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Topic - Retail trade

Retail Dialogue Platform

Introduction

Demographic change, new consumption patterns, technical innovations and digitisation – the structures of the retail trade are undergoing substantial change. In order to flag up new prospects in this structural change, to counteract a decline in inner-city areas and a lack of supply in rural areas, the Economic Affairs Ministry has set up the Retail Dialogue Platform.

Online trading has become a natural part of modern life – and it’s growing at double-digit rates. It is already having a measurable impact on retail centres. Turnover in fixed-site retail outlets is falling. Fixed-site retailers and municipalities are increasingly concerned. This will impact on the appearance of our towns and cities, and on the supply to the ageing population in rural areas.

Online trading growing rapidly

According to current predictions, fixed-site retail trade will account for only 78% of total retail sales by 2020. Increasing levels of multi-channel activities will merge the various channels and successively overcome the online-offline divide. Since online trading is growing, whilst the overall market is largely flat, the entire retail sector is currently experiencing predatory competition. According to surveys by the Institute for Trade Research (IFH), 38% of consumers say that increasing online shopping means that they no longer visit the town centres so much. And 27% of consumers travel less to the peripheral regions. This impacts on the number of retail outlets.

Four figures on the changing retail world

83
Symbolicon für Geldscheine

percent of sales
were generated at fixed-site outlets by the non-food retail sector in 2015

23,3
Symbolicon für Lastenwagen

percent of sales
in the non-food retail sector are forecast to be generated online in 2020

38
Symbolicon für Haus mit Tür

percent of consumers
say that online shopping means that they don’t visit town centres so often

14
Symbolicon für Tortendiagramm

percent of all workers
in Germany work in the retail sector

Aims of the Dialogue Platform

Creating new prospects and opportunities for the retail sector

Demographic change and digitisation are greatly changing the structures of the retail trade. In order to flag up new prospects and opportunities for the sector, the Economic Affairs Ministry has launched the Retail Dialogue Platform.

In 2015, the Federal Ministry for Economic Affairs and Energy responded to the challenges faced by the retail sector as a result of the profound changes taking place in this area by launching a Retail Trade Dialogue Platform. The objective behind this initiative was to pick up on the most important issues associated with this change, such as ensuring local supply for citizens, keeping city centres attractive, coping with digitisation and competition, and to look at its impact on professionals working in the sector. Ultimately, the platform seeks to open up new prospects for retailers and all others affected by these developments.

The focus is on a dialogue between the relevant stakeholders, i.e. companies and business associations, academia, the trade union, the Federal Government, the Länder and municipalities. How can the retailers, municipalities, Länder and the Federal Government respond to the far-reaching structural change? What are the challenges for the employees? These and other questions are to be discussed with the stakeholders in workshops, and ways forward are to be mapped out.

The aims of the Dialogue Platform are:

  • To raise awareness of the current developments and their potential repercussions
  • To analyse and develop recommendations for action for all stakeholders regarding structural change in the retail sector and its effects
  • To produce strategies for lively town centres and local outlets in rural areas, and to find responses to digitisation

An advisory board to support the Dialogue Platform

The project was supported by an advisory board (in German) (PDF, 724KB) consisting of 24 members from retail associations, the trade unions, companies, academia, the Association of German Chambers of Industry and Commerce, the Länder and the top municipal associations. The advisory board was chaired by Dr Sabine Hepperle, Director-General responsible for SME policy at the Economic Affairs Ministry. The co-chairs were Stefan Genth, director of the Handelsverband Deutschland (HDE - Germany Trade Association), and Stefanie Nutzenberger, member of the federal executive of the Verdi trade union.

Computer chip and gas fiber, symbolic of digitisation; Source: Getty Images / Rafe Swan

© Getty Images / Rafe Swan

Working and Findings

Joining forces to find solutions

What can be done to ensure that the retail sector keeps up with the times, without compromising on diversity in our city centres and on rural supply? The Retail Trade Dialogue Platform has succeeded in identifying new prospects and opportunities.

At the heart of the Retail Dialogue Platform were five series of workshops, each consisting of between two and four workshops on various topics. Each of these workshops were attended by representatives of business, trade unions, business associations, chambers, municipalities and cities, the Federation and the Länder, and from academia. The Cologne Institute for Retail Research was in charge of coordinating the work of the platform on behalf of the Federal Ministry for Economic Affairs and Energy. It organised the process itself, coordinated with the stakeholders on substance, and analysed the overall project.

The platform sought to involve all different kinds of stakeholders to ensure maximum support for the solutions proposed by the platform on this complex and sensitive societal issue. The results of the series of workshops will be presented at an event entitled Fresh prospects for the retail sector on 6 June 2017.

Overview of the detailed results

In their recommendations, the members of the platform have spoken out in favour of pilot projects that would see new cooperation between different retail companies. This would allow these firms to pool their staff and their retail and warehouse space and thus cut costs. Furthermore, cooperation between several different municipalities could ensure that citizens have access to local shopping facilities. For instance, it would be possible to establish small-scale department stores that would also cooperate with providers of different kinds of services.

The main outcomes of the work completed by the Retail Trade Dialogue Platform can be found in the brochure ‘New Prospects for the Retail Sector’ (in German), which is available for download here.

To see the reports on the five series of workshops or a summary of individual workshops, please go to:

Centre of excellence for retail to continue the dialogue established by the platform

Speaking at the presentation of the results of the platform’s work, Federal Minister Zypries made clear that the retail dialogue will continue beyond the work of the platform: “The retail sector provided around 3 million jobs in 2016 and generated more than 480 billion euros in turnover, which makes it one of the most important sectors in our economy. Our goal is to provide practical support. We are using the recommendations for action to draw up a plan for a centre of excellence for retail.”

Woman decorating shop window of a fashion boutique, symbolizing retail dialogue platform; source: Getty Images/Hero Images