The pace at which our retail landscape continues to change never ceases to surprise. What’s more, it’s accelerating rapidly. The number of opportunities for shoppers to transact are rising, retail formats evolving and the fight for share of shopper wallet becoming nothing short of brutal.
Physical shops are the bedrock of UK retail. Those who are clearly defined, know their consumer and can communicate their point of difference will win. At the same time technology and pressures on our disposable income level are driving choices and changing the way we behave.
Understanding the impact & embracing these changes is essential in order for food & drink suppliers to win. After all, in six months time how many of us ordering our weekly shop on an Apple Watch?
1. Return to Differentiation.
As I write in early January, 2015 has started where 2014 left off, with retailers, being focused on price; the battle for who can grab the headlines and go the furthest to appeal to consumers feeling the pinch. Yes promotions turn the tills but the trouble here is convergence – every deal in every store the same. Even premium player Waitrose I see are luring shoppers with a Half Price Event!
Against the backdrop off falling commodity prices , be warned retailers are likely to ask for cost price cuts as trading gets tougher. With all this going on retailers must get back to differentiating and giving consumers another reason to pull into their store. The hero – innovation: new brands that add value and have a clear point of difference will win.
2. ‘Be Omni-present’ lifestyle
New technology continues to bring consumers together and allows access at the touch of a button into different channels, forums and retail sites. Social networks have become shopping platforms.
Research has shown about one third of online consumers are using multiple channels simultaneously and this can be done at any time of day or night from any location. The challenge for new entrants into these markets is to ensure that your brand message is consistent and relevant across these platforms and across different technology – when much of it is not under your control.
3. Store cards to be replaced by personally tailored promotions
Sainsburys offer fewer nectar points, Tesco reviewing future of Clubcard. The practice of saving points just doesn’t cut the mustard anymore in an age where consumers are demanding immediate satisfaction.
Going forward as consumers embrace a digital age, each and everyone of us will be sent bespoke set of promotions redeemable only at the virtual or in-store, delivered to our tablets or phones. Loyalty programs will be replaced by ‘a personal incentive’ initiated by computer generated algorithms.
4. Convenience Online
The consumer is now expecting outstanding service. Those that provide will win. You can now book a guaranteed 1⁄2 hour slot on line on the same day from one supermarket. Click & Collect will go mainstream. Whilst Tesco are set to build on their relationship with London Underground, Asda are set to leading the way with their temperature controlled pods. Oh, and did I mention Amazon trialing deliveries in the US by drones? Further afield in the country, why not even get your weekly shop delivered to your local pub. There’s actually no need in fact to leave the home. Where’s the ‘run out of milk app’ when I need one?
5. A Great customer experience
With falling footfall in the majority of out of town stores, retailers have their work cut out to keep shoppers returning. Creating a great customer environment with just racks of shelves is tough.
To grab our attention displays need to be brave and bold and link across media. Wholefoods are leading the way here and Tesco are trying but most supermarkets in particular have a long way to go. Whilst the digital revolution will provide new opportunities it is important too for new suppliers not to lose perspective; you still have to ensure your fundamental customer shopper experience happens in bricks & mortar stores.
6. Mobile Payment
Contactless payment is here to stay and the mobile wallet will emerge with the launch of Applepay, Googlepay and others. This year mobile payment capabilities will reach outside of Starbucks. Its quick, slick, records data and you’ll never be short changed by the student on the counter.
Whilst we might be a few years away from supermarkets going completely cashless (this would be bold), we’ll almost certainly see ‘cashless checkouts’ and in-store scanning by phones for those that want to hop the queue. Who will be the first to offer me a discount if I scan and pack my own groceries?
7. CSR is no longer a choice it’s a must
Consumers will make decisions based on peer review, trust rating and data capture more than ever before. Online reviews, ‘likes’ forums and google+ undoubtedly influence consumer behavior and provide comfort and direction for those seeking something new to offer the consumer .
The emergence of comparison sites in recent years has boosted this need. Retailers & brand owners alike – you simply can’t afford to fool your consumer. Your customer will know and it just takes one tweet to destroy your business. Corporate social responsibility will continue to build. Don’t pretend your haricot verts are French if they are imported from Asia out of season!
Whilst change is forever in the wind there are some certainties for retail; savvy shoppers are discerning & becoming more promiscuous, strong and relevant brands will prosper, innovation will continue to excite, commodities will be squeezed. Building a consistent message across all platforms and formats will be the key to winning.
I may not have my Applewatch yet and I’m not sure if I’m going to prefer to wear it over my Seiko. I wonder how many of us will be ordering our Christmas turkey on one this year?
© Grocery Accelerator 2015 Simon Lacey – Co Founder