Physical store needs to adjust revenue model
According to ABN AMRO’s Retail Sector Forecast for 2020/2021, retailers will have to reinvent themselves in the upcoming years. They will have to increase their online visibility. Overall, the forecasts for the Retail sector are positive, according to the bank.
ABN AMRO expects a sales growth of two percent in both 2020 and 2021. Last year, the turnover grew by 2.5 percent, this is the sixth year in a row. Since 2013, turnover has grown by more than fifteen percent. However, the growth decreased slightly last year compared to the previous year. This was partly due to the rise in the low VAT rate from six to nine percent. This measure mainly slowed down the growth of turnover for supermarkets (from 2.8 percent in 2018 to half a percent in 2019).
Despite the positive forecast for the retail sector, ABN AMRO highlights that the future looks less bright for individual retailers. Fashion and electronics stores in particular are under pressure due to the popularity of e-commerce. According to the bank, the total worth of consumer products sold online has grown with 270 percent since 2013. Website sales now account for 20 percent of the Dutch non-food turnover. This figure is 25 percent when we add foreign online shops to this number. ABN AMRO expects online sales to grow another fifteen percent in 2020 and 2021, partly due to the arrival of Amazon in the Netherlands.
"Retailers need to reinvent themselves and increase their online visibility. About 55 percent of consumers explore the possibilities online before making a purchase," says ABN’s Sector Economist for Retail and Leisure Paul Metzemakers. "An example for increasing online visibility is that retailers can form a community of similar-minded people and organize events." For instance, you could think of a 'cycling clothing store that serves as the location for a cup of coffee before a group ride'. "Customers also appreciate it when the staff is well-informed, knows the story behind products and can empathise with their needs. This - and an inspiring assortment and interior - enhances the customer experience and the chance of return visits".
Finally, the bank also advises retailers to consider the changing consumer spending patterns due to an ageing population. Retired people often spend a larger part of their income on household appliances, health, food and beverages and less on electronics, clothing and shoes.
Retailtrends.nl. (2020, 01 31). 'ABN Amro: 'Fysieke winkel moet verdienmodel aanpassen''. Opgehaald van https://retailtrends.nl/: https://retailtrends.nl/news/59311/abn-amro-fysieke-winkel-moet-verdien…
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