Could your biggest challenge today be how you think about tomorrow?
Retail is about to enter the most turbulent time in history. We will likely see more changes in the next 10 years than we have seen in the past decades. All segments of retail and all countries are not necessarily affected in the same way. What does the future of Nordic retail look like?
In this report we focus on a particular and important area of the future – how data and digitalization are shaping the future of retail and consumer product companies. Development is fast and disruption is around the corner.
- Executive Summary
This is the second edition of EY’s Future of Nordic Retail report. In 2017, we launched the first edition, which focused on the overall development, starting out with broad trends in society among consumers, retailers and the shopping process.
In this edition, we focus on how data and digitalization are shaping the future of Nordic retail. We focus on understanding the leading markets and industry players, with advanced examples from the US and China, what they are doing and the tools they use. We seek to highlight what could be expected to impact the retailers in the Nordics based on what is happening already in the US and China. We also present a future road map for Nordic retailers and thoughts on how to handle the future.
Data for this report from the top professionals among the leading retailers and consumer product companies and other industry professionals in the Nordic countries has been gathered in three steps: (1) through individual in-depth interviews, (2) future retail survey and (3) two workshops, one in Oslo and one in Stockholm.
81% of the respondents in the survey of this study say that data is the most important driver of the future of retail. On the other hand, only 5% believe that most people in the management team know what Tencent is and what they are doing. A lack of understanding of companies such as Tencent is a clear indication that most of us need to learn more about what is transforming retail and consumer product companies today.
We can have an approach of staying with the business that works, or try to balance the new and the old, or go full-on into the new paradigm. Whichever option we choose, we need to gain more knowledge and continually learn where to be and what to do. Changes are happening much faster than expected and Nordic retailers need to be better prepared for them, today. We need to learn more from the front runners.
Based on our study results, we propose the following four areas for you to consider, today, when preparing yourself for the future:
1. Store transformation: The role of the physical stores will change, but how? Experts surveyed in this study have a number of predictions. The common denominator is that few of them believe status quo will be successful.
2. Ecosystem partnering: The new market is a world with powerful platforms and ecosystems. How to compete, cooperate and navigate in this new world will be more important. Looking at the old competitors will not give enough guidance for the future.
3. Key performance indicator (KPI) alignment: KPIs need to acknowledge the new paradigm and not the old. Our survey indicates that current KPIs are good only for short-term and not long-term performance. Can the industry maintain this and stay relevant?
4. Culture shift: Culture remains perhaps the biggest challenge. Our survey reveals a clear message: even average performers will change their focus and employees will work a lot more with data. Among top performers — even more so.
We do not believe that those who change first or the most, will be the winners. We do believe, however, that the average performance of those who change more will be better than those who change less.
Understand the future consumer now to shape your business for tomorrow – go to ey.com/futureconsumernow
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The Future of Nordic Retail
Listen what Henrik Kronborg Iversen, Nordic Consumer Products & Retail Leader, some EY experts and clients think about the future of Nordic retail.
Highlights from the Future of Nordic Retail 2018 report
Some key findings
Three ways of addressing the future
In our study we encountered three perspectives on how to be successful in retail and consumer products environment in the future. These could be seen as rather general attitudes and behaviors.
For more insights, download our report.
The game changer tools
When looking into the future of retail, few would doubt that large companies such as Apple, Alphabet, Amazon, Facebook, Alibaba and Tencent will be increasingly important. Understanding the future marketplace means looking at the technology in the forefront and, perhaps even more so, looking at the markets and organizations in the frontline.
To read more about all these areas, download our report.
The future road map
In our survey, we asked questions about what and when data will change in retail in the next decade. It is based on educated guesses and should, therefore, be handled with caution - and seen as an inspiration but something to be seriously considered.
• Next three years: predictive is here for those born digital
• Next five years: mobile connects to intelligent stores
• Next eight years: the era of dynamic personalization
• Next 12 years: biometrics and AR are real
• Very distant future (or never): the catchup with the giants
Read more from our study.
How to handle the future
Based on our study results, we propose the following four areas for you to consider today when preparing yourself for the future.
• Know your market to stay relevant
• Change the culture
• Align your KPIs
For more information about these four areas, download the report.
The Future of Nordic Retail | 1st edition
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Nordic E-commerce study
Mystery shopping experience in the Nordics
Understand the future consumer now to shape your business for tomorrow