3 questions for . . .

Anne-Lise Glauser, PwC strategy teams associate

HEC graduate Anne-Lise Glauser joined the international PwC network in London in 2001. Since 2009 she has been with the Paris office where she is now a strategy teams associate. For the 30th anniversary of the ESSEC Consumer Goods Chair, Ms. Glauser and her PwC colleagues forecasted the major changes for the retail sector and consumer goods for the next 30 years. The study, which anticipates and analyzes the structural factors expected to provoke these changes, is part of the “Grande consommation 1985 – 2015 – 2045” (“Mass Consumption 1985 – 2015 – 2045”) report published in partnership with the ESSEC business school. Ms. Glauser shares with us some details from the study and their consequences for the apparel sector.

What are today’s major challenges for the consumer sector in general and for apparel consumption in particular?
Today the apparel sector is faced with a foot traffic problem in both malls and high streets. The way consumers function has changed. People don’t have the same attitudes towards stores. They don’t visit them to get ideas, as in the past. They make fewer impulse purchases as well, due to economic reasons. There’s a convergence of factors in the sector’s economic crisis. Fewer visits to stores highlight the problem of decreased appeal. Brands and stores need to think about the right positioning to make clients loyal, and how to offer a buying experience and product that stands out from the competition. They should also use pricing to their advantage and present the right price at the right time. That happens through better analysis of target clients. Finally, they need to consider their stores’ locations. There are a lot of retail square meters in France. We know that growth occurs, now and in the past, by opening stores. Today we need to be more rational about retail and think in terms of quality rather than quantity for some of these stores.

What impact do new technologies and connected clients have on fashion consumption?
It’s clear that digital technology is now routine and gaining more and more ground. That has an impact on apparel and every consumption category. From now on, consumers’ first reflex in planning purchases is to use Internet, which searches for products and brands. The first step has become digital technologies which are an immense shop window with search engines and websites. Stores come afterwards. Using Internet to plan and think about purchases plays a role in choosing the store. Of course, those who don’t enjoy going to stores will naturally get information and even buy online. Some consumers also shop on foreign sites for products which are not available in France. Additionally, shoppers increasingly look for the opportunity to personalise products. You have to remember that the apparel sector has a strong presence in the digital world. It’s second in terms of online purchases, behind household appliances/high tech. Online spending is very popular with the under-45s, but also developing with older age groups, especially with the use of tablets. As for online retail, sales for the leading distance sellers and pure players are stabilising. For a little over a year, brands and retailers, once lagging behind, have enjoyed online sales growth. And they can still expect good growth margins. In the United States, online purchases represent 17 percent of apparel purchases compared to 5 percent in France. These figures include “click and collect” which plays an important role.

What’s the forecast for the international economic balance between now and 2045?
For the short term, we already see that G7 countries are slowing down. China is very attractive. It’s already our top export partner. We’ve given the name “E7” to the group made up of China, India, Brazil, Russia, Indonesia, Turkey, and Mexico. Their economic power is growing non-stop. In 2050 this group will be worth double the economies of the G7 countries. With a base of 9 billion citizens, that’s where the consumers and young people will be. The population in these countries will be increasingly urban and the women more and more active. Logically that’s in our favour since these populations have a real desire for French and European fashion. At the same time, in the G7 countries we need to capitalise on the potential of an ageing population, since a part of this population is in relatively good health and has good purchasing power. When dealing with this clientele we need to think about questions of price and product, without forgetting the buying experience. The main issues here are proximity, practicality, and mobility. Currently we have the feeling that brands aren’t sufficiently anticipating this demographic evolution. And yet, it’s an opportunity to create great stores and great collections.