Bain & Company: Consumer products and retail in a changing world < Hot topics

As the global economy shifts in multiple ways, consumer products companies and the retailers who sell their goods need to adapt. Bain & Company's unique perspective on how players can meet the new challenges facing them is explored in our Retail Holiday Newsletters - regular, in-depth reports on retailers' efforts to adjust to the most difficult shopping seasons in decades. Those newsletters, which focus on the U.S. retailing landscape, are featured in the compendium of articles available on this page.

While the U.S. represents the largest market for consumer products and retailers, Bain & Company's point of view addresses the specific concerns of players throughout the world. For example, in India and China players are learning how to grow in rural areas that are suddenly - and surprisingly - gaining in shopping power. European companies are learning to better serve aging and more demanding consumers. Companies in the United Arab Emirates struggle to deal with much slower growth while their Australian counterparts find they need to better prepare themselves for rapid shifts in consumer behavior. Meanwhile, Japanese companies have learned to adapt to recession-weary consumers who are trading their luxury preferences for bargain shopping.

These are some of the critical issues explored in our many recent articles on the changing global consumer products and retailing landscape. The compendium of articles available on this page offers decision-makers the latest thinking and proven success strategies for a consumer products and retail industry undergoing rapid and dramatic transformation.

Australia

To sell in Australia, being nimble counts
BusinessWeek
by Emma Gray, Jayne Hrdlicka and Mike Booker
Australia's downturn story is playing out differently than in other countries, but forecasters warn that Australian companies are not out of the woods. In periods of uncertainty, consumer product companies need to prepare. Those that have a low-cost position, listen to shoppers, and create nimble organizations that can act on customer insights will end up leading the pack.

China

The race for "small" town China
Far Eastern Economic Review
by Bruno Lannes and Larry Zhu
Growing competition in China's biggest cities is taking its toll on companies' operating margins. That's why multinationals have started looking to mainland China's Tier-2 cities, where middle-class incomes are rising the same way they rose in Tier-1 cities earlier in the decade.

Looking for growth in a slower-growth China
Bain Brief
by Bruno Lannes, Kevin Chong and Mike Booker
As the financial crisis swept across the globe, China defied recessionary pressures and continued to grow. Although the pace has cooled, many forecasters are predicting that the emerging market titan may be the first major economy to accelerate out of the downturn. But even if China does rebound, consumer products makers and retailers are confronting a reshaped landscape, one that is both more complex and brutally competitive.

Marketing in Asia: lessons from recessions past
BusinessWeek
by Mike Booker, Satish Shankar and Bruno Lannes
Asia's fast-growing emerging markets have been good to multinational consumer-product trailblazers. But now that the global downturn has caught up with them, companies are feeling the threat of slower growth. Those who emerge as winners will be the companies best able to use the lessons they learned in previous troubled times still sharp in their memory.

The top 10 consumer trends defining China's emerging domestic market
AdAge China
by Richard Ho
With total consumer spending increasing by nearly 15% annually over the past few years, China's domestic market is in the midst of a boom. Richard Ho, a partner at Bain & Company in Shanghai, identifies ten trends that will define the country's emerging domestic market

How Europe's grocers keep food sales fresh
The Wall Street Journal
by Marc-Andre Kamel, Nick Greenspan and Rudolf Pritzl
With consumer confidence eroding and retailers seeing sharp declines in sales, Western European grocers are taking advantage of the strategy of "localization." The capability to cater to local preferences in a cost-effective way will be the key to their growth.

India: Strategies for consumer goods
BusinessWeek
by Ashish Singh, Mike Booker and Sandeep Barasia
To keep consumer goods flying off the shelves in India during the slowdown, companies have to focus on the right products at the right prices.

Learning from recession, the Japanese way
BusinessWeek
by Hiroshi Makioka, Jean-Philippe Biragnet and Mike Booker
Driven by sophisticated consumers, Japanese companies are highly evolved as innovators. And they've been dealing with downturns since Japan's financial crisis began in the 1990s. Demanding consumers and prolonged economic hard times have taught Japanese companies how to adapt, and some are emerging as winners.

Chic is out, cheap is in
Far Eastern Economic Review
by Hiroshi Makioka
Japan's economy once again is growing, albeit slowly, but the road back from the nation's longest recession since World War II is rocky. With the job market still unsettled and the Yen dropping in value, wary consumers are not returning to their old shopping habits. A different breed of Japanese consumer has emerged and may be here to stay.

Slower growth exposes GCC retailers' weaknesses
Saudi Gazette
by Jean-Marie Pean and Cyrille Fabre
For the first time in years, the Gulf region's growth engine is stalling out, leaving retailers with lackluster sales and mounting pressure on cash and profitability. Among the hardest hit categories are durable and discretionary goods. Savvy retailers will use the downturn as an opportunity to clarify their strategy, strengthen their organization for faster and better decisions, improve category management, and follow shoppers' flight to value.

Bain Retail Holiday Newsletter #1
by Darrell Rigby, Kris Miller and Josh Chernoff
After nearly two years of recession, we are starting to see signs of a turnaround. As we head into the holiday period, we expect negative growth trends to reverse, and are forecasting GAFO growth for the season of 0% to 1% over last year. Retailers are better prepared for the holidays than they were in 2008: Inventories are leaner, value trends are no surprise, and savvy marketers are basing decisions on the needs, wants and behaviors of local shoppers. The purpose of this newsletter is to provide relevant information about holiday sales trends and strategies for success in this critical period. Updates will be distributed every two to three weeks throughout the holiday season to help you monitor both trends and results as the season unfolds.

Bain Retail Holiday Newsletter Special Edition: Social Networking
by Darrell Rigby, Kris Miller and Josh Chernoff
The 2009 holiday season has officially begun. Early indicators are simultaneously raising hopes and anxieties. October's same-store sales grew 2.1% over 2008's soft numbers, marking the second straight month of gains and showing improvement among both lower-priced and higher-end retailers. But the unemployment rate also rose above 10% for the first time since 1983, and consumer confidence and sentiment were down. Bain & Company believes that retailers can deliver positive growth this holiday season, but that's going to take innovation and action. One solution may well be social networking, a quick, flexible and effective way to connect to consumers. That's the focus of this special edition of our Retail Holiday Newsletter.

Bain Retail Holiday Newsletter #2
by Darrell Rigby, Kris Miller and Josh Chernoff
GAFS growth turned positive in October after 13 consecutive months of downward movement. Furthermore, recently released reports of third-quarter earnings tell us that margins and balance sheets are healthier than they were last year. A number of retailers exceeded their own projections for the quarter and raised guidance for the rest of the year. Still, as we enter the heart of the holiday shopping season, many consumers remain cautious. Some are delaying their holiday shopping, hoping to see a repeat of last season's deep discounts. Retailers need to be creative to get these shoppers spending both in stores and online.

Bain Retail Holiday Newsletter #3
by Darrell Rigby, Kris Miller and Josh Chernoff
Shoppers made a brief but welcome appearance over the Thanksgiving weekend, flocking to stores and Web sites to take advantage of Black Friday doorbusters and other deals. They spent enough to set new sales records in both offline and online spending for the weekend. This was, however, not enough to offset an otherwise lackluster November in which same-store sales growth ended up roughly flat. Still, recent earnings releases show that profits continue to exceed last year's levels, thanks largely to better inventory management and reduced discounting. The hope of a strong December remains. In what is sure to be a very competitive second half of the holiday season, the challenge for retailers will be to strike the right balance between promotions and profits.

Bain Retail Holiday Newsletter #4
by Darrell Rigby, Kris Miller and Josh Chernoff
Retail sales generally are improving. Although November GAFS sales were down 0.6% from last year, growth rates for all segments have been trending upward over the last several months. Hope remains for a strong December: Consumers, retailers and analysts alike are showing signs of optimism. To create and sustain momentum, retailers are testing and implementing creative ways to drive traffic, conversion and repeat purchases. Those strategies will continue to be critical as we head into January, a month that is increasingly important to ending the holiday season and starting the New Year on a positive note.

Bain Retail Holiday Newsletter #5
by Darrell Rigby, Kris Miller and Josh Chernoff
Preliminary sales results for the 2009 holiday season are in, and the news is better than expected. Retail sales for November and December were up 1.2% over 2008, exceeding most forecasts. These results lend hope that momentum is gradually building as we exit an otherwise bleak year in which GAFO sales fell 2.6% overall. With the 2009 holiday season over, we turn our attention to the new year. We close our final newsletter of the season with a discussion of key retail strategies in 2010.