New Delhi – 14 January 2015: The top 250[1] global retailers generated revenue of US$4.4 trillion in fiscal year 2013, each with an average size of more than US$17.4 billion, according to the 2015 Global Powers of Retailing, Embracing Innovation report from Deloitte Touche Tohmatsu Limited (DTTL), in conjunction with STORES Media. Revenue growth for the top 250 retailers, which began declining in 2011, continued to slow in fiscal year 2013. To address declining growth and disruptive changes impacting the sector, retailers globally are exploring innovative trends like travel, mobile and faster retailing.

“The sluggish global economy in 2014 left many consumers financially constrained and retail sales under pressure. Thus, the prosperity of the global retail sector in 2015 will very much depend on the economic stability of several of the largest economies.  China, the Eurozone as well as a few key emerging economies had a particularly tough 2014. Comparatively, the US and British economies continue to do well, with indicators pointing to the likelihood of strong growth in 2015 and possibly beyond,” said Dr. Ira Kalish, DTTL Chief Global Economist.

“The retail sector is going through a significant period of change.  The speed of innovation and the disruption being felt across the industry will continue, as the demands of customers continue to increase. To succeed in this environment, retailers will need to respond quickly to threats and opportunities ensuring they are quick to implement innovations of their own. This will require a connecting strategy, capabilities, and specific initiatives, guided by the insights provided by market data”, said Gaurav Gupta, Senior Director, Deloitte in India

Top retail trends in 2015

·      Travel retailing –International tourism is set to continue to rise above expectations despite continuing global geopolitical and economic challenges. The expanding middle classes of emerging markets are traveling to the world’s capitals and boosting retail sales.  For example, over half of France’s 16 billion Euros luxury industry depends on tourists[2]. In 2015, retailers are expected to increasingly cater to high-spending travelers, especially emerging market tourists to drive growth.

·      Mobile retailing – Mobile retailing is expected to continue to grow aggressively. Sixty-five percent of the global population will be using a mobile phone by 2015 and an estimated 83 percent of internetusage will be through handheld devices.[3]Retailers will need to respond by offering free in-store Wi-Fi and mobile-friendly retail websites optimized for different kinds of personal devices. Privacy and security will become increasingly important as trust, transparency and protecting customer information will be critical in retaining loyalty as mobile retailing becomes the norm.

·      Faster retailing - Speed continues to remain an important trend in retail. This includes: “fast fashion” (getting runway styles to the stores assoon as possible); limited-time-only products and flaash sales to driveurgency and immediate purchase; pop-up establishments to quickly get products and services to market and build buzz; and self-service check-out and kiosks to reduce or eliminate waiting.In 2015, retailing is forecast to get even faster to meet consumers’ desires. Millennials will be driving much of this as they are the largest generation, with a lot of spending power, and carry a lot of influence. They prefer fast response and immediate gratification, and retailers will cater to that.

·      Experience retailing - Retailing is no longer just about the product, but the experience. Retailers will continue to explore innovative ways to enhance the buying experience for their customers through social media campaigns, festivals, fashion shows and interactive displays.

·      Innovative retailing- The retail industry will continue to be disrupted by new technologies and innovative competition. More retailers are likely to adopt innovative practices, embrace technology and use it in creative ways.

Analysing the top 250, Deloitte’s report highlights that European retailers are, by far, the most globally active- especially those based in Germany and France. Revenues from foreign operations for these retailers exceed 40percent. In the Asia/Pacific region, retail revenues grew by a robust 9.7percent in 2013, fueled by Japanese retailers’ 10percent increase in sales.

While food and fast moving consumer goods continue to dominate the top 250 list of global retailers, high margin apparel and accessories sector was the fastest growing product group in 2013 with with 5.8percent composite revenue growth.

While e-retailers are growing rapidly only two companies found a spot for them in the top 250. They are Amazon and china’s JD.com. While Amazon continued to dominate the world of e-retailing majority (37 companies) of the 50 largest e-retailing companies are multi-channel retailers with bricks-and-motar stores as well as online and other non-store operations. However, this is down from 42 such companies in 2012. In Asia online marketplaces rather that e-retailers tend to serve as the primary e-commerce model.

Top 10 global retailers, fiscal 2013