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konsumeraTREND REPORT 2010

THE SWEDISH TRADE FEDERATION

An industry to be reckoned with!SWEDISH RETAIL has had fantastic growth in recent years. Despite the downturn in the business cycle and global competition, the growth is continuing. By 2020 we estimate that retail will have sales at the in-credible level of SEK 713 billion per year, an increase of more than 30 percent as compared with today. That is great news, not only for retail as an industry, but for all of Sweden. Retail is an important driving force for growth and welfare. Today, retail sales account for around one-third of the total consumption in Sweden and a significant part is made up of the consumption of necessary items.

Even so, the importance of retail as a growth engine is often forgot-ten in debates, despite the fact that retail trade currently employs a half million people, and despite the fact that retail provides for millions of consumers’ needs and generates important added value for both individuals and society.

BUT WHAT EXPECTATIONS do customers have for retail? What are tomorrow’s success factors? And what will the retail industry of the future look like?

The trend report 2010 points out several of the most important trends that will affect developments within retail.

For example, we are seeing a stronger movement towards sustain-able growth. We are seeing shopping areas, which, to an increasing de-gree, are being developed into social meeting places. We are also seeing a selection that is becoming both broader and with more niches, where goods and services are being combined at an increasing extent. This is occurring at the same time that accessibility is increasing.

This development holds many challenges for Swedish retail sales – but also enormous opportunities for anyone who is able to identify the trend and act.

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CONTENTS

PREFACE.............................................................................. 2

INTRODUCTION: RETAIL CREATES INFINITE GROWTH......... 3–4

1. SUSTAINABLE DEVELOP- MENT.............................................................................. 5–12Eco-fair................................................................................. 6The second wave.......................................................... 8 Packaging ............................................................................. 9 Vision 2020....................................................................... 12

2. THE SHOPPING CENTRE........13–20Internet................................................................................ 14Hosting................................................................................. 16The shopping centre............................................. 18 Vision 2020...................................................................... 20

3. SELECTION............................................... 21–26Mix and give.................................................................... 22 Standardization/Specialization................ 23 The service boom................................................... 24Vision 2020...................................................................... 26

Dag KlackenbergManaging Director,

Svensk Handel

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RETAIL CREATES INFINITE

GROWTHThe map of Swedish retail sales is being re-drawn. New technology, new needs and new patterns of movement are quickly erasing old boundaries and creating new conditions for development and growth.

SWEDEN IS A small country – we make up ap-proximately 1.4 thousandth of the earth’s population – but we have fantastic possibilities to reach out both within the EU and the global market. The person who succeeds in bridging the boundaries and exceeding their own limitations has all the possibilities to be-come tomorrow’s winner. Regardless of whether you are active in major urban areas or carry out specialized retail sales in rural areas, retail’s greatest challenge is to keep up with the customer – and preferably stay a step ahead in regard to meeting customers’ needs and expectations.

And this is not just about keeping track of one trend at a time – but keeping track of many trends – all the time.

TOMORROW’S WINNERS must dare to swim against the stream sometimes. It can be tough to be the first – but the person who dares to take the first step also opens the door to the really major opportunities.

It is the fast who overtake the slower rather than the larger eating up the smaller.

During the last decade, new technology and the opportunities that have opened up with the Internet have created new customer behaviour. Just as Bill Gates predicted in the 1990s, the Internet was strongly overestimated for the first three years – and totally underestimated the following ten.

THERE ARE MANY indications that in 2020 we will look back and say the same thing about environ-mental and climate issues. These issues, no matter how we twist and turn them, will basically, and in principle, affect everything we do; how we act as customers, how we act as employees and businesses within retail, and how we structure our shopping areas.

By seeing and accepting the development towards more environmental and climate-smart solutions within all links in retail, there are enormous opportu-nities for creating positive change – and good business.

THE CUSTOMER......OF THE FUTURE… is “on” in all regards. On the way, online, in- formed and wants products his or her way.… is used to getting things at no cost. The free- wave is continuing – what products and services will customers be expecting to get for free in 2020?… wants to have a wide selection of inexpen- sive products with good quality, but is also looking for, to a larger extent, something that is unique and individual. Standardization goes hand in hand with uniqueness.

THE EMPLOYEES......OF THE FUTURE… work less with taking money at cash registers and more with customer contact and services as advisors, educators and developers.… have moved from being shop clerks to ap- preciated, elite salespeople.… are desirable in the labour market and are considered to be ambassadors for their companies even in their leisure time.

THE COMPANIES......OF THE FUTURE… are not just seeking new customers, but also new employees. The large number of retiring workers means that companies have competition for a workforce – both within and outside the country.… create a high-season 365 days a year and actively work to reach a wider and larger number of customer groups.… are on the cutting edge by delivering climate-smart retail solutions at physical shopping areas and via the Internet.

Trends that are creating the winners of the futureNew technology and new structures will mean that tomorrow’s customers will increasingly demand more, faster and preferably free of charge. For employees in retail this will mean that the occupational role

will change and that they will have to work harder to create shopping areas, which will become more and more like social meeting places.

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SUSTAINABLE DEVELOPMENTOPENS NEW DOORSThere is a green wave rolling through global retail. More people want to be able to buy responsibly and with a good green conscience. For retail, this means a conversion to more sustainable development, which means many challenges – but also new, exciting business opportunities.

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BEHIND THE GREEN WAVE in retail there are a number of contributing factors. An increased interest in the environment and climate, a growing com-mitment in fairness issues and a continued focus on health and wellbeing are factors that go hand in hand.

Customers are increasingly asking for goods that are produced in an environmentally-friendly and socially responsible way that have a clear “useful effect”.

To be able to offer goods that are both eco and reco is, in many contexts, an important competitive advan-tage – and everything indicates that thus far, we have only seen the beginning of this trend.

By accepting the development towards more sus-tainable growth, companies are showing that issues

such as the environment, fairness and health are being taken seriously. “Locally produced” can also have a new meaning as a result of the constantly ongoing globalization.

ANSWERS TO QUESTIONS about a product’s origin and history are becoming more important for a company’s credibility.

Where does the product come from? Who manu-factured it and under what conditions? Where does the material in recycled products come from? And what is the history behind the reused garment?

In the future, it is going to be valuable to be able to inform customers about where the material came from.

Is it recycled or newly produced? If it is recycled, how was it used before?

“The person who is an obstacle not only harms our planet but also our company’s reputation and future.”

Klas Eklund, Senior Economist, SEB.

ECO-FAIR CREATES BENEFITS

Lush sells handmade and non-animal tested cosmetics. The majority are also unpackaged.

At Whole Foods, eco and reco are combined. You can even learn how to cook ecological food directly in the shop.

Beyond Retro creates unique fashion from reused clothes.

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Technology and growth for the climate

Klas Eklund, Senior Economist at SEB and author of the book, Vårt klimat (Our Climate) (Norstedts 2009), believes that companies have a key role in the conversion to a more sustainable economy.

Global warming will affect everyone in different ways, but he says that this does not mean that we have to go back to a pre-industrial society in order to meet these challenges.

“Effective efforts to counteract the climate threat do not require that we lower our standards. It means that the material standard will rise a little slower, but in return, we will get a cleaner energy supply and a healthier life.”

Technological developments and growth are key words for continued positive development. New technology is needed in order for us to meet the climate challenges we are facing and growth is necessary if we are to maintain a good and high standard of living in society.

“The climate threat will force a jump forward in development, a wave of “creative understanding” where fossil fuels must be phased out and replaced with sustainable energy sources,” says Klas Eklund.

“In this process, those who are unable to adapt in time run the risk of being eliminated. That is the way it has always been in all major technology shifts throughout history, but this time the process will be even larger and more revolutionary. The

person who is an obstacle not only harms our planet but also our company’s reputation and future,” says Klas Eklund.

“Over the long-term, the large wave of climate and energy investments will create new, exciting business opportunities – for those who take the initiative and identify opportunities.

For example, Wal-Mart

has been incredibly good at letting environmental considerations go hand in hand with business con-siderations, which has benefited both the environ-ment and the company’s own economy.”

AN INCREASED AWARENESS of environmen-tal and equality issues and a conversion to a more sustainable economy will have an impact at every level; something that gives eco within the entire retail sector – from production, transports and packaging to selection and design of the actual shopping areas.

It is not sufficient just to offer goods and services that are competitive in regard to quality and price. The company’s competitiveness will increasingly be determined by soft factors such as the environment, climate, fairness and health.

Increased knowledge can reduce “food waste”

Thomas Angervall, unit manager at the environ-mental group SIK, sees major opportunities for reducing our impact on the environment and climate, not just through producing, packaging and transporting goods in a more environmentally-friendly and climate-smart way, but also by thro-wing away less. “Around 20 percent of all the food we buy ends up in the trash can. Just by reducing the amount of food that is thrown away by 10

Ecological down to the smallest detail. At Cajsa Warg in Stockholm, even the shopping carts are biodegradable.

Klas Eklund

The shop, Merci, in Paris asks the question: Is consumption just products?

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percent we can make a huge difference for the environment and climate,” says Thomas Angervall, unit manager of the environmental group at SIK, Swedish Institute for Food and Biotechnology.

SIK WORKS WITH carrying out life-cycle ana-lyses and calculating the climate impact of different goods, etc.

There is a lot of interest from the food industry, but so far, there are only a few of the large players within retail that are working more systematically with SIK.

“We are on the cutting-edge in this area interna-tionally and have competence that I believe retail will utilize to an increasing extent, especially in order to strengthen its own competitive power,” says Thomas Angervall.

A clear trend in the restaurant world is to uti-lize an increasing number of parts in the cutting of meat. In addition, dishes that require slow-cooking are becoming more popular.

“These are trends that will also have an impact in the consumer link, and here, retail can play an important role by presenting a good selection and by encouraging consumers to eat more environme-ntally-friendly and climate-smart food.”

THE SECOND WAVE STARTS Another clear trend is the “second wave,” where old products are reused, either as they are or in redesigned form, where the product is processed or refined, for example with new parts or details.

With second hand items and an ecological attitude one can attain a high level of fashion, often with small initiatives.

Everything that is unique and exclusive does not need to be new – it can be sufficient to just add several small details or to rework an old garment so it is adapt-ed to today’s customer. In that way, added value is created for the customer and the company – while at the same time also helping the environment.

What is old can become both new and exclusive. The worn-out chairs of yesterday become the designer chairs of tomorrow.

The second wave is growing fast and there is major interest in vintage garments with their own, unique history.

Did you know that… we throw away up to 40 percent of the fruit and vegetables that we buy? The corresponding figure for meat is between 10 and 15 percent.

Thomas Angervall

Did you know that…in 2009 there was a selection of goods on Blocket worth SEK 192 billion?

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THE SECOND WAVE has moved from the gym to shops. This means that charity organizations or vintage shops can be located next to the large fashion chain stores.

“Second hand has become respectable, and today, it is more of a lifestyle than a product category,” says Maria Sandow, industry representative for Svensk Handel STIL.

It is becoming more common that we mix old and new, cheap and expensive to create our own, unique clothing style where second hand is an important part of the mix.

“It is a trend that we think will last. Younger people are less prejudiced against second hand clo-thing and are actually fascinated by older garments and items, especially if there is a little history to them. Being able to tell about who has owned a certain item or how it was used earlier creates ad-ded value.”

The second wave within retail also creates space for other types of supplementary services.

“When older clothes are redesigned and re-sewn to adapt to the customers of today or tomorrow, it is a resource-efficient way to create added value for both customers and companies. At the same time, this triggers a demand for sustainability and more long-term thinking in the production chain. The designer and manufacturer not only have to take into consideration the lifetime, but also about how new goods will be designed so that the use of resources is optimized and so that the materials can be recycled and returned to nature without causing damage. In this way we will get many new, but much better products.”

PACKAGING INCREASINGLY IMPORTANTCustomers are getting increasingly engaged in ques-tions regarding how an item is manufactured, trans-ported and packaged. Is packaging even needed? If so, does it have to look the way it does? Are there other

environmentally-friendlier packaging alternatives?More and more shops are now offering alter-

natives to single-use shopping bags. In Europe we are also seeing more examples of different types of “smart” packaging where great pains have been taken to package goods in the most environmentally and climate-friendly way possible.

In London, shops such as Unpackaged have even gone so far as to completely stop selling pre-packaged goods. Everything is sold by weight and customers are encouraged to bring their own packaging.

“Unpackaged is a small shop that has gained a lot of attention by having a clear and consistent envi-ronmental philosophy,” says Lisa Burden at Svensk Handel.

The actual basic idea, selling by weight instead of pre-packaged, is far from unique, but the climate debate has meant that more people are asking for alternatives to disposable packaging even in industries where the packaging has been strongly related to the brands.

Did you know that… on average, we use 300 plastic bags per person annually for retail shopping?

Stadsmissionen gives new life to old clothes at Liljeholmens Torg with its own brand, New life.

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The shop, Unpackaged, in London sells ecological food by weight and encourages customers to bring in their own jars and packaging. The actions of this small store have created a great deal of attention that is being echoed in the rest of the retail sector.

A customer asks for more information about the product’s history. Maybe the washing label will be joined by a tag where the product’s origin and history is described.

An increasing number of shops are giving new lustre to old garments.

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is about using environmentally-friendly materials and designing the packaging so that transport and logistics is made easier.”

However, the most climate-smart packaging is non-existent packaging. New services on the Internet such as ITunes, Spotify and Voddler give you goods without plastic, paper or transport.

Sustainable shopping bagsThe department store, PUB in Stockholm, has an express environmental and climate strategy. In all new processes and decision-making channels, envi-ronmental, climate and fairness aspects will be taken into consideration.

“That is why it was obvious that when we desig-ned our new paper shopping bags that they would have to be as environmentally-friendly and climate-smart as possible,” says René Stephansen, depart-ment store manager at PUB.

The new PUB-bag, which is uniformly designed for the entire department store, is lavish and made from strong paper and can be reused 10–12 times. It is also manufactured in a proper way under control-led conditions.

“The bag is a display window for the entire department store and it is important that it signals what we stand for – high quality goods and sustai-nable thinking. The packaging of the future must be as well-thought-out as the actual goods and also reflect those values that the shop or department store stands for.”

Packaged and ready = sustainableTommy Nilsson, team leader for the Vocational Education program in packaging design at Broby Grafiska in Sunne, sees a growing interest in “green” packaging.

And it is not only producers and commerce that are putting on the pressure – it is mainly coming from the students.

“We are seeing an increasingly stronger commit-ment in environmental and climate issues among our students at the same time that it is becoming more obvious that those who manufacture and sell the goods are more often demanding environmen-tally and climate-friendly packaging.”

The major challenge is to get form and function to work together.

“By using recycled and recyclable materials and ensuring the most minimal usage of materials possible, a lot can be achieved. Then, of course it

Spotify and other web services for music and film are optimal from a packaging view-point – they require no packaging at all.

PUB in Stockholm is paving the way for more environmentally-friendly alternatives and offering uniform eco-bags for the entire department store.

René Stephansen

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THE CUSTOMER OF THE FUTURE…… wants to buy with a good and green conscience… wants to be eco-reco and be able to purchase goods with a high level of fashion… wants to shop in stores that not only care about the environment but also practice what they preach

THE EMPLOYEE OF THE FUTURE…… is engaged in environmental and climate issues and can guide customers towards a green selection… is personally engaged in both local and global eco-reco-projects… markets his or her company in a climate-smart way via social media

THE COMPANY OF THE FUTURE…… works with the environment, climate and fairness and health to create sustain- able growth and rewards those customers and employees who choose correctly… creates new flows by letting in the second wave of used goods… thinks about packaging and marketing from an environmental perspective

By the year 2020, the retail industry will have sales of SEK 713 billion – 30 percent more than today – and we will have strong sustainable growth. An increa-singly larger part of sales will be made up of sustaina-ble services and experiences.

Clothes are updated and redesigned directly in the shop and retail plays an important role in general education with pop-up education on-site. We are also finding super-effective mini-wind-power plants at local department stores.

PSR, Personal Social Responsibility, is an obvious choice just like CSR is today. Customers want, as do companies, to take social and environmental re-sponsibility.

The customer is at least as mobile as in 2010 and can, to a larger extent, choose modes of transporta-tion without needing to think about the environment. This is simply because cars are more climate-neutral and there is a wider public transportation network.

An increasing number of functions are carried out using mobile phones. By just pointing your phone at an item, you can get all the information you need about price, quality, origin and history. The mobile phone will become your own connection centre that communicates, finds, pays for and opens doors to both the physical and virtual world. But in 2020, the mobile phone is not the only thing that is online. All technical devices are.

VISION 2020

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THE SHOPPING CENTREAS A SOCIAL MEETING PLACEAt the same rate that selection and price competition increases, acting as a host will become a more important competitive factor. By offering a safe and welcoming environ-ment with good service and a well thought-out mix of goods and services, added value is created for both the customer and the company. The shopping centre will become more of a social meeting place, a place where we shop, meet, exercise and experience things together – or just relax for a moment.

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The Internet gives the customer the possibility to search, compare and shop. Via the web, a company can reach a broader market and sell more specialized goods. Through the Internet, small companies can engage in e-commerce and also have a highly-efficient display window for the market; a display window that is open 24-hours a day, 365 days a year.

IN THE FUTURE, different shops will interact between the web and physical sales.

Typical e-commerce companies will open physical shops and vice-versa.

“There is major potential in letting different arenas like physical sales, the Internet and mobile phones

interact with each other to expand selection and create added value for customers and companies. For the small, highly specialized company, this means that they can reach out to a much larger group of customers at the same time that larger e-commerce companies, through open shops, take a step closer to the customer,” says Linda Hedström at Svensk Handel.

“Today, there are already examples of shops that offer customers an overview of selection price and item information via a computer on-site in the shop, and everything indicates that this develop-ment will continue with the interaction of e-com-merce and physical sales.”

“Another example of how the Internet and phy-sical sales interact is the new virtual fitting room on the web. The sites are not yet technically per-fect, but provide a good hint of what services with future companies with operations on the Internet could look like.”

INTERNET – KEEPS THE DOORSOPEN

Did you know that…in 2009, e-commerce had sales of approx-imately SEK 22 billion in Sweden?

A good hosting concept with knowledgeable and committed employees is becoming a more important factor for success.

At Kfem in Vällingby you can try things on and blog at the same time.

Lödde centrum, one example that the ABC-city is on the way back.

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INCREASINGLY BETTER security solutions will also mean that it will be both easier and more secure to do business over the Internet. This will mean that more customers will feel secure with e-purchases. The Internet will therefore become a natural sales channel for more companies and industries, for example, to strengthen the operation in the physical shops.

New technical solutions will come rapidly and the rate of development will constantly increase. It is important that customer behaviour and technology use occurs at the same rate. If the technology is a suc-cess, those who are fast in developing their selection to adapt to what’s new will be rewarded.

TECHNOLOGICAL DEVELOPMENT is one of the key factors that drive development within the retail industry.

The next large technological jump will most likely be when the so-called RFID-tags become so inexpen-sive that they can be attached to all goods in a shop. When that happens, all information will be stored on a small chip that can communicate wirelessly with a price terminal and other technical applications. This will basically change the work tasks for many people who work in retail.

“Self-scanning is one step in that direction, but only after all items have RFID-labels can the cashier function be totally taken away,” says Bo Cederlöf, transaction manager at Svensk Handel.

“This will not only free-up resources for rationalisation but also for increasing the service and selection of services in the shops with a more service-oriented profile.”

One consequence of this development will be that the demands on employees will increase at the same time that work tasks become more varied and stimulating.

“In the future, retail employees will have to be multi-faceted and flexible, in part, in order to provide better service to customers, but also so that we, at the same rate as the increased industry shift, are able to manage more operations under the same roof.”

Today, Posten (The Swedish Post Office) is al-ready an integrated part of daily retail sales and right now, the pharmacies are going the same way.

“This development will continue so that other players within retail will also have a higher level of cooperation. This will mean that employees will have to switch between more work tasks and a significantly wider selection than today where the selection of goods, services, and experiences will be integrated.”

For some time now there has been much dis-cussion about the risk of a shortage in the labour market when people born in the 1940s retire. For the retail industry, increased competition for labour can be a challenge.

Nikeplus.com makes it possible for people throughout the world who jog to meet, both on the web and on jog-ging trails and in the shop.

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At Westfield in London, you can enjoy world-class shopping and relax in the excellent piano bar.

At Cevahir mall in Istanbul, you can take a break from shopping and see commercials, films or TV directly from your lounge chair.

“It is difficult to assess this effect today, but it is totally clear that we will be a more attractive employer if we can offer more diversified and service-oriented jobs.”

WORLD-CLASS HOSTINGHosting has long been an underestimated component for making the retail industry more competitive.

At a shopping centre with a well-planned hosting concept, the customer feels selected, visible, welcome, and taken care of.

In a time with tougher price competition and more similar selections, the hosting concept is becoming important for a shop’s possibility to stick out from the competition.

“It is the total experience that counts”

Boris Lennerhov, Managing Director at GeKås in Ullared, runs, together with almost 1,000 employ-ees, Sweden’s most successful shopping centre – in the middle of the Halland forest.

“Our recipe for success is spelled, long-term. For us, the most important thing is not to achieve the most profitability right now, but that we create a long-term relationship with our customers so that they will return, year after year.”

“Low prices are important, but the secret be-hind our success is that we, in every detail, work to exceed customers’ expectations.

We would rather have a one percent improve-ment on 100 things than a 100 percent improve-ment on one thing. It is the total experience that counts”

Good service and good hosting are other key concepts behind GeKås’ successes. Boris

Lennerhov mentions the camping at Ullared as an example. When Gekås took over the camping area almost ten years ago it was worn-out, unprofi-

Did you know that…GeKås in Ullared had 4.3 million visi-tors that shopped for a total of SEK 3.4 billion in 2009?

Boris Lennerhov

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table, and mainly a source of irritation.“Today, the camping area is Sweden’s most

booked holiday village. Last year we had 260,000 overnight stays and many of the guests who have travelled a long way stay longer because there is so much more to do in Ullared than just shop.”

“We put a lot of effort into finding energy-smart solutions in operations in order to create efficient flows that minimize negative climate impact.

This is nothing that pays off over the short-term, but our work with environmental and climate is-sues is incredibly significant, both for our credibility and for our profitability,” says Boris Lennerhov.

IN A MORE TRANSPARENT market, the custo-mer has at least as much information about prices and selection as employees. This means that the retail industry is faced with new challenges. For example, how does the individual shop owner compete with large, international, single-line retail chains?

Today, in certain shops, you already have the pos-sibility to utilize different price comparison sites to optimize your purchases. The challenge for the shop can then be to justify a somewhat higher price with other added value such as credibility, level of service and special knowledge.

IN A GOOD hosting concept, trying to exceed customers’ expectations is an essential factor. In that way, a visit to a shopping centre becomes so much more than just a shopping trip. By creating expe-riences associated with the actual visit, customers stay longer and have more time to make purchases.

“In essence, it is about the customer being given a good reception and getting good service,” says Lisa Burden at Svensk Handel. At the same time, expectations increase about what will be offered at the shopping centre in the form of services and experiences. More experiences per square metre give higher sales and create added value in the form of different activities.”

“This can be everything from experts who show you how to sharpen your kitchen knives to

someone showing children how to make compost or how to make their own sushi.

By creating a framework for the actual purchase, you create added value for the customer – and over the long-term, also for the shops. We will most certainly see an increased selection of services and training demonstrations in the shops. This will benefit all parties.”

OPENING HOURS IS an important component in a good hosting concept. The shops or shopping centre shall be open when customers have the most time. At the same time, a company can extend opening hours and seasons in order to get a more even customer flow.

“Ten years ago, who could have guessed that Christ-mas would be a high-season for Liseberg,” says Magnus Kroon at Svensk Handel. “But by daring to be innovative and extend the season and by creating a new framework for good, existing facilities, we can use our resources in a better way and simultane-ously create positive, sustainable growth.”

In the shopping centres of tomorrow, diversity, in the widest sense of the concept, will be an important com-petitive resource. By finding a balance and harmony between old and new, mature and young, large and

At www.bubbleroom.se you can shop and socialize with friends. Shopping areas are becoming more important social meeting places.

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small, exclusive and inexpensive, and small-scale and expansive, diversity will be created that includes more groups and opens the way for new customer relations.

THE SHOPPING CENTRE THE NEW PUBLICROOMShopping centres are important social meeting places where, in addition to shopping, we also socialize, exercise and relax. Here, customers are offered a wide selection of goods, services and experiences. We are seeing the same development on the web, where social arenas are increasingly integrated with shopping.

A DEVELOPING TREND in city planning right now is that the ABC-city – the city or city district that contains workplaces, housing and a central area – is having a renaissance.

At the same time that the large shopping centres are being developed and becoming larger and stronger, there is a clear parallel development where we are on our way back to the old city core; a city core where, in principle, everything is located in a limited geographic area.

For the ABC-city, accessibility is the fundamental feature. There, you are not competing with size and volume. Instead, advantages such as closeness and accessibility are utilized. Good public transportation, generous opening hours and a high level of service are important success factors for forming city centres in ABC-cities.

This is a development that is conditional on clear leadership from property owners and city planners as well as business owners within retail sales.

“Where there are people – retail will follow”

Charles Larsson, marketing manager at Steen & Ström, Scandinavia’s largest developer of shopping centres and shopping areas, sees a parallel trend in the development of new shopping areas.

“Large shopping centres and shopping areas are becoming larger and more complete at the same time that city centres and city district centres are increasingly being utilized because they are located in areas where there is a large flow of people.”

In the opinion of Charles Larsson, the con-nection to different traffic hub points will become more important at the same time that the shop-ping area themselves, regardless of whether they are shopping centres or a city centre, are becoming more of a social meeting place where shopping, social services and culture is woven together.

“There is a clear development wherein we are creating shopping areas that also become social meeting places, where a great deal of consideration is given to design and function and where, in ad-dition to traditional retail sales, there is also a wide selection of services and experiences.”

Charles Larsson believes that there is great potential for change in city centres.

“In part because there is still so much to be done, and also because, to a larger extent, politici-ans and decision-makers are realizing what retail actually means for development and growth.

This creates room for both shopping centres and city centres can be able to develop positively, side by side.”

“At the same time, external shopping areas will be more strongly integrated into the local society so that they will be more accessible and more involved in local society, for example, by being further integrated with different types of social services.”

On the Internet, shopping areas are becoming, to a larger extent, social meeting places. There, the customer can get an overview of both selection and prices and also share experiences and knowledge with other con-sumers – or directly with the person selling the goods or services.

konsumera • 19At Caviar och Feskarn in Uppsala, you can eat a fresh salad at the bar or buy a delicious shrimp sandwich as take-away. The restaurant and shop are integrated and have become both a meeting place and a place to shop.

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THE CUSTOMER OF THE FUTURE…… uses the web to quickly get an overview of selection, price and news… wants to combine shopping and social activities – both in the physical shop and on the web… values world-class hosting and sees everything and everyone as representatives for a destination, shop or product

THE EMPLOYEE OF THE FUTURE…… is knowledgeable, independent and service-oriented… is an ambassador for his or her company 24-hours a day and also keeps in con- tact with customers via the web… is the company’s “ear to the rail” and the extended arm of the marketing department

THE COMPANY OF THE FUTURE…… invests in creating shopping areas where there is already a flow of people… works to develop a hosting concept and create secure and welcoming environ- ments so that the customer gets a more positive total experience… sees the web as an important and natural contact place for their customers and employees

By 2020, the number of Swedes of working age has decreased by 100,000 people. There is competition for the labour force. The retail industry sweetens its offer in order to get the right employees and attracts people through attractive educational and training programs – more often carried out within the com-pany in the same way that the industry does today – and also with strong brands and exciting work tasks.

The employee is an active elite salesperson with broad competence and is strongly service-oriented. The salesperson is also the extended arm of the mar-keting department.

From meetings between salespeople and custo-mers, which is the starting point for all consumption, feedback is obtained immediately so that the right product or service is produced.

Shopping areas and tourist destinations are utilized 365 days a year. Through increased accessibility, the company reaches more customers. At the same time, the company can attract more long-term guests by offering free travel. The hosting concept is develop-ed so that more customer groups feel invited and welcome.

VISION 2020

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BROADER AND MORE SPECIALIZED

SELECTIONIn recent years, the customer has gotten a larger selection of goods and services to choose from – at the same time that the customer’s possibility to influence the selection has increased. Selection will continue to grow, while simultaneously, different types of specia-lized markets will also develop. Instead of totally new concepts, we will see more compa-nies cooperating to develop and strengthen existing concepts where goods and services are combined to an even greater extent. Important factors that will affect selection are the hunt for unique products and an increased focus on eco-reco.

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Developments have shifted in favour of customers in recent years.

With a growing selection, increased competition, stronger purchasing power and a better overview of the market thanks to the Internet, the customer’s position has been strengthened. The customer often knows more about prices and product characteristics than the salesperson, which places new challenges on the retail industry.

The customer is continuing to gain a more pro-minent position with great possibilities to influence selection, not only through his purchase choices, but also by making his voice heard in the variety of chan-nels that social media offers.

In addition, the customer can quickly change roles and become a salesperson at second hand markets and in that way contribute to affecting the selection.

At the same time, the distance between producer and customer is shrinking.

There are fewer intermediaries and the time span from manufacturing to sales is decreasing.

Today, customers are used to designing their own products. This can involve everything from designing and putting together their own bicycle and designing their own glasses to tailor-making their own stuffed animal.

WEB-BASED SERVICES such as Spotify and Voddler make it possible for the customer to put together their own “favourite goodies bag” with music or films. The service can even be free for people who are willing to pay with the time it takes to listen to the messages of the advertisers. If the customer does not want to listen to the advertisements, this is a supple-mental service.

In that way we have come one step closer towards

MIX AND GIVE EXAMPLE: Zara was the first com-pany in Sweden to offer short produc-tion series, which means that custo-mers have to make fast decisions during frequent visits to shops while simulta-neously, the com-pany must quickly adapt the selection to what customers want.

At the second-hand market at Porte De Clignancourt in Pa-ris you can find antiques, vintage and newly-produced items.

Retail must know about the customer – because the customer knows about retail.

Skydiving or shooting the rapids – give away an experience.

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After the New Year comes a new year. New holidays give more opportunities to celebrate.

tailor-making an offer that fits the individual customer.If 10–15 years ago anyone had said that music and

films would be accessible for free in a legal way, most people probably would have just shook their heads in disbelief. Today, the relevant question we have to ask ourselves is: what new business models can be open for more free services in the future?

WE CAN MIX and give, not only based on our own needs, but by striving for the unique and individual in what we choose to give away.

“We are taking more and more pains to hand select and tailor-make our gifts so that they actually fit the recipient. We not only give away things, but services – and we don’t just do this at Christ-mas and on birthdays,” says Meta Troell at Svensk Handel.

In the same way, gift cards are having a major upswing at the same rate that we can tailor-make them in regard to form and content.

“But it can also be due to the fact that we celebrate for totally different reasons – or that we celebrate occasions that previously have not been listed as holidays in the Swedish calendar.

New customer groups in retail are also creating new shopping patterns, and by being sensitive to, for example, traditions in other cultures we can introduce new, exciting gift-giving traditions,” says Meta Troell.

“We already see that the Persian New Year has had an impact on retail so that after the New Year, we actually have a new New Year. Here, there is major potential for development within the retail industry.”

STANDARDIZATION AND SPECIALIZATIONAT THE SAME TIME

The selection of cheap, mass-produced products will continue to increase. At the same time, the more

standardized selection with the major chain stores has given rise to an increasingly stronger parallel trend: specialization. The further specialization goes, the stronger the need will be among many people to find their own expression, their own style and their own identity.

IN A MORE standardized selection, through dif-ferent types of supplemental services or combinations, we can create something personal, something unique. This can involve complementing exclusive brand-name jeans with a totally new, but inexpensive top from one of the larger fashion chains.

But today we are also seeing how companies are of-fering redesigned goods where they create something individual and unique from a reused product.

By adding services and experiences, an individual, unique product is created and important added value is created for both the customer and the company.

Fredrik Hjelmquist runs Pause Ljud och Bild and has two shops in central Stockholm. In 2008, Pause was named Shop of the Year at the Retail Awards.

“We can never compete with the large chain sto-res in regard to price or extensive selection.

However, we can, in a totally different way than the major stores, create an experience associated with the purchase through tailor-made solutions for various customer groups.”

Fredrik Hjelmquist, who runs Pause Ljud och Bild and has two shops in central Stockholm, received the award, Shop of the Year, at the 2008 Retail Awards. In an industry where competition is extreme, Pause has found a niche in physical retail that probably only works for a small circle of customers in central Stockholm. Via the Internet, it is possible to create a display window directed towards an initiated customer group throughout the entire country.

“Customer experiences will also be central in the future, but social communities like Facebook will make it possible to also have in-depth dialogues

Did you know that… today there are two million Swedes between the ages of 55 and 75? Just as many Swedes have their background in other countries/other cultures.

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At Picadeli in Gothenburg, the customer pays first and then picks out his own salad. The personnel focus on providing good service.

Many customers go to the same places – but leave with unique selections in their shopping bags.

with more distant customers. On Facebook we can offer quick, personal service, keep customers up-dated on news and create a “we feeling” regarding the company and products.”

Fredrik Hjelmquist sees major opportunities to continue to grow even in a tough, highly specialized segment.

“Custom installation is growing very quickly and in five years our salespeople will be project managers who follow the customer home in order to create the optimal sound and video solution on-site. At the same time there is a clear trend with an industry shift where the sound and video industry is becoming more tightly interwoven with the computer industry.”

“Technology is moving in the direction where an increasing number of functions are collected in the same device – and that means that we, to a corresponding degree, have everything under one roof. There is a whole generation that has not yet discovered how good music can sound on extremely good speakers. That is the generation we want to reach.”

Customers also want a unique story related to the purchase. Storytelling, which is made possible via the web, is getting increased significance within marketing and is a development that we have probably only seen the beginning of.

THE SERVICE BOOM CREATES ADDED VALUE The selection of services, which is connected to products and offers in different ways are growing rapidly and are creating added value for both customers and companies. The government has given clear signs that services are on the way to becoming “accepted” through legislation that benefits the sales of household-related services.

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Everything indicates that we are entering a “service boom” that can create growth and job opportuni-ties.

The services themselves provide important ad-ded value for the customer, for example, through products being specially adapted according to individual needs.

But a development towards a more service-oriented business also means that over the long-term a positive spiral will arise, where more services generate increased demand for goods that can be used to carry out these services.

Phenomena such as ROT and RUT deductions, financial supervisory resources to stimulate the use of services, are having a strong impact on both growth and employment, and through that, are becoming a contributing engine for continued growth in business.

“In general, services will become an increasingly important employment factor in the future,” says Magnus Kroon at Svensk Handel. “By promoting more and broader household-related services, the government has seriously opened the door to the service sector.”

“For those who are prepared to pay to get help with cleaning, it is not a particularly big step to also let someone else take care of the daily food shopping. This means that the purchase of everyday items can finally be a success on the web since it will be a service that is deductible and therefore fully acceptable for the customer to pay for.”

By offering different types of services, the individual shopping place can also deepen customer relations.

Perhaps the customer can have the possibility to sign up for a course to learn how to use the latest band-saw or pasta machine while they are already in the shop – and maybe the course can even be held in the shop before opening time to get even more inte-rested people?

Customers can also pay extra to fix food on-site in the chef studio in the food shop. A professional chef

When will the customer get help in buying food for the evening meal – and is the service deductible? Middagsfrid.se makes everyday life simpler.

Teach your children to make sushi – a popular service at Whole Foods.

Fnitter.se rents the purse or bag you’ve dreamed of.

can help with everything from selecting raw materials to preparing them and presenting the food in an ap-petizing way.

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THE CUSTOMER OF THE FUTURE…… switches between being both the buyer and the seller in a market where the selection is becoming larger – and specialization stronger… does a large part of the buying himself – and tailor-makes his goods and services based on his own needs and desires… has no problem looking for bargains at a second hand market one day and purchasing expensive brand-name goods the next

THE EMPLOYEE OF THE FUTURE…… is an accommodating service supplier in the shop… is multi-faceted and can switch between different job tasks… has qualified job tasks – for example, by offering customers different types of supplemental services

THE COMPANY OF THE FUTURE…… transfers an increasingly larger amount of “routine work” to customers and allows personnel to work more with providing services… offers both standardization and specialization – at the same time… cooperates, to an increasing extent, with other players in the market in order to create an attractive selection of goods and services

In 2020, services and experiences constitute an increa-singly larger share of consumption. Services generate important added value for companies, employees and customers.

The interaction between physical sales and e-com-merce is an obvious success factor in order to reach out to a broader customer base with a more specia-lized selection of goods and services. In the physical shop, the customer will do more herself, while employ-ees will offer services connected to the selection.

The large clothing chains will start their own Pro-ject Runway, where they will search for new designers in association with customers. Thanks to the fashion

chains, the designers will achieve star status. Through computers, mobile phones or TV, customers will have fast access to the latest collections and can influence the selection by voting for their favourites. In that way, retail will have valuable input as early as the design stage.

We mix and give away and pick out the best from different worlds in shops and on the web. With an ever expanding media selection, the customer will, for ex-ample, pick the best from the selection and create his own, unique product.

Local, global, sports, culture, finance or technology – the combination possibilities are infinite.

VISION 2020

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“The most important thing is to dare to take a chance. It can be tough to be the first – but it can also mean that you are a real winner in ten years” Would you like to know more? Please contact any of us who have worked on this report; Lisa Burden, Linda Hedström, Magnus Kroon and Meta Troell. You can reach us via e-mail at: firstname.lastname@svenskhandel.se

Production: Lindberg Imagineering. Layout: Mini Reklambyrå. Illustrations: Anna Nilsson. Photography: Christiaan Dirksen, Whole Foods,Norstedts Förlag, SIK, Spotify, PUB, Broby Grafiska, GeKås, Bubbleroom.se, Middagsfrid.se, Fnitter.se, Jens Bergqvist (JensMedia), MarleneHassel, Irina Haugane and Svensk Handel. Printing: Åkessons tryckeri, Emmaboda (Environmentally certified).

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THE SWEDISH TRADE FEDERATIONRegeringsgatan 60

S-103 29 StockholmTel +46 10 47 18 500

info@svenskhandel.se