At the conference, Oliver Samwer, Founder of Rocket Internet, which describes itself as “the world’s largest internet incubator”, having supported the development of more than 100 online companies, said online retailers were quickly eclipsing physical chains.
Younger people were increasingly demanding the immediate door-to-door service internet shopping could deliver and the focus of development for retailers now should not be physical sites, but web platforms, he said: ”Ceo, plaforms, that’s who your ceo should be.”
However, at a subsequent panel debate involving Samwer, Erin Hunter, global head of consumer packaged goods at Facebook, and Doug Herrington, vice president, consumables, at Amazon.com, Price unashamedly introduced himself to Samwer saying: “Hi, my name’s Mark, I’m a dinosaur.”
In the future, the major traditional retailers would still have vital roles to play in the community and in job creation, he said. And he warned new online retailers would have to struggle with the same issues traditional chains had, such as labour relations and ethical sourcing.
‘People like interacting’
Price also disagreed with the notion that, if there no physical stores today no one would build any. “I don’t think it’s right. I think people like interacting.” He said because the development of online propositions was so exciting and new, people were overestimating the impact it would have.
Samwer, founder of Rocket, scorned the concept of ‘click and collect’, where consumers could order groceries online and collect them in store. “Most people don’t want to collect in store when they can get stuff delivered at home.”
Price countered: “In the UK, more people are clicking and collecting than anything else. I wouldn’t rule out click and collect for the future.”
Amazon’s Herrington said: “The idea of building a platform and selling everything on it is the right way to think about it … I can’t quite see a world where there’s no physical shopping, but I do think we are moving to a world where there’s very strong online shopping coming up.”
In an earlier presentation, Price said the recession and credit crunch had hit traditional retailers, including Waitrose very hard. However, he said Waitrose had bounced back, launching its budget Waitrose Essentials range in 2009 and smaller store formats in 2010 and “ramping up product development”.
Grown online sales more than 50%
The retailer had grown online sales by more than 50% in the past two years and had also set up outlets at motorway service stations, he added.
Price said he believed traditional retail chains could still deliver a strong face-to-face and experience-driven proposition. “As we look to the future, the market is polarising and retailers have to make a decision. They have to focus on experience or low prices. In retail, competition will be around one of those two things.”
Waitrose would focus on delivering the best experience and service for the shopper and its online proposition would be part of that, he said. “Loyalty and engagement remain core,” he added, and Waitrose aimed to deliver an “affinity based on kindness and warmth, not mechanical devices”.