What would happen to shopping patterns if a major e-retailer
like Google, Amazon, or Facebook grabbed a big role in food marketing and
distribution? It would surely change the options for the “every household, every
week” grocery shopper – and the competitive landscape for retailers. BMC Black Belt Mike
Spindler explores these scenarios in a provocative series of blogs at The
Branded Pantry. More than creative speculation, they offer grounded foresight
into how the digital march to dominate groceries will play out.
A recent WSJ Market Watch article provides a clear look at the
somewhat messy reality of digital coupon deals. Paper coupons remain a tried
& true source of savings, but shoppers and brands alike are juggling
multiple web and mobile coupon platforms as well. Retailers and brands may
extend one set of offers on paper, another through their website, and yet
another on mobile apps like Shopkick. Organizing all this on a mobile phone can
be more difficult than paper coupons.
The iFactor report published by the Intelligence Unit of The Economist is definitely worth a
read. It delivers a clear and well-documented picture of how shopper technology
use is driving retail innovation across Europe. The findings are based on a
survey of 300+ retailers in the UK, Italy, France and Russia, and in-depth
interviews with eight c-level executives. Retailers from
North America and other parts of the world can gain much from observing these efforts to respond to new shopper expectations.
More and more commuters are seeing Peapod’s new shopping
boards at their train or subway stops.
This is part of Ahold’s larger strategy to grow their digital business.
While the idea of using a smartphone to shop while waiting is no longer
new, Peapod’s large-scale execution certainly is - they're rolling out virtual shelves
in Chicago, NYC, Boston, New Jersey, and Philly transit stations. Preliminary
indications show that both downloads of the app and sales are increasing
appears to be working. Peapod’s expansion into new markets leads us to three
One of the influences limiting retail sales growth is
consumer spending on cell phone and data plans, as this WSJ article explains.
To make room for bigger “phone” bills, especially while incomes are flat or
declining, shoppers are having to make choices and shift spending. Cell plan providers expect
spending on their services will continue to increase as consumers get hooked on
speed, want new equipment, bigger plans, etc. "Speed entices more
usage," Verizon Chief Financial Officer Fran Shammo said at an investor
conference last week. "The more data they consume, the more they will have
The bleak title of the article about the 2012 Supermarket News Analyst Roundtable was “Grim Prognosis,” but there are some “silver lining” opportunities that are worth considering by any food retailer who is serious about growing their business. The analysts provided some pointers to areas where supermarkets may be able to grow. We call out six of them, and offer a couple of ways to approach each one.
On the go and want to order a deli sandwich, no waiting?
Publix is making that easy with an online ordering system
that adds another digital touchpoint for thier shoppers. Simply access the internet via a mobile device
or computer to select a sub, toppings, and even how thinly the
meat should be sliced; then specify a pickup time. The store emails a confirming order number.
All shoppers have to do is show up, collect the order, and pay. No waiting to order,
no waiting for prep, and shorter transaction times.
In The Hub Magazine’s current issue, Michael LeBeau
offers a useful build on the “path to purchase” for the Digital Age. He
argues that what happens after the sale is a "Third Moment" that deserves
as much attention as the preceding steps. This is when shoppers use a
product and share their experience, often via social media. LeBeau’s
insight reminds us that looking at shopper behavior in the largest
possible context is key to understanding what’s happening.
The 17th annual Supermarket News Analysts
Roundtable makes us thoughtful about the changes ahead. It was striking
to hear so many independent analysts deliver such uniformly sobering views of
the food industry’s challenges. They see an economy that’s squeezing middle class
so hard they are buying less. An economy that’s preventing Millennials from
jobs that allow them to start households. And, an economy that’s putting
on grocers themselves.
In London last month, I had a chance to catch up with Marc de Speville,
who watches retail in Europe for Redburn, Europe’s leading independent
equities broker. When he shared his observations about how food and
electronics retailers were responding to the multi-channel trend, I was
struck by how brick-and-mortar retailers who sell such different products were starting to focus on leveraging the inherent advantages they have
over pure online players. For grocers, de Speville sees an opportunity
to break out of a capital-intensive business model. In electronics, he
sees Europe’s largest retailer leveraging physical locations while
minimizing price differentials. With his permission, I’ve summarized
our pub talk below.
The inaugural report by the Eurasia and African Coca-Cola
Retailing Research Council (CCRRC) is out, and near the end, it surfaces an idea that
caught our attention: de-averaging. Most retailers are constrained by the need
to stock stores to meet the needs of the “average” shopper who lives in the
trade area. What if technology makes it possible to “de-average” the offer – to
target an offer so specifically that a retailer could serve a smaller,
well-defined set of shopper needs profitably and efficiently – and manage the
supply chain complexity required to do so. Will technology make
large-scale, hyper-local retail a reality? Interesting thought.
Digital fronts – in place of glass fronts – may soon make vending
machine purchasing feel more like regular shopping. We came across this WDM Group
interview with Dr. Michael L. Kasavana at FoodDigital. He’s a
NAMA-endowed professor at Michigan State University’s School of
Hospitality Business, and he highlights changes being tested by the
industry. We like how many are aimed at creating interaction with
shoppers - not just servicing a transaction.
To save 25% or more, three-quarters of respondents in a September
Valassis and RedPlum report said that they would be willing to sign up
for an email newsletter, two-thirds would “like” a Facebook page, and
17% would tweet or re-tweet a deal (up 5% from 2011). Shoppers are
willing to give something to get something but they don’t give it away
for “free.” For retailers, the challenge is to find the sweet spot
where it’s worth it for the customer, but it also serves the goals of
the business. The report also describes how smartphones
help shoppers save money, and some of those results might surprise you.
Using technology to create and deliver optimized product
assortments and shopping experiences – specifically, better forecasting and
customer analytics – is becoming common practice among retailers who are
outperforming their peers in year-over-year same-store sales. Eric Sherman summarizes new
research from RSR in Inc. magazine this month, where he writes: “This is an
interesting shift. In the past, forecasting systems were largely seen as supply
chain management tools, where the focus was on reducing operational costs. Now
such systems and techniques have become important to expand sales
opportunities, moving from a strictly bottom-line focus to a top-line one.”
BMC Black Belt Hakan Bengtsson
traveled from Sweden to Chicago recently, and we asked
him how Northern European retailers were dealing with the trend toward multi-channel retailing. In this interview, he answers our questions and then asks some of his own. Hakan works for Centigo, a leading
management consultancy based in Stockholm, where his specialty is advising
clients on how the convergence of the web and physical stores is