New demands from consumers have transformed big sector’s companies operating mode, in terms of closing acquisition or expand their brand portafolio.
Buying niche brands, merge with a rival, or entering on new markets with a huge money investment? Changes are the new normal consumption market. Sector’s trends are under transformation every year thanks to the introduction of new elements into the game board. Demands from new consumers have lead big sector’s companies to redefine themselves, according to the report The race for game changing transformation and strategic growth, made by Kpmg.
In the US, the brand portfolio optimization is due to be the main trend on retail’s corporative operations in 2019. Sector’s groups will invest in minor groups that complement their business model, with the aim of accelerating in innovation and growing their market fee. Besides, retail’s big operators are continuing to divest in non-core assets, as stated by Kpmg.
In 2018, retail’s operations in Europe decreased because of the consumer’s confidence and expectations drop. In contrast, the consultancy explains that the sector’s operations will grow this year, and that big companies are going to focus their activity in acquiring companies that generated value to the brand, instead of working on winning size.
Retail’s operations in Europe are focused onto winning value instead of size
In this sense, Barema Bocoum, partner of Kpmg in France, points that “retail transactions are expected to be continued in the following years, but retailers will need to adapt first to the new competitive environment that arise from digitalization”.
In Asia, on their behalf, companies’ growth through acquirements is one of the main trends experienced by the sector in 2019. Cosmetic and beauty are the segments in which the retailers will focus their operations, according to the report.
However, although the retail has a great growth potential in Asia, the report warns that the sector needs to focus on local challenges, as low professionalized companies or government regulation, first. For all that, Kpmg points the region retailers as one of the main actors of the change that is due to happen in the following years.
In parallel to retail trends in different markets, the report states that sector’s giants are accelerating into digitalization race. The industry is expanding its investment in technologies that transform the business level and increasing the distribution channels, as well as the logistics.
The industry is immersed in digitalization’s race
Thus, pure players are winning brand’s value, as highlighted in the document, because their experience with the technology makes them more attractive to traditional operators, which are open to carry out collaborations or invest capital on them.
These partnerships are part of the trends that will transform retail at global scale during 2019. “Big groups have to keep their minds open, especially through the collaboration with digital companies, because they have experience on how is the new relationship with the consumers and the impacts that the market has suffered”, explains Bocoum on the report.