Retailing in the Twenty‐first Century: Current and Future Trends

Citation

Shekhar Singh, A. (2011), "Retailing in the Twenty‐first Century: Current and Future Trends", Journal of Consumer Marketing, Vol. 28 No. 7, pp. 551-553. https://doi.org/10.1108/07363761111181563

Manfred Krafft and Murali Mantrala, have successfully brought together an impressive list of 48 authors who include industry experts and leading academic scholars from Europe, the USA, Australia, and India. The paragraphs that follow provide a brief, chapter‐by‐chapter synopsis of the book.

The 25 chapters in the book are divided into three Parts: (I) Introduction; (II) Global, Environmental and Market Trends; and (III) Trends in Retail Management.

PART I: Introduction

This consists of three chapters and focuses on the key success factors driving national and international success in retailing, including the role of the entrepreneur.

Chapter 1, co‐authored by Grewal, Krishnan, Levy, and Munger, present a framework that identifies the key drivers of success and introduces four segments of retailers: Innovative, Low‐Price, Big Middle and In Trouble retailers. In chapter 2, the story of the growth and transformation of METRO Group is described by Mierdorf, Mantrala, and Krafft. Chapter 3 deals with entrepreneurship in retailing, and authors Mantrala and Krafft describe entrepreneur Leopold Stiefel's journey towards making of Media Markt and Saturn.

PART II: Global, environmental, and market trends

Part II of this book consists of a total of eleven chapters: four chapters on Global Trends; four chapters on Environmental Trends; and three chapters on Market Trends.

Global trends

John Dawson describes the restructuring of European retailing and its characteristics in the chapter entitled Retail Trends in Europe. He convincingly reviews why these changes are taking place and the implications for retailers.

In the next chapter, Weitz and Whitfield identify three important consumer trends affecting retailers in the US:

1. 1.

   The size and importance of two age cohorts namely Baby Boomers and Generation Y.

2. 2.

   The growing ethnic diversity.

3. 3.

   The increasing customer sophistication.

The authors describe strategies to deal with these trends in different sector like food and non‐store retailing.

The third chapter on global trends by Roy Larke describes the rapid development of retailing in East Asia in recent years. How and why international firms are showing their presence felt in these countries is explored and discussed in detail.

A new chapter has been added in the second edition of the book due to the need for a detailed analysis of the Indian retail sector, and author Sinha and Kar have done fairly decent analysis of it. They provide insights into the variety of existing and new players in the field and the experimentation characterizing their choices of modern retail formats.

Environmental trends

In the first chapter on environmental trends, Kalyanam, Lal, and Wolfram provide an overview of the innovative technologies deployed in METRO Group's pilot “Future Store” in Rheinberg, Germany. The expected impact of these technologies and marketers' ability to integrate it into retail strategy has been described with the help of cases.

In next chapter, entitled “The Third Wave of Marketing Intelligence”, Burke identifies three waves of change:‐ diffusion of Universal Product Code barcode scanning, customer relationship management, and customer experience management that have transformed marketing research in retail settings over the past 25 years.

This section's third chapter, by Ravi, Raman, and Mantrala, focuses on applications of intelligent technologies in retail marketing for not only creating data warehouses but also for analyzing them to intelligently support decision making. This chapter describes the use of automated self checkout systems in retailing, which enable shoppers to scan, bag and pay for their purchases with very little or no help from store personnel, resulting in lower costs and greater flexibility for retailers as well as yielding shorter queues, a faster checkout process, more privacy, and greater customer control of purchasing.

Market trends

In the first chapter on market trends, Uncles talks about four forces driving the buyer‐centric revolution in the retailing:

1. 1.

   The rise of technology‐savvy customers.

2. 2.

   The spreading fad and fashion consciousness of retail customers.

3. 3.

   The growing importance of experimental shopping.

4. 4.

   Increasing consumer assertiveness. These forces seem to have an impact on both retailers as well as consumers.

The chapter titled “Future Trends of Multi‐channel Retailing” by Sonneck and Ott deals with the issue of complex retail environment shaped by the rise of new competing channels and multichannel shopping behavior.

The next chapter by Fox and Sethuraman describes the prevailing competition in retailing be it within or between format retailing. The authors organize their discussion around price, variety, assortment, and store location and show the trend of increasing between‐format competition.

PART III: Trends in retail management

Part III of this book consists of a total of eleven chapters: one chapter on people; two chapters on products; two chapters on pricing; two chapters on distribution; and four chapters under the heading of operations, promotion, and marketing communications.

People

This section begins with a chapter written by Merkel, Jackson and Pick describing the critical role of Human Resource Management (HRM) in the changing external and internal environment for international retailers dealing with diverse cultures.

Product

In this chapter, Broniarczyk and Hoyer question the conventional wisdom that larger assortment leads to a better shopping experience and show that having an optimal assortment facilitated by new technology rather than simply a large assortment is critical for retailers.

The following chapter deals with out‐of‐stocks (OOS), always an issue of concern for retailers because of its negative consequences. Verhoef and Sloot describe consumer reactions towards OOS situationa by reviewing findings from different empirical studies. The authors also discuss the impact of adoption of new technology like RFID technology and automated store ordering systems on OOS.

Pricing

Today's retailers face a renewed emphasis on pricing practices, and two chapters explore these issues. Bolton, Shankar and Montoya suggest a movement towards customized pricing by identifying and examining the impact of four major retailing trends, namely, retail consolidation, changing manufacturer practices, advances in technology, and the emergence of e‐tailing, on retailer pricing practices.

In next chapter by Simon, von der Gathen and Daus discusses the impact of price on profit and lack of proper attention to optimize the pricing. The huge potential for improvement in the area of pricing lies in the suggestion of a five‐step scheme for implementing improved pricing processes, beginning with the formulation of strategic guidelines and ending with how to establish a control and monitoring system for it.

Distribution (place)

In this chapter, Ahlert, Blut and Evanschitzky provide a detailed comparative analysis of retailing in G8 countries and show that each country has its own retail structure. But, within the existing retail structure of each country, there is scope for introduction of new and emergent retail formats by finding the proper balance between culture and creativity.

The next chapter by Weitz discusses the potential and limitations of electronic retailing. The kind of merchandise and services being sold through this channel and likely to be sold in the future and companies that are likely to lead are discussed by the author.

Operations, promotion, and marketing communications

This chapter by Huchzermeier and Iyer focuses on supply chain management issues associated with products frequently on promotion, emphasizing the need for an accurate forecast of the demand impact of such promotions. The authors provide insights into how manufacturer‐retailer collaboration can improve performance in this environment.

The following chapter by Gedenk, Neslin and Ailawadi talks about effectiveness of retail promotions by reviewing the instruments involved in it. The authors review the new technologies available, as well as the opportunities arising from them for more effective retail promotions in the future.

Reinartz discusses the strategic management of loyalty programs, which have become an extremely prevalent marketing tool. He provides a descriptive overview of different types and design characteristics of loyalty programs followed by specific possible roles of it in marketing.

In the last chapter of the book, Raman and Naik provides a detailed analysis of need of integrated marketing communications and it ability to solve the key challenges in the area of communications for retailers. The authors reveal how retailers should act differently as they seek to determine the communications budget amount and optimally allocate it to create synergies.

Overall, I believe that practitioners as well as academics will strongly benefit from this book and find it stimulating and thought‐provoking. Although it provides good insight about retailing, it has some shortcomings like: redundant articles focusing on similar issues, lack of discussion on issues like market selection and location analysis, contrasting it with developed and developing nations, organized and unorganized sector, goods and services, nonprofit retailing, and success versus failure of retail strategy. A selective reading would benefit anyone who hopes to succeed in tomorrow's retail environment.