ERRT shares its members’ collective ideas with the objective to better enable retailers to give Europe’s consumers better access to the benefits of the Single Market, and to promote the delivery of a more sustainable consumption model.
To achieve this, ERRT contributes to public policy debate that impacts its members and Europe’s consumers, promoting policy choices that create opportunities both in the Single Market and in the global economy.
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Leading retailers in: |
Total Retail Turnover in 2014 in billions of Euro (10000,000,000) Source: GfK study on key retail indicators, 2015 |
Estimate Internet retailing sales by country (World Internet retailing sales €571 billion) |
Key findings
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Retailers and wholesalers innovate differently. Their activities are not reflected adequately in the traditional and conventional measures of innovation. Everyday innovation provides variety in product, price, format, channel and experience. The best businesses innovate to deliver the right mix of products at the right price to customers and must constantly strive to better meet the final consumers’ evolving needs. Retailers and wholesalers are more likely to engage in open, collaborative innovation than many other sectors and will place as much emphasis on non-technological as technological innovation, and also combine both service and product innovation. The lack of privacy available in a highly competitive public market, such as retail and wholesale, means that firms often prefer to innovate incrementally or start small, before rapidly scaling up hitherto unseen innovative activities. Many larger retailers and wholesalers have developed authoritative and highly successful private label brands in collaboration with suppliers. Private labels increasingly offer consumers easier choices around niche requirements, such as ethically sourced ingredients, special dietary requirements, lifestyle choices, cross-cutting ranging propositions such as baby products. Barriers to the successful exploitation of innovation in Europe include inter alia a lack of visibility and awareness from both policymakers and retailers’ perspective, costs and business risks associated with radical innovation projects, skills, and a number of regulatory constraints. |
Successful retailers put the customer at the centre of everything
Everyone is a consumer. And as a consumer, everyone chooses to shop at the retailers that best serve his or her needs at that particular moment. Consumers can easily choose one retailer over another. Retailers compete vigorously with each other to attract customers into their stores.
This requires retailers to put consumers at the centre of everything they do. Today’s leading retailers all began as small companies, created by entrepreneurs. The secret of their success lies in an intense customer focus.
The internet is changing retail
A clear trend towards online shopping is visible across Europe. Retailers with store networks are a major part of this trend. Multichannel strategies now combine the advantages of online shopping with the advantages of shopping in stores. In doing so, they provide innovative new services to consumers.
For “bricks and mortar” retailers, online shopping presents a major opportunity. To seize this opportunity, retailers are innovating new business models and processes.
Retailers innovate constantly to keep a competitive edge
Fierce competition drives retailers to bring novelties to the market. Retailers are not only key players in bringing innovative products to consumers, but they also generate new ideas and often work with suppliers to develop their own innovative products and services, sold under their own brand.
Retailers run major business operations
Each store is a major logistical operation in itself. Store space is limited; each retailer seeks to optimize the use of the available space. Even small stores can sell many thousands of different products, all of which should be available on the shelves at all times. Each store is part of a network of many other stores. Store numbers vary between the types of retailers and it is not uncommon for a retailer to have several thousand stores in its network. Industrial-scale distribution centres collect merchandise from hundreds or thousands of suppliers and dispatch it to the stores according to their needs. Sophisticated IT systems are needed to manage this process, and retailers use large fleets of delivery vehicles.
Retailers depend on their suppliers
Retailers are part of a value chain that involves different actors. Each retailer has hundreds, if not thousands, of suppliers. Retailers tend to look for long-term cooperative relationships with their suppliers. Stable supplier relationships make it easier to work together to provide innovative goods and services for consumers.
However, the desire to bring customers the most innovative offers also means that uncompetitive products need to be taken off the shelf in order to make way for new ones.
Retailers are drivers of sustainable consumption and production
Retailers play an important role in promoting the spread of sustainable practices throughout the economy and society. They make their own operations more sustainable by adopting sustainable technologies – for example, placing photovoltaic cells on store rooftops, using energy-saving lighting and refrigeration technologies, and improving load rates of their vehicle fleet. Retailers also help to make it easy for consumers to make sustainable choices by working with suppliers to develop more affordable sustainable products. By promoting sustainable products, retailers also raise consumer awareness about sustainability and the practical contributions every single shopper can make.
Retailers are major employers offering a wide variety of career opportunities
The retail sector is the biggest employer in Europe, providing jobs to 18.5 million Europeans (that is 9% of all jobs in Europe). Most retail employees are full-time employees; around one-quarter are part-time employees. Part-time retail jobs are particularly popular with women and young people, for instance because of their flexibility. Around 20% of all of Europe’s employed young people work in the retail sector. Retail offers significant opportunities for career progression even to those without academic degrees. Talented employees can get management responsibility early on in their careers and progress quickly inside a retail company. Many retailers support this by offering vocational training opportunities to their employees.
