Russian retail elite highlights industry trends and challenges at the B2BCG annual consumer retail CEO briefing
Source:
TRCW
MOSCOW, Russia - A roaster of “Who is Who” in the Russian consumer retail industries gathered in March in Moscow to compare notes on the local economy and its impacts on their industry as well as exchange ideas and opinions on the situations on the domestic market vis-a-vis global retail hubs.
Organized by the B2B Conference Group, and aptly titled, Consumer Retail Annual CEO Briefing, the event brought together different retail market segments operators and leading market experts, who engaged in several brain-storming sessions in a discussion format the organizers called “Public Talk.”
This format enabled delegates and experts to exchange ideas and opinions in an open dialog, each raising key issues of concerns to his/her businesses and getting relevant consultations, recommendations or advice from colleagues and sector experts on how best to improve business procedures to attain stated objectives, the organizers said.
The industries covered ranged from IT and Internet, grocery, fitness and to auto industry. Indeed, all industries that are in one way or the other related to FMCG activities and other industries, which sell their products directly to end users/consumers. Among key topics tabled for brainstorming were Company and Staff: Inevitable Evolution in Management System; His Majesty Buyer: How to decide on where to buy and how to pay; The Large Data Problem: Technology of Consumer-Specific Offers; New Economy: The Laws Governing the Brands Survival in the Post-television Era and several others.
Among VIP guests that cracing the event were Andrei Milekhin, the CEO of ROMIR Monitoring, who presented a paper on the key market trends and customer behavioral trends and changes over the past 100 years in Russia. In his report, which traced the history of retail business in Russia, from 1913 to 2013, Milekhin noted that the evolution in per capita structural changes of the Russian economy and dynamics of annual consumption of grocery and industrial goods. "Today, however, further development of the retail market depends on further penetration of retail companies into smaller cities, establishment of partnerships among key sector players and development of low-priced retail outlets and services."
Olga Romashova, who oversees retail and distribution at the Russian office of Microsoft Corp., painted an “electronically driven retail future, where customers can program their lists of goods into their mobile gadgets. On reaching “the future retail outlets”, clients will only have to synchronize their list with the products on sale. Thereafter, they will be directed to the shelves where such products are located or be informed of their absence in case the products are out of stocks, she added.
Other experts included Jeffery Nicholson, the head of consultancy practice at the Moscow office of PwC, who presented the company’s 16th Annual Survey of CEOs of Top Global Corporations. According to the poll, Russian CEOs turned out to be the most optimistic in the post-crisis era, with almost 66% of respondents expecting increases in their companies’ profits over the next 12 months. This contrasted with the global average optimism rate of less than 36%.
Of particular interest to the colorful gathering were the other news and data relayed by Nicholson, who noted three key priorities among Russian CEO over the next 12 months, including readiness to boost operational efficiency (63% of respondents), production capacities (44%) and expansion of clients bases (41%).
Alexei Drobot, CEO of Russian Fitness Group, noted that the retail industry is becoming more clients-service driven and oriented due to the rising price pressure on the market. The best business strategy in such condition is for retail outlets to seek to provide clients with all services at one point, create comfortable conditions for shoppers in their facilities, he added.
Addressing the colorful gathering, Yevgeny Butman, a co-owner of Ideas4Retail, which runs a chain of shops in Russia, shared his observations of the current market trends and challenges as well as his vision of the Russian retail industry’s future. Today’s retail is till largely “segmented and fragmented,” with major city dwellers remaining the key trendsetters in retail market developments, he added. His other observations included the fast-increasing volume of investments going into the online retail segment, while mega-hypermarket formats will continue to increase, with at least 10 super-mega malls pipelined for delivery in the industry in 2013.
Butman also highlighted the “direct mathematical relationship” between the costs of real estate properties and retail businesses, from investments into shop developments, pushing the final products’ prices higher and higher to end consumers or buyers. “Real estate will continue to impact on the retail industry in such patterns as far as the current sky-high prices on real estate assets in Russia, especially in big cities, continue unabated,” he noted.
Andrei Novoselov, the managing director of the AvtoSpetsCenter Group, a Moscow-based auto dealership holding, addressed the key trends in the Russian cars retail business. With the local and global economies still very sluggish in recovery, competition among peers has reached a cutthroat level, thus posing increasing negative consequences for businesses across the sector.
"One of these is the decreasing profitability margins, forcing most auto dealers to seeking new, non-traditional means, in addition to their regular sales tactics, to attract more clients to their car salons," he explained. One of these trends is the development of the so-called “car dealership village concept.” Under this concept, gigantic auto dealership facilities are typically located in cities’ outskirts, where they provide clients with all types of auto dealership services in one place, he explained.
However, this task of attracting clients is not very easy as customers have become “more literate” in terms of cars; “more educated” in terms of major trends in the auto industry developments and extremely “more selective” in terms of what they want, how and when they want them vis-à-vis what is available in auto salons, he added.
Other high profile representatives of the local retail industry in attendance included Andrei Chechin (Ozon.ru), Violetta Gvozdovskaya (UnoDosTres), Vladimir Moshin (Familia) and several others, who also highlighted the different aspects of today’s Russian retail industry and what to expect in the future.
By Christopher Kenneth
Web design,