Post on 25-Aug-2018
Looking ahead: Five trends to watch
1. The Science of Pricing 2. Just for Me 3. Augmented Life
© IGD 2014Source: IGD Research. Images: Thinkstock, Google, www.blog‐growth.com
4. David Vs. Goliath 5. The Currency of Trust
Trend 1: The Science of PricingW k h t t li b tt f l A d i t d ’ li ld i fil b dWe know shoppers want to live better for less. And in today’s online world, price files can be accessed
in an instant, delivering complete price transparency but with what consequences?
• In 2013, we spotted a growing number of sites providing instant comparison for prices across competitorsinstant comparison for prices across competitors
• Businesses such as mysupermarket.com or Profitero, whose customers include Sam’s Club, Tesco, Ocado and Waitrose, can monitor any retailer with an online presence
• This technological trend towards price transparency has led some retailers to adopt a price matching policy which can nullify price differences and drive customer loyalty beyond price – the UK market initiated this for grocery but we expect it to spread to other countries
Price & promotion comparisons made easy
mySupermarket helps savvy shoppers get the best prices for comparable products. It
expect it to spread to other countries
• But price matching could squeeze out profitability so we anticipate more complex, dynamic, personalised pricing models to appear in the future – prices will vary more often, even throughout the day and could decrease at POS to includes clever features such as ‘Swap &
Save’ which prompts you to swap products in your basket for cheaper alternatives, price histograms to help you decide if you should wait for a better promotion. It also offers a
even throughout the day and could decrease at POS to reward loyal customers....
• According to Profitero’s CEO, Amazon changed its prices 2.5 million times per day in 20131) – significantly more than its US i l W l d B B Thi l f ld
© IGD 2014Source: IGD Research, 1) Profitero research – for month of November 2013, www.mysupermarket.com
wait for a better promotion. It also offers a single, combined, check‐out even if you shop across different retailers.
US rivals Walmart and Best Buy. This was also a ten‐fold year‐on‐year increase, demonstrating more reactivity in the face of fierce competition – expect more in 2014!
Trend 2: Just For MeCustomers are incredibly quick to pick up new technologies that make their lives easier TechnologyCustomers are incredibly quick to pick up new technologies that make their lives easier. Technology puts customers in the driving seat and they expect more intuitive, relevant solutions, every time.
• Personalisation of marketing and products is a long talked‐about revolution that is finally coming of age with profound implications for shoppers retailers and suppliersimplications for shoppers, retailers and suppliers
• For shoppers – The era of ‘hyper‐local’ is arriving with localised, timely, targeted deals based on our preferences. From 3D printing to smart devices and facial recognition, new t h l i ki l t t i ti ibl
Just For Me: 3D body scan for perfect fit
Les Nouveaux Ateliers has found a way to
technologies are making low‐cost mass customisation possible
• For retailers – Shopper relevancy is now at the heart of retail loyalty and digital innovation. In 2013, we spotted many schemes going digital via apps and predict further acceleration
make suit and shirt tailoring affordable and fun. An in‐store 3D body scan takes 200 measurements. Then you choose every detail to your taste: colour, pockets or not, buttons, etc. It is home delivered
in 2014 as retailers seek more ways to make life easier for their shoppers and bid to retain their custom
• For suppliers – Retailers want more tailored, differentiated products and promotions to distance themselves from the or not, buttons, etc. It is home delivered
for free. At €49 a shirt, it is affordable luxury!
Launched in Paris in 2011, the concept is now expanding It is easy to imagine this
competition. For instance, Auchan recently asked suppliers for ‘smaller packs’ to offer lower price points in 2014. Building capability to deliver unique and bespoke solutions for each key account in a profitable way will be key. Suppliers can also offer personalised but affordable products for consumers in the
© IGD 2014Source: IGD Research, Les Nouveaux Ateliers
now expanding. It is easy to imagine this working in a large hypermarket to make clothing more personal for customers
personalised but affordable products for consumers in the real and virtual world ‐ Coca‐Cola’s Share a Coke campaign is a case in point!
Just for me: personalisation coming of age
© IGD 2014Source: IGD Research, Retailers
For Shoppers For Retailers For Suppliers
Targeted in‐store initiatives will stand out
DemonstrationsE perientialSampling Partisans d Demonstrations –Ole, China
Experiential ‐HEB, USA
Sampling – Partisans du Goût, France
© IGD 2014Source: IGD Research, Retailers
Pop Up Shop ‐Morrisons, UK
Trend 3: Augmented LifeTh t l it d i ti f 2014 i G l GlThe most eagerly awaited innovation of 2014 is Google Glass.
Wearable computing will revolutionise our daily lives. Could smart glasses replace smart phones?
• Augmented reality (AR) apps already allow access to real‐time contextual information and are readily available fortime contextual information and are readily available for phones today but they are a more natural fit for smart glasses, whichmake content consumption easier, seamless, and instant because of their hands‐free nature
• For in‐store shoppers smart glasses make access to
Developers adapt apps for smart glasses
For in store shoppers, smart glasses make access to information like price comparisons or nutritional content simpler – you can push your trolley and pick up a product whilst reviewing offers via your glasses!
• Eventually small and efficiently powered wearable Developers adapt apps for smart glasses
Intuit, a California based software company which has a suite of payment apps for small businesses, is developing a version of its G P t f G l Gl
• Eventually, small and efficiently powered wearable computing could replace hand‐held devices but in the meantime, smart glasses will complement smart phones
• Tech experts predict Google will dominate the smart glasses market when it first launches butmany businesses GoPayment app for Google Glass.
The app will enable a Google Glass user to make direct payments by tapping the side its Glass and accepting the displayed QR code which will have been sent by the retailer.
glasses market when it first launches, but many businesses including Apple, Microsoft, Samsung, Sony, Vuzix, Oakley or Chinese Baidu are reportedly working on a similar concept
• We think widespread consumer adoption is still a few b h l d d d il
© IGD 2014Source: IGD Research, Images: GooglePlay
yThe receipt will be directly displayed on the Google Glass eyepiece.
years out, but the early adopters are ready and retailers want to experiment...so look out for the first in‐store applications as soon as smart glasses hit the high street...
Trend 4: David vs. GoliathBi d t b b tif l b t l i d tt k ith th f ll il t t hi hBig used to be beautiful but scale is under attack with the emergence of small, agile starts‐up which can
disrupt standard business models. Does big business need new tricks?
• It is a rare occurrence when the five largest players in a market all lose share to smaller players – but this is what’s happened in the UK according to Kantar’s data*
• This is the latest sign of traditional assumptions being challenged by the rise of focused formats, online and digital in markets around the world
Good Eggs reinvents the farmers’ market
Good Eggs started earlier this year. Rob
• Low start‐up costs for online businesses enable ideas to come to life faster than ever before. And although many fail, some will succeed and could become the next Amazon
Spiro, co‐founder and ex‐Google, spent time with farmers and shoppers before launching its online farmers' market.
In New Orleans and San Francisco, residents l t f h l d t f
• Click & Collect also enables convenience stores to offer more choice without the need for bigger stores. And the potential deal with TFL1) to add Amazon lockers in the London Tube would be yet another game‐changer for retail in mega cities
can now select fresh, seasonal products from over 300 regional producers. Their orders are pre‐sold so farmers know exactly what to pick, reducing waste. Customers can collect at a local hub or schedule a home delivery.
• So what does it mean for capital intensive, larger format stores – the Goliaths of the retail world? For one, they are delivering more experiential retail with services like Auchan’s3D Christmas gift printing service or cosy coffee bars
© IGD 2014Source: IGD Research, * 12 weeks to 8th December 2013 vs. 12 weeks to 9th December 2012; 1) TFL = Transport for London
Good Eggs aggregates orders from multiple farmers with a $3.99 delivery fee.
• They are also intent on digital leapfrogging. Not an easy task but global retailers are adopting more of a start‐up mentality or simply joining forces with one to ‘make seamless happen’
New solutions can breakdown other barriers
Home Delivery Click & Collect
© IGD 2014Source: IGD Research, Retailers
13
More online shoppers trial click & collect services Used in the last month
95% 95% 91% Jun'13 Oct'13 Jan'14
18%14%
20%16%
25%18%
Home Click & Used
© IGD 2014IGD ShopperVista Channel Focus, past month online shoppers Nov‐Jan 2014
Home delivery
Click & collect
Usedboth
14
Usage expected to growOver the next 12 months
Less More
6% 18%Use a tablet computer to book,
add items or checkout
Use a smartphone to book,8% 18%
Use a smartphone to book,add items or checkout
11% 14%Use a Click & Collect service, to pick up my shopping from a store or special site
© IGD 2014IGD ShopperVista Channel Focus, past month online shoppers Nov‐Jan 2014
Trend 5: The Currency of TrustB ildi t t t k ti d h d k t it i il l t L t t lk d b t b dBuilding trust takes time and hard work – yet it is so easily lost. Last year, we talked about brands
building a human face to connect emotionally with their customers ‐ but to pay off, consistency is key
• Transparency is an unstoppable force that inevitably results in occasional scandals and tomorrow’s shoppers will increasingly be concerned with the ‘behind‐the‐scenes’ activities of the businesses they trade with
• Every retailer has a CSR* strategy but few have put this at the heart of their culture and interactions with customers to
Sainsbury’s ‘Value with Values’ earns trust
underpin their difference and uniqueness
• Earning shoppers’ trust is a journey which requires long‐term commitment – short‐lived initiatives won’t deliver sustained benefits so you need a comprehensive, meaningful and Sainsbury s Value with Values earns trust
In 2012, Sainsbury’s launched its 20x20 plan with 20 pledges to achieve by 2020. The pledges focus on having a positive impact on the environment nutrition sourcing the
y p , gintegrated strategy which supports your commercial objectives
• There is no guarantee but over time, an ethical strategy can pay big dividends through shopper loyalty on the environment, nutrition, sourcing, the
community and its employees.
For its ‘ Best for food and health’ pledge, the retailer has already started to reduce saturated fat in its private label products
pay big dividends through shopper loyalty
• Sainsbury’s is one retailer which has merged ‘Value with Values’ and successfully communicated its philosophy to customers. In November 2013, Sainsbury‘s posted its 35th consecutive quarter of like for like sales growth The
© IGD 2014Source: IGD Research, *CSR = Corporate Social Responsibility, Sainsbury’s
p pand aims for at least a third of its promos to be on healthier products (e.g. Fruit & Veg).
consecutive quarter of like‐for‐like sales growth. The retailer’s strong values‐driven culture has certainly supported this success
Five key things to think about
1. Make sure your products are helping customers economise but at the same time maximise the sales potential of the category.
1
2. Develop unique in‐store, digital, retailer specific or product innovations that enable you to individually target shoppers.
2
3. Digital experimentation and adoption is rapidly increasing, work with retailers to create a seamless shopping experience online and offline.
3
4. Retailing outside of stores will put further pressure on format remodelling – look beyond your categories for new inspiration
4remodelling look beyond your categories for new inspiration.
5. If you want to cultivate shopper loyalty you need to demonstrate an 5
© IGD 2014
honest and transparent brand persona that leads the way.
Source: IGD Research
Who we are
• IGD is a not‐for‐profit organisation consisting of a team of experts, dedicated to the development of the food and grocery industry through promoting collaborative working practices.
• Our focus is on helping international retailers and suppliers understand shoppers retailing• Our focus is on helping international retailers and suppliers understand shoppers, retailing trends and supply chain best practice. Our core activities are focused on research and training.
• We engage with over 800 companies globally, including many of the world’s leading grocery retailers and manufacturers, including:
• Examples of our research can be accessed at our insight platforms:– Retail Analysis: www.retailanalysis.igd.com
S l Ch i A l i l h i l i i d
© IGD 2014
– Supply Chain Analysis: www.supplychainanalysis.igd.com
For more information about IGD, visit www.igd.com
Get in touch!
Stewart Samuel, Program Director, IGD Canadae: stewart.samuel@igd.com t: + 1 604 721 7064
www ra igd com
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Further information
Stewart SamuelTo find out if your company already
Program Director, IGD Canada
company already subscribes to Retail Analysis, or for complementary test
e: stewart.samuel@igd.com
t: 1 604 721 7064
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