TECHNOLOGY IN RETAILING
THE FUTURE IS HERE
DIMITRIOS DIMAKAKOS
RESEARCH ANALYST
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INTERNET RETAILING
GROWTH TRENDS AND ANALYSIS
THE FUTURE OF PAYMENTS
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TECHNOLOGY IN RETAILING
Internet Retailing Blazes a Trail
2010/2011 – Retailing – Fastest Growing Channels by Market
Euromonitor International
 Retail sales in Japan and Western Europe, both facing rapidly ageing consumer bases, will remain
relatively flat, although non-store retailing, driven by internet retailing, will continue to be a source
of growth in these markets
 Internet retailing, however, is not necessarily the fastest growing channel in all markets. Broadband
penetration and low levels of credit card ownership have hindered growth of the internet retailing
channel in many emerging markets. In addition, new modern grocery formats such as
hypermarkets and discounters, introduced by major international grocery retailers, have kickstarted rapid growth in Latin America and Eastern Europe. Similarly, the value proposition of
variety stores is beginning to redefine mixed retailing within Russia and parts of the Middle East.
© Euromonitor International
INTERNET RETAILING
GROWTH TRENDS AND ANALYSIS
THE FUTURE OF PAYMENTS
TECHNOLOGY IN RETAILING
Free Wi-fi Enhances the Instore Experience
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Wi-Fi is a hotspot for 2012 and marketers should take advantage of that. Consumers will benefit from the offers
and the price war.
For many developed market consumers, PCs and laptops are beginning to take a backseat as most smartphone
owners use these convenient devices to surf the internet and watch TV anywhere from parliaments to buses.
Levels of internet access vary considerably across the countries reviewed: 86% of the UK population are internet
users, compared with just 6% of the Indian population.
The use of mobile phones to compare prices in-store and to read reviews was also found to be most prevalent
among Chinese respondents, of whom 39% compare prices in-store at least once per week and 43% read reviews.
© Euromonitor International
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TECHNOLOGY IN RETAILING
Older Consumers Are Still in the Game…
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63% of those aged 45 to 54 and are older executives understand
how to use smartphones and other technological devices. Ageing
workforces, thanks to improving health and longer life
expectancies, mean people are benefiting from full incomes for
longer. Today's 60 year-olds can expect to spend money for at least
another 20 years.
In Munich, Germany, the Frauencomputerschule, an expanding
enterprise for making computers accessible for women, has noted
that increasing numbers of older women are booking into their
courses.
Launched in June 2011 by a US-based individual, Hive Dock for the
iPhone 4 is designed to assist elderly people with visual
impediments to operate their smartphones.
Austrian entrepreneurs Albert and Eveline Fellner watched
Grandma struggling with her mobile phone and decided to expand
their company, which manufactured stationary telephones, into the
mobile market. The company now has a range of phones that are
desirable even to people taking part in triathlons as its easy enough
to use while running, and they look good in any handbag. The
principle is: one button, one function.
With the changing demographic in developed countries, R&E in the
technology sector will increasingly come up with more user-friendly
gadgets, better instructions and less complex processes in order to
access a market that does not depend on the vagaries of
employment and the financial market.
© Euromonitor International
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TECHNOLOGY IN RETAILING
Tablets Lead the Way Towards Digital Convergence
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Tablets are predicted to overtake laptops as the dominant form
factor in portable computers in volume terms by 2015.
Growth will be driven primarily by the growth in availability
and accessibility of data networks, the expansion of consumeroriented cloud computing services, and, especially, rapid price
erosion of hardware.
The devices are likely to be highly dependent on cloud services
for data storage and processing. Thus, the expansion of cloud
services will facilitate volume growth and price erosion by
decreasing the need for high performance internal components
in tablets.
Price erosion is likely to be the single biggest driving force in
the tablet market over the foreseeable future. The decline will
be particularly rapid in media tablets, for which significant
processing power and connectivity features beyond Wi-Fi will
not be a necessity.
The pace of price erosion is likely to peak in 2012-2013, as the
average unit price is expected to decline to US$319 from
US$497 in 2012. This decline will be accompanied by a rapid
acceleration in diffusion rates in developing markets.
© Euromonitor International
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TECHNOLOGY IN RETAILING
Economies are Setting the Rules : Winners and Losers
Middle East and
Africa
Middle East's reliance on tourists and expatriates and Africa's rising levels of disposable
North America
Despite fears of a double-dip recession, growth projections remain decent. The region
income sees the region pulling ahead in projected value growth terms.
remains a hotbed for technological launches and innovations, supported by a strong base
of tech adopters.
Latin America
Latin America's small sales base pushes value growth. However, low disposable income
levels limit sales increase, in actual terms.
Asia Pacific
Given the presence of the world's two most populous nations – China and India – the
region's key driver for value sales remains volume. China's rise as an economic
powerhouse is underlined, with value outperforming volume sales.
Eastern Europe
In the forecast period, Eastern Europe is expected to shake off the high inflationary
pressures, weak currencies and plummeting EU manufacturing demand plaguing the
region in 2009.
Western Europe
Weighed down by financial turmoil in Portugal, Italy, Ireland, Greece and Spain, Western
Europe is projected to continue to flounder over the forecast period.
Australasia
© Euromonitor International
Price erosion and continued frugality in Australasia are expected to limit value growth.
INTERNET RETAILING
GROWTH TRENDS AND ANALYSIS
THE FUTURE OF PAYMENTS
11
TECHNOLOGY IN RETAILING
Near Field Communications (NFC)
NFC and the Ecosystem
NFC technology can be used for a wide variety of applications, especially in high volume and low value transactions.
This includes the use of NFC;
Payment
Payment
 For mobile payments as a replacement for credit/prepaid
cards and to store credit/bank information.
Ticketing
 To purchase and add stored value to the tickets to access
transportation gates and gain event entry.
Sharing
Pairing
 To aid the transfer of documents and content across
electronic devices.
Ticketing
NFC
Ecosystem
Service initiation
 To activate a service on another device, which allows for data
transfer, to gain access to websites and discounts on smart
posters, amongst others.
Pairing
 To establish Bluetooth connection by bringing devices to
“NFC hotspots”, by configuring networks automatically
between a pair of Wi-Fi devices.
© Euromonitor International
Service
Initiation
Sharing
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TECHNOLOGY IN RETAILING
Mobile Phones as the Digital Wallet
Key consumer statistics
 Having identified the key parameters that must exist for NFC
mobile payments to successful take off, we now explore how and
why mobile phones can become the new digital wallet. This
implies that consumers can leave their homes with basically
nothing but just their mobile phones in hand.
 A quick review of the compelling statistics in Euromonitor’s
various researched industries, captured on the right, paints a
rosy picture for the growth and penetration of NFC mobile
payments.
 Specifically in the following slides, we will be exploring how
mobile phones are evolving to be the one most critical consumer
electronics item of ownership and where penetration of mobile
phone subscriptions in less developed pockets are robustly
gaining momentum, if not, already on par with developed
markets.
 Over the 5 year period of 2011-2015, smartphones will become
the top product choice for new purchases (as opposed to feature
phones) and increase its percentage contribution significantly
as a total of mobile phone sales globally.
© Euromonitor International
75%
of the world’s population will
possess mobile phone
subscriptions in 2012
28%
the world’s population will
have a credit card in 2012
1,502
million new mobile phones
sales in 2012
TECHNOLOGY IN RETAILING
Mobile Phones as the Digital Wallet
 Beyond mobile phone ownership, an online poll by Accenture shows that consumers in developing
markets such as India and China are more receptive to mobile payments than consumers in developed
markets, such as in Europe and the US.
Source: Accenture online poll of consumers indicating if they favour using mobile phones for most payments
© Euromonitor International
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TECHNOLOGY IN RETAILING
Markets Ready for NFC Mobile Payment 2012
Identifying potential NFC mobile payment markets
 The accompanying table pits the top 14 markets across the different success factors identified by
Euromonitor International as crucial to NFC mobile payment success and identifies countries that possess
three or more of the five variables. A higher score rating indicates higher success potential.
 The results clearly draw light to developing markets as possessing strong potential for NFC mobile payment
adoption, rather than the conventional belief that modern systems benefits largely from presence in
developed markets such as US and Western Europe.
Country
Smartphones
Brazil
China
Spain
US
France
Japan
Mexico
South Korea
UK
Canada
Germany
India
Italy
Philippines
© Euromonitor International
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Card
payment
transactions
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Chained
fast food
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Expenditure
on land
transport
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Store-based
retailing
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TECHNOLOGY IN RETAILING
Visual Stores
Tesco Plc, the third largest global retailer launched virtual shops in
subways in South Korea under the name of Home Plus in 2011.
 Reducing Costs
 Innovation and competitive differentiation.
 Time Saver (South Korea is in the top three of the world’s hardestworking countries)
 South Korea has more than 10 million smartphone users in a population
of less than 50 million.
Result
 The number of new registered online members rose by 76% and online sales
increased by 130%.
 Home Plus (Tesco) is No1 in online sales and improved its position in the
offline
Is the trend spreading?
2012
In a tube station in Portugal …
© Euromonitor International