Walmart Snaps up Flipkart; April Retail Sales Slump in UK

RetailTechNews rounds up some of the biggest stories in the European retail technology space. In this week’s edition: Walmart Snaps up Flipkart; Early Easter Responsible for UK Retail Sales Slump in April; H&M Turns to AI for Predictions & Customisation; and Smartphone Shopping Has Become Mainstream.

Walmart Snaps up Flipkart

Bitter defeat for Amazon: U.S. retail chain Walmart has outpaced the online retail giant in the battle for Indian online retailer Flipkart. According to news reports, Walmart will acquire a 77% stake in Flipkart for a price that will value the Indian retailer at more than USD$20bn. The remainder of the business will continue to be held by some of Flipkart’s existing shareholders such as co-founder Binny Bansal, as well as Tencent Holdings, Tiger Global Management and Microsoft Corp.

Flipcart HQ

The takeover of Flipkart is worth USD$16bn (£12bn), paid for in a combination of cash and newly issued debt. Flipkart is to operate independently and under its own brand; but Walmart is hoping to change their new asset into a publicly listed subsidiary at a later stage.

“India is one of the most attractive retail markets in the world, given its size and growth rate, and our investment is an opportunity to partner with the company that is leading transformation of e-commerce in the market”, comments Doug McMillon, president and CEO, Walmart. “As a company, we are transforming globally to meet and exceed the needs of customers and we look forward to working with Flipkart to grow in this critical market.”

Online retail is enjoying massive growth in India. For the last fiscal year, Flipkart recorded GMV of USD$7.5bn (£5.5bn) and net sales of USD$4.6bn (£3.4bn) representing more than 50% year-on-year growth in both cases.

Early Easter Responsible for UK Retail Sales Slump in April

A sharp decline in retail sales figures in the UK in April can been attributed to the early timing of Easter this year, says the British Retail Consortium. The monthly BRC-KPMG Retail Sales Monitor records a 3.1% decline in total sales when compared to April 2017.

The sales drop in April was “almost inevitable”, according to Helen Dickinson, CEO, BRC, due to Easter shopping being conducted in March this year. “However, even once we take account of these seasonal distortions, the underlying trend in sales growth is heading downwards”, Dickinson says.

On a total basis, the sales decrease of 3.1% in April 2018 compares to an increase of 6.3% in April 2017 and is the sharpest decline recorded by the BRC/KPMG Monitor since January 1995.

However, online bucked the trend again, with sales of non-food products growing 6.7% in April (10.3% in April 2017). Nonetheless, the latest growth rate was below the three-month and 12-month averages of 7.1% and 7.5%, respectively. The online penetration rate grew from 20.8% in April 2017 to 22.0% in April 2018.

H&M Turns to AI for Predictions & Customisation

Fashion retailer H&M is investing in big data and artificial intelligence to bring their sales predictions and merchandise customisation up to speed, the Wall Street Journal reports. The Swedish retail chain wants to utilise algorithms for more accurate and location-specific predictions on sales needs, as well as stocked goods.

Based on granular data from returns, receipts, and loyalty card use, data analysis will provide stores with recommendations based on the individual locations. Relying on analytics customised per location will take local needs and demands into account.

Analysts and data scientists are increasingly getting involved to determine purchasing patterns in individual stores instead of buyers. Combining data from store visits with business data such as production costs and purchasing prices at source, the company hopes to calculate attractive prices for the items to be sold in their 4000+ stores.

Smartphone Shopping Has Become Mainstream

Digital shopping via smartphone is set to stay; but retailers have to react to the increasing demand from consumers for digital shopping assistants, according to a new study by telco company Ericsson. With voice-assisted shopping set to increase to USD$40bn (£30bn) by 2022, investments in digital shopping assistants are more important than ever.

Based on a survey of more than 5,000 consumers in 10 urban centres across the world, the study finds that 43% of consumers already shop via smartphone on a weekly basis, with 67% regularly paying for goods in-store on their phone. Forty-seven percent of smartphone shoppers are open to digital shopping services that automatically restock everyday items. However, top of the wish list for capabilities of digital shopping assistants are price comparisons (63%).

The future of shopping is AR and VR – at the cost of brick-and-mortar stores. According to the survey, 64% of AR and VR users believe that in as short as three years’ time, almost all shopping will take place through a smartphone, and physical stores will disappear.

“While fascinating in their own right, fast-changing consumer shopping behaviours are important to understand for anyone involved in 5G, smart homes, consumer IoT, and artificial intelligence”, says Michael Björn, head of research, Ericsson Consumer & IndustryLab. “When consumers start employing AI to automate everyday purchasing, this will create demand for IoT-enabled sensors, as well as a need for people to connect appliances in their homes.”