Tag Archives: report

Where are Retail’s Hottest Emerging Markets?

Wondering whether to open your new fashion store in China or in Brazil but you don’t have any clue? The annual A.T. Kerney’s Retail Index  provides you with a detailed list of the most emerging countries for apparel retail.

The A.T. Kearney Global Retail Development Index (GRDI)™ ranks the top 30 emerging countries for retail development and identifies windows of opportunity for global retailers to invest in developing markets. The GRDI is unique because it doesn’t just identify which markets are bigger or richer, but rather which markets are hotter and bursting with opportunity. The full annual report can be read at this link, but let’s take a quick look at what the report shows.

 

China ranks as the most attractive emerging market for apparel retailers according to a study by global management consulting firm A.T. Kearney. Its first place ranking was driven by the country’s large population and the growing disposable income of the middle class. With its compound annual growth rate of more than 20 percent in recent years, apparel retail in China has grown at a rapid pace, and this trend is expected to continue for the next five years.

China was followed in the ranking by two Middle East Countries, U.A.E. and Kuwait, then by Russia and Saudi Arabia.

The United Arab Emirates holds the second position in the 2011 Apparel Index, driven by a population with a high disposable income and immense fashion consciousness. The expatriate populace and tourism in particular are driving forces of consumption in this market. Additionally, the UAE is a regional commerce center in the Middle East, and is a preferred market for entering the Middle East as well as testing new products and retail formats.

Kuwait is ranked #3 in the Apparel Index. Key factors driving retail growth in Kuwait are a favorable long-term economic outlook, a sophisticated consumer base with high levels of disposable income and fashion awareness, more women entering the workforce, and a significant expansion in retail real estate. The gross leasable retail space in Kuwait has expanded from 345,000 square meters in 2006 to 1.15 million square meters in 2010.

The remaining top ten markets in the 2011 A.T. Kearney Retail Apparel Index are Russia, Saudi Arabia, India, Brazil, Turkey, Vietnam and Chile. (Source: A.T.Kerney)

Low-carbon products: when there will be a mass mass-market demand for them?

As stated in the last CBI report about UK consumers and low-carbon products, three quarters of the UK’s greenhouse gas emissions either directly or indirectly attributable to consumer actions. Companies are taking action to drive up standards and setting up pilot initiatives for green products. Energy efficiency and carbon labels and descriptions currently adorn many of our shopping shelves, increasing transparency. But many consumers do remain skeptical about sustainability being a MUST for our future.

The report shows that there is no trade-off between sustainability and profitability but, as we are always stressing in our ECOFFEE communication projects,”(Many business leaders acknowledge that) it is not sufficient to operate in a sustainable way – they also have a responsibility to inform consumers about green choices”. Business cannot boost demand for low-carbon products without the appropriate communication. Let’s take for instance Procter & Gamble’s successful Turn to 30 campaign with Ariel linked the financial benefits to consumers of washing at lower temperatures with the positive environmental impact. This campaign successfully create a link between a product, a consumer personal behaviour and the resulting more sustainable impact on environment.
Once a company has created a demand for its green products, gains arrive very fast.

Philips’ success in energy efficient lighting is an excellent example: the strategic decision to develop the energy efficient lighting side of its business led to successful positioning
at the forefront of innovation.

Retail plays a very important role in raising awareness among consumers and empower them to make greener choices. Tesco for example has worked to highlight the carbon
footprint of its products to help consumers understand the impact of their purchasing decisions. And it worked great.

Now the question is: why there is not such a mass-market demand for green products? It seems that there is a missing link between the consumer and the environmental impact of purchasing a green product versus a not-so green one. When asked about the top three or four factors shaping their choice of purchase, UK consumers top rated one is cost to buy, followed by quality and reliability and brand. The environmental impact is ranked 10 (8%). It seems that there is a disconnection between consumers and the environmental impact of their choices, especially when carbon emissions are concerned. Nearly half (48%) of survey respondents could see the link between low-carbon and helping to tackle climate change, whereas less than a third (30%) identified the link between climate change and energy efficiency.

Labelling plays an important role in raising consumers’ awareness and A-G labelling has been a particular success, being well recognised among those aged between 35-64 (76%) and those earning over £25,000 a year (83%). It is no coincidence that products where the energy efficiency story is most developed for consumers tend to be those where the A-G label is displayed, such as fridges.

To answer to the question “When there will be a mass-market demand for green products?”, it all relies on clear communication and on educating consumers about the impact of their shopping and daily habits on the environment.

Starbucks Launches 10th Global Responsibility Report

On April 18, 2011 Starbucks Coffee Company has announced the launch of its tenth annual Global Responsibility Report, which outlines fiscal 2010 performance in ethical sourcing, environmental stewardship and community involvement. The interactive report is now available online at www.starbuck.com/2010report

“Our ten years of reporting demonstrates not only commitment to global responsibility, but also to transparency in our business practices,” said Vivek Varma, Starbucks executive vice president of Public Affairs.

The report shows that Starbucks has made significant strides towards the bold goals it set in 2008. In particular, Starbucks exceeded its goals in the following areas:

  • Renewable Energy: Starbucks reached its goal to purchase renewable energy equivalent to half of the electricity used in its North American company-owned stores, by purchasing 58% in 2010; and has been named by the U.S. Environmental Protection Agency as the fourth-largest purchaser of renewable energy in the U.S. The company is raising its sights with a new goal to make 100% of the electricity used in global company-owned stores renewable energy equivalent by 2015.
  • Youth Action Grants: Starbucks exceeded its 2015 community goal to engage 50,000 young people in community activities by engaging more than 53,600 in 2010.

“Starbucks has made significant and meaningful improvements in key areas, and recognizes the need for greater innovation, customer engagement, and policy leadership,” said Ben Packard, Starbucks vice president of Global Responsibility. “We will continue to set new performance standards, reach our ambitious goals and sharpen our focus on areas of greatest impact in communities and the environment.”

In 2010 Starbucks demonstrated progress toward reaching its long term coffee purchasing goals, bringing the company closer to achieving its long-term goal of purchasing 100 percent responsibly grown and ethically traded coffee by 2015.

The company made advances in three key areas:

  • Coffee Purchasing: Increased purchases of coffee sourced under C.A.F.E. Practices from 81% to 84% in 2010.
  • Farmer Support: Provided $14.6 million to organizations that make loans to coffee farmers, nearing its goal of $20 million by 2015.
  • Forest Carbon Programs: Expanded pilots in coffee-growing communities in Chiapas, Mexico and Sumatra, Indonesia through Starbucks partnership with Conservation International to demonstrate how coffee farmers can adapt to and be a solution to addressing climate change while increasing their incomes.

Starbucks also made meaningful improvements in 2010 toward reaching its goals related to renewable energy purchases, recycling, water conservation, and green building. Starbucks is currently on track to reach goals in a number of key areas including:

  • Recyclable Cup Solution: Making progress to develop comprehensive recycling solutions for its paper and plastic cups by 2012 by testing recyclability of cups in a New York pilot.
  • Water Conservation: Reduced water consumption by 21.6% over 2008 levels, nearing the goal 25% reduction.
  • LEED® Certified Stores: Completed pilot phase for the U.S. Green Building Council’s LEED® Volume Certification pilot program. It is the company’s goal to build all new, company-owned stores to achieve LEED® certification beginning in December 2010.

Although much progress has been made, the company still faces challenges in progress against some goals, and is working to achieve them:

  • Community Service: Starbucks partners and customer around the world contributed more than 191,000 hours of community service in 2010. Although this is well short of the company’s 2015 goal of generating one million hours, Starbucks has put new structures in place to improve in 2011, and is dedicating April as a global month of community service in celebration of the company’s 40th anniversary.
  • Front-of-Store Recycling: Starbucks continues to support local market testing and implementation to accelerate future front-of-store recycling.
  • Reusable Cups: Although Starbucks served 6.4 million more beverages in reusable cups in 2010 than 2009, there is a need for considerable innovation and customer engagement to reach the 2015 goal of 25% of beverages made in reusable cups. Starbucks is working to increase awareness by offering a free cup of brewed coffee or tea at participating Starbucks in the U.S. and Canada to customers who bring in a reusable tumbler on Earth Day 2011.
  • Energy Conservation: Starbucks did not achieve its goal to reduce energy consumption by 25% in company-owned stores by 2010. The company is now planning to achieve this goal for 25% energy reduction in 2015. (Source: Businesswire)

The retail business in year 2015? Just ask Nielsen!

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Every now and then, I go back to the old the reports published by company leader in the market analysis and forecast, to see whether they did a good job – and it was worth buying thCPG Nielsen Reporte report – or it was just a "storytelling" exercise. When I read the Nielsen's report about the state of CPG (consumer packaged goods) industry in 2015 I just said: "Ok, I think there's something missing.." They wrote about mass supercenters and e-commerce experiencing the most dollar share gains through 2015. Drugstores, mass merchandisers and convenience stores will witness an increase in dollar sales, but will also experience share losses. Consumers will do their shopping via smartphones and digital and social marketing will be leading a company success and so on. But one thing was really missing, and this was sustainability. Wal-Mart is one of the leader in the retail business and they are taking big steps towards sustainability, do Nielsen think that they are wrong and by 2015 this issue will not be of much importance? Comments are welcomed! (Photo source: Flickr, Mazda6 (Tor)