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Day 4 - IFA International

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Trade Talk The Retail Pulse Industry trends as seen – and experienced by the leading retail organisation – Euronics International In the TCG market it’s not all smooth sailing at the moment, but there are some sunny islands and calm bays if one looks in the right direction. We asked John Olsen, CEO of Euronics International, to outline the current trends as he sees them. Overall market development in value has been slightly negative vs. last year. The value growth of tablets has stopped and the other categories are either flat or negative. The strongest performing category in 2014 was Smartphone, heavily fuelled by the Introduction of iPhone 6 at the end of 2014. The worst performing category is Photo, which is down more than 20% in value vs. last year. So with the traditional market being stagnant, Euronics will, as an added value retailer, be on the forefront in offering the consumer the relevant solutions within the Connected Home (Internet of Things) domain. Especially in the emerging Smart Home category, we are in a strong position to capitalise on increasing amount of propositions and solutions, since we as the Trusted Advisor to the consumer, can both help the consumer in choosing the right solution but also help the consumer in installing the Smart Home solutions in the consumers’ home. So you are noting that more and more people need face-to-face advice? Absolutely. For us, this is a major opportunity for growth in the future. I read a forecast a few days ago that by 2022, the average family will have 500 connected devices in the home. But today, when a consumer buys products, he or she might not know that they may come from different ecosystems. Of course the retailer knows The only way we can grow as a retailer is to embrace innovation when it comes to the Internet of Things and the smart home that a system that controls the door and window locks does not speak with the Google Nest system, but the consumer does not know this. They could well buy a whole swag of products, try to install them at home, and find they don’t function together. Therefore we see a big opportunity for our retailers… also because they still invest in staff. The average employment period for a staff member at Euronics is about seven years, so that means we can train them well, and suppliers can explain different topics to them in detail. The traditional Technical Consumer Goods market has been stagnant for a couple of years and the only way we can grow as a retailer is to embrace innovation when it comes to the Internet of Things and the smart home. Further to this we have taken steps in engaging further with our industry partners in joining the ALLSEEN alliance as the second retailer worldwide after Sears. So we are very active in driving our own destiny in this new, emerging category; not just sitting on the fence and saying, “We need standards”, but actually working with the suppliers towards the compatibility and harmonisation of different product categories in order to better sell them. Connected devices are nice, but if they can’t talk together, they are not smart. That’s the difference between connected homes and smart homes. That’s the value we can add as a retailer. For the moment, you can’t sell that on line, because consumers won’t understand what works and what doesn’t work together. Where is most of Euronics’ growth coming from? Some growth is coming from our international expansion, but we see in most of the countries, our group is performing above average. So there are two sources of growth. Achieving growth in tough markets is something we are proud of. Looking more specifically at product, how is the arrival of Windows 10 affecting sales? We are very pleased with what we are seeing so far with Windows 10. I think this gives a lot of opportunities for us as well. The IT category has been stagnant or even in decline, John Olsen CEO, Euronics International and the arrival of Windows 10 gives us opportunities to sell more two-in-one devices instead of normal “clamshells”, so people can fully benefit from the Windows 10 interface, using it both for productivity as well as for entertainment as a stand alone tablet touchscreen functionalities. This is a big theme at IFA, as we work with vendors such as Lenovo, HP and others in order to drive the conversion to Windows 10 - to improved products. IFA International • Monday 7 th September 2015 21

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