The success of Sprouts and other farmer’s market type stores
is a great example of disruptive innovation – at the same time, it illustrates
the vulnerability of disruptive innovation in today’s fast moving retail
Each year the management
consultancy Centigo AB produces, Centigo Retail Outlook, a major report on
seven new retailing trends they’re seeing across the world. The reports are always full of creative
insight and this year is no exception. Håkan Bengtsson, one of the report’s
authors, is also a BMC Black Belt. We talked with him recently about some of
the things they’ve learned during the work. Here’s a sample of what the team at
Centigo is seeing.
When enough people believe something, sometimes it doesn’t
matter if it’s true or not. Grocery customers now believe that their
supermarkets know enough about them to give them personal offers. Publix is
responding with a personalized offer program – and other food retailers
will need to think about following on. This is an increasingly common shopper expectation.
Aldi’s primary appeal to shoppers is low prices – 30% below the
supermarket – but that’s not the only reason they’re enjoying strong same store
sales growth in an otherwise flat market. Known originally as a limited
assortment store, Aldi has maintained most of those strengths while also
developing a more well-rounded shopper value proposition that’s proving hard to
beat, at least for now.
Putting the customer first is a winning strategy in today’s
intensely competitive market. Relay Foods and Whole Foods are ending a 5-year partnership in Virginia, and the positive and helpful way Relay has approached
helping its customers through the transition is worth learning from. Relay does six notable things in this email they sent to
customers in Charlottesville and Richmond.
Supermarkets need to find new ways to grow, but until now most of the
ideas haven't really taken off. First, it was Whole Health and meal
solutions - more recently in-store clinics looked like they had
potential. Kroger’s purchase of Vitacost.com shows where they are
placing their bets, i.e. in fast-growing categories such as healthy
living at a lower cost and new channels e.g. ecommerce.
Searching out new
visions for food retailing – and the business leaders who
champion them – is one of our passions. Lior Lavy is part of the team that launched
Artizone, the online marketplace that's connecting shoppers with a host of artisan food purveyors in parts of Dallas and
Chicago. We were impressed with their dedication to bringing customers quality, unique foods and by their
intense business focus. Lior seems like a person who will not be
denied. As you’ll see, Artizone
is already defining its unique role in the evolution of online food shopping.
The retail stats compiled in a recent Business Intelligence
report drive home the fact that “online retail is growing faster than offline
retail,” but closer interpretation is required if you want to really understand
what’s going on. For one thing, offline retailers probably have more
opportunity to capture business than the buzz suggests.
We know that it costs a lot more to acquire a customer than
to retain one and that customer turnover is a major expense for retailers. But are we putting enough resources and
thoughtfulness into customer retention? I was reminded of this challenge by a personal experience in
which a little more investment in customer retention could have resulted in a
big increase in the lifetime value of a customer.
“Is the human touch important in retail?” Of course it is. It can also be the key
driver for sustainable competitive advantage, as Susan O’Neill Gear suggests in her recent blog. To make the commitment (and reap the benefits), brick and
mortar retailers must answer two questions first.
It’s time to reconcile high tech and
high touch in food retailing. The two can complement each other better than
ever today. Bob Wheatley’s blog "Supermarkets: Do you know me, love me?" made me thoughtful
about just how far we’ve come in terms of how technology can help us better
understand and serve our customers.
Last week, a panel at FMIConnect presented highlights from the final
section of a major retail report on using the social web. Developed by
grocery industry leaders for use by the industry, the report covers the topic
in many dimensions. Michael
Sansolo, the research director for the project, talks
with us here about how the Coca-Cola Retailing Research Council approached the project, what they
learned from their latest research, and how they hope the complete
report will be used by retailers.
Walmart offered a vision of where food and grocery retailing
is headed at its annual meeting that includes smaller formats and increasing
ecommerce integration. Watching the largest retailer in the world test and try
out different strategies to address changing shopper needs and behaviors raises
some fascinating questions for the rest of us as we struggle to re-invent
NEW FEATURE!!! Audio insights from Bill Bishop. CLICK HEREto hear what Walmart's experiments mean for other grocery retailers.
Online grocery has to be economic to work, but real success depends
on delivering a superior shopping (user) experience. This is where the phrase “retail is detail” goes virtual, and
Relay Food’s new website is a great example. Their commitment to a unique
shopping experience is clear in a recent letter to users.
Tesco’s successful use of search engine optimization (SEO) has
the company dominating food and grocery search results in the UK, making them the
most visible grocery retailer in the digital space. Econsultancy took a look at
why in a report that contains some interesting insights.