptic is confirmed by the fact that some well-known digital games are now available as haptic versions, such as Minecraft. The trend toward personalized products is also reflected in the growing range of personalized versions of games, puzzles and memories.
Digitization in retailing at the Loeb department store
Matin Stucki, Chief Digital Officer at the well-known Bernese department store Loeb AG, showed how stationary retail is tackling the issue of digitization. "The big opportunity lies in focusing on customer benefits and not on technology," he explained. Customers would still very much like to be surprised by the personal and the haptic experience. "The department store must create a feel-good atmosphere and increase dwell time." At Loeb, customers can watch TV, read the newspaper, sew, embroider, play retro PacMan games or with the Töggelkasten in the various customer lounges, and at the same time order food at their seats and pay for it there and then. Thanks to digitization, the department store chain can tailor the loyalty program for the approximately 80,000 Loeb cardholders more closely to personal purchasing behavior. Loeb has spent more than CHF 10 million on the recent renovation of its Bern department store. Among other things, 70 digital signage systems were installed at Loeb in Bern. Customer service can be contacted not only via chat on the website, but also via WhatsApp or Messenger. The Chief Digital Officer puts it in concrete terms: "We don't work with an automated chat bot, but with real advisors." Digital tools enhance the shopping experience at Loeb: customers have access to the suppliers' digitized catalogs via the extended counter or touch wall. In the changing rooms for women's underwear, there is a small screen that can be used to order a consultant. She receives a push message on her Apple Watch. The mobile tablet checkout stations are also a success, he said: Customer advisors can use them to check out their customers' purchases directly and discreetly via card. Self-scanning is currently limited to the food area, but will soon be tested in the stationery department, as Martin Stucki revealed.
Very personal digital
Daniel Broglie, CEO and member of the Board of Directors of the 200-strong Chromos Group headquartered in Dielsdorf, which also includes Fujifilm Switzerland, showed how diversely wholesale companies can be structured today and how smooth the transition from wholesaler to system house is. At the media conference, Daniel Broglie showed that digitalization is changing products in particular, which in turn is having an impact on consulting. He explained, "We are constantly developing together with the customers and in this sense also see ourselves as a trend scout." Across divisions, Chromos is facing very similar challenges: for example, the number of trade channels is generally decreasing, and international competition and speed are increasing. The CEO of the Chromos Group: "Basically, the current transformation is about a good transition from the digital to the physical. Digitalization makes things more personal in our markets. I understand digitalization as mass production with batch size one - a good example is the photo book or 3D printing." Daniel Broglie showed how digitalization promotes innovation in products, which not only places great demands on consulting and retail, but also opens up new business areas for retailers. In packaging, for example, labels that visualize a dynamic best-before date are possible, which reduces foodwaste. Multichannel options in printing and packaging enable app-controlled games on the packaging or the identification of counterfeits. Personalized packaging with individualized wrapping paper is also in vogue. In medicine, digital X-ray systems enable three-dimensional models that can be used to prepare for surgery. This can be linked to 3D printing, which can be used, for example, in training operations on children's hearts. Chromos not only offers a range of different 3D printers, but also comprehensive advice on all aspects of 3D or additive manufacturing. External access to machines via screens at Chromos allows digital printing machines to be repaired from a distance. High-performance cameras for use in production monitoring reduce inefficiency and waste.
On the sunny side
Despite the challenges mentioned, the trade sector, embedded in the overall economic context, is on the sunny side, as Jean-Marc Probst, President of Trade Switzerland, sums up. The "shadow areas" are of a political nature: Probst mentioned, for example, the framework agreement with the EU, which must be signed without fail, or current popular initiatives such as the "Corporate Responsibility Initiative", which must be fought. The president of the association sees the liberal basic order and the strengthening of the self-responsibility of companies, which Handel Schweiz advocates, endangered by such initiatives.
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