Digital Commerce to find new ways in SGBA’s retail sector
13.11.2018

Digital Commerce to find new ways in SGBA’s retail sector

Long-term planning is a core commitment of the St.GallenBodenseeArea (SGBA). An increase in vacant retail areas in the region’s cities suburban or rural areas alike point to structural changes in the retail sector. For the administration and politicians in the SGBA, such signs of changing dynamics always are a call for action, an opportunity to update and further improve the business environment for existing stakeholders in the retail sector. What exactly are the fundamentals of the structural changes in the retail sector? How and to what degree will it impact existing, classical retail models?

 

Answers to these questions were given in a workshop that was part of the project "Structural Change in the Retail Business", organized by “Metropolitanraum Zürich” in early October. A significant part of the workshop was dedicated to case studies of St.Gallen and the SGBA, to focus on action items and potential for success of the residential and stationary retail, with particular attention paid to the chances and challenges posed by „Digital Commerce“

 

The strong growth of non-food products in online retail was the focus of Thomas Lang, Managing Director and Owner of Carpathia consulting, and a proven expert in digital commerce. As of today, already 14% of this business is done online. Looking at industry trends, the share of online retail can be expected to grow by up to 30%. New market segments such as online retail usually require an extended initial period to gain the first 10-12% market share – after which growth accelerates. Furthermore, if experiences from advanced, liberal and business-friendly markets such as the USA offer any guidance, further growth of the online share in the retail sector and a market consolidation towards fewer players can be expected.

 

With a project named "St.Gallen’s Inner City Future", the city of Gallen has been anticipating developments like these as early as in 2016. In close collaboration with local retail and trade organizations, city authorities are intent on monitoring and addressing changes in shopping and consumption behavior – and they’ve already been successful: St.Gallen has defined nine different action items for retail-friendly sustainable urban development projects. Two of the measures have already been implemented: The temporary use of vacant retail space for pop-up stores for instance has been strongly simplified and encouraged; the city has also appointed a City Manager as the go-to person to decisively jump at the opportunities offered by structural changes in the retail sector.

 

The online shift in retail will continue to put pressure on stationary and residential retail space, which in turn also will affect the appearance of cityscapes and small towns in the SGBA. A final report about the formal and quantitative impacts from structural changes in the retail sector is due to be published in spring of 2019. It will offer more definitive guidelines for authorities, retailers and real estate professionals, in order for the entire business region to tackle the digital challenges, together and successfully. Because change cannot be stopped, its momentum is an opportunity not to be missed.

 

When it comes to retail in the SGBA, we have our eyes on the ball.