dutch online retail in 2030€¦ · source: world payment report 2011; roland berger cagr +14%...

130528 TMA_Retail v2c (main pages sent) dvdd.pptx

Utrecht, 29 May 2013

Turnaround Management Association

Dutch Online Retail in 2030

2 130528 TMA_Retail v2c (main pages sent) dvdd.pptx

Introduction and objective

> Expected retail spending 2030

> Key drivers of online retail

> Expected online retail in 2030

> Implications

– Vacancy rates

– Who will win?

– What to do?

> Thesis for discussion

OBJECTIVES


Total retail spending is expected to grow to EUR 117 bn by 2030

Turnover by category [EUR bn]

Source: OECD; CBS; CPB; ING; ABN; Thuiswinkel.org; HBD; Roland Berger

15 1415

1718

35 3841

4650

88

13

2012

13

6

15

2020E

98

7 2

12 6

14

117

3 15

7

16

2025E

107

3

2015E

Fashion

Food

2030E

Other

CAGR 1.6%

88

6 2

10

89

13

Personal care

Media

Home & garden

6

6 2

11 5

Electronics

Demographic developments

II

Economic developments

I

CAGR (2012-2030)

2%

1%

1%

1%

2%

1%

2%


Increasing smartphone penetration is driving mobile purchases

+159%

2012-1

1.5

2011-2

0.9

2011-1

0.7

2010-2

0.6

Source: Blauw Research; Thuiswinkel.org; Roland Berger

Number of people in NL who made a purchase with a mobile device [m]

17%

9%

9%

12%

43%

Tickets

Fashion (clothing

and shoes)

10%

Music or downloads

Other

Books, newspapers

and magazines

57% 47% 39% 32% Smartphone penetration in NL [%]

WHAT DID THEY BUY?

Programs and apps for mobile devices


IMPACT

Apps and social media are becoming more and more sophisticated

QR CODE Number of "QR reader" users is growing, many new business models evolving

NFC1) & E-WALLET

New seamless payment methods growing – gatekeeper as fore-runner (e.g. Google, Facebook)

AUGMENTED REALITY

New shopping experience with virtual assistance technology

PATH INTELLIGENCE Retailers can check the movements of shoppers and adapt their shop & advertisements accordingly

Source: Roland Berger

VIRTUAL MIRROR APP Application that makes it possible to virtually try on clothing & jewelry while shopping online

OTHER INNOVATIONS

Fits.me: Online mechanic mannequin that adapts to the size of your body

1) NFC: Near Field Communication

S-COMMERCE

Revenues via social media commerce growing strongly


Developments in payment methods drive convenience and trust

Source: World Payment Report 2011; Roland Berger

CAGR +14%

2013E

30.3

27.6

2.7

2012E

25.4

23.4

2.0

2011

21.3

19.8

1.5

2010

18.0

16.8

1.2

Debit, credit and prepaid cards Alternative methods

INITIATIVES OF ESTABLISHED COMPANIES

NEW PLAYERS

PayPal is an online bank account, 230 million people worldwide used it in 2011

Paysafe is a prepaid card for online purchases

V.me is the mobile wallet by Visa: Once you have filled out all your details, you can pay with one click

GoogleWallet keeps your credit and debit card details so you can pay online by signing in

With Youlayaway you can reserve a product online and pay in installments; after the last installment the product is delivered

NUMBER OF E-PAYMENTS

With MasterPass you can scan barcodes, QR codes and NFC tags and buy items through a phone application


Innovations in logistics boost delivery options and thus convenience

Source: Blauw Research; Thuiswinkel.org; DHL; Blokker; Twinkle; Roland Berger

Developments in logistics

SEND BY EXPRESS

Same-day-delivery: Online purchases for affiliate webshops ordered before noon will be delivered the same evening by TNT Express

CLICK AND COLLECT IN STORE

Click & Collect system: Online purchases can be collected for free at 600 store locations

AH & Bol.com cooperate to offer bol.com customers pickup points in Albert Heijn shops

PROPRIETARY UNMANNED PICKUP POINTS

Mango will start experimenting with unmanned pickup points, anticipating the trend that more women work fulltime

Amazon.com can send orders to a locker; the customer can collect the parcel at any time with a code sent by email

THIRD-PARTY UNMANNED PICKUP POINTS

Kiala currently has 600 locations in the Netherlands where customers can pick up their order

DHL has over 700 express service points in the Netherlands

http://www.postnl.com/


Online will become the dominant channel in several retail categories

Source: CBS; ING; ABN; Thuiswinkel; HBD; Roland Berger analysis

Turnover by category per channel [%]

FASHION FOOD ELECTRONICS

MEDIA HOME & GARDEN PERSONAL CARE

99%85%

70%

2030

30%

2020

15%

2010

1%

98% 90%75%

2030

25%

2020

10%

2010

2%

95%70% 60%

5%

2020

30%

2010 2030

40%

73%40%

25%

2030

75%

2020

60%

2010

23%

78%55%

34%

2030

66%

2020

45%

2010

12%

98% 85%65%

2%

2030

35%

2020

15%

2010

Offline Online


The total value of online retail will grow to EUR 40 bn by 2030

Total Dutch retail revenue breakdown [EUR bn]

0

20

40

60

80

100

120

2030 2025 2020 2015 2012 2010

EUR ~40 bn

EUR ~75 bn

+ EUR 35-40 bn

- EUR 5-10 bn

Source: OECD; CBS; CPB; ING; ABN; Thuiswinkel.org; HBD; Roland Berger

Shrinking traditional brick & mortar playing field

(~65% of total sales in 2030)

Increasing importance of online

(~35% of total sales in 2030)

Online Offline


20

15

10

2030 2025 2020 2015 2010

Vacancy rates could increase up to 17% by 2030

Development in vacancy rate [% of total retail]

Source: CBS; CPB; ING; ABN Amro; Thuiswinkel.org; Locatus; HBD; Roland Berger

2012

30.1 30.8 31.6 32.4

> Base scenario assumes shop surface growth at historic growth rates

> Vacancy might eventually might be lower due to:

– Changing function of retail space, e.g. hospitality and residence functions

– New entrants in retail market, e.g. online players opening shops

> Both vacancy rate projections include mitigation actions by retailers:

– Capitalizing on online sales via multichannel strategies like pickup points

– Acceptance of lower profit ranges by retailers

– Acceptance of rent reduction before 2020 by property owners

COMMENTS

Assumed total shop surface [m2]

Changing functions

Base scenario


Vacancy rates differ substantially per region … also in the future

Population growth and vacancy rates of Dutch retail locations – Variation by province

VACANCY vs. POPULATION GROWTH 2012-2030 VACANCY RATE DIFFERENCES 2030

> Demographic drivers (urbanization and ageing)

cause lower population growth in peripheral regions

> Vacancy rates in peripheral regions follow

demographic trends

> Fast growing regions are less affected by vacancy Population growth 2012-2030 [%]

25 10

10

6

0

8

Groningen

Gelderland Friesland

Flevoland1)

Zeeland

Utrecht

Overijssel

Noord-Holland

5 0

Drenthe Zuid-Holland

Limburg

Noord-Brabant

-5

Randstad Periphery Other

1) Flevoland’s high population growth expectation has driven a large property boom. With the growth in property stagnation, vacancy rates are expected to decrease

Vacancy rate 2012 [%]

Increasing vacancy

Source: CBS; CPB; Locatus; HBD; Roland Berger


In general, larger players are better positioned than smaller ones

AT RISK

FUTURE PROOF

Scores of retail chains on online capabilities and shop footprint

Source: CPB; CBS; Company websites; Roland Berger

1 ONLINE CAPABILITIES Online shop experience

2 SHOP FOOTPRINT: Demographic outlook of service area of shops

Large clicks/bricks

Department stores

Small clicks/bricks

Large clicks/bricks

Small clicks/bricks


Bankruptcy rates rise – Free Record Shop is a recent example

Source: ABN Amro; Desk research

Bankruptcy evolution – Retail versus other industries [%]1) Selected bankruptcies in NL

Retail

Total all industries

1) "Faillissementsgraad": the ratio between the total number of companies and the total number of companies that file for bankruptcy


Theses for discussion

> All retailers need to have a multi-channel / mobile strategy

> Bricks and mortar stores need to develop an enhanced customer experience

> The role of social media is to generate awareness, not direct sales

dutch online retail in 2030€¦ · source: world payment report 2011; roland berger cagr +14%...

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