Social media is a powerful way to engage shoppers, and we
were recently reminded of how much fun and effective a flash mob in a grocery
store can be by these two videos. Watch the shoppers pull out their smartphones to capture the moment,
and then, of course, they spread the word just like we’re doing now.
Most CPG companies understand that the digital future will
be very different, but how to prepare for it is less clear. The changes taking
place today are undermining the big box retail model, so maintaining the status
quo is anything but a growth strategy.
Customers increasingly go online for information and
services, so retailers can use the web to give their customers “more of what
they’re looking for” – but it has to be delivered in a way that’s easy to
access and use. That’s why we like Relay Foods’ expanded nutrition label.
player enters the delivery derby: The start-up Swapbox is deploying a network
of self-service lockers in San Francisco for shoppers who want to receive
online orders away from home. Amazon already has customer-pickup lockers in
some 7-Eleven Stores, and UPS is testing its own network of storage
a long time retail loyalty programs just gave customers with a card the
“loyalty” price and the ability to qualify for certain member-only promotions.
Some now include targeted offers and points programs, but most stick to the old
model. The question is: Do mass market loyalty programs work? The evidence
suggests, “not as well as you may think.”
get most of the attention when we talk about mobile, but mobile-optimized
retail websites are also important. While apps frequently offer shoppers a completely
new experience, shopper expectations for mobile websites are conditioned by
their experience with the desktop version. This creates both
opportunities and challenges.
The recent New York Times article on delivery confirms that it's the toughest problem to solve as more food and
consumable buying shifts online. To date, startups and new entries into delivery are still generating more
smoke than fire.
hard separate cause and effect, but RSR’s new report, Omni-Channel 2014: Double
Trouble, does a nice job of comparing the winners' thinking and actions to the
laggards' when it comes to how retailers are looking at their move into
transitioning to omnichannel, one challenge retailers face is finding a way to
let go of activities that are no longer important to their customers/shoppers
and to increase investment in things that will drive sales growth. Holistic margin management may be a way forward.
The list of ten online grocery shopping services recently published by
Mashable sparked several thoughts for us about differentiation, segmentation, economies of scale and what to expect in the future.
“sharing economy” is not a fad according to research studies, and in fact it’s
becoming a larger part of the way many people around the world buy and access
goods and services. Nielsen recently found that more than half of those
surveyed in the US were “willing to share or rent personal assets for financial
gain” and more than 40% would be willing to lease goods and services.
We talk a lot about using digital to
improve the in-store experience, but little work has been done to define the
details or measure its impact on shopping and sales. Now there’s a research report
on AT&T’s new digital store installation that assesses the customer
experience and its impact on the store.
It’s hard for most of us to imagine how rapidly retailing
can change, but in Shanghai, Tony Zhang saw a big opportunity that others did
not – and then he drove changes that transformed organic vegetables into
luxury products in China. What he did holds lessons for others driving innovation in retailing.
What happens to ecommerce shipping cartons after they’ve
done their job? Some shoppers are looking for value beyond just price and
assortment when choosing where to buy online, and to them, the impact of the
packaging may be important. These other “sources of value” (beyond price and
assortment) are likely to become increasingly important in appealing to
different customer segments as online competition increases.
Shoppers are growing more aggressive about converting their
web-enabled price-gathering powers into tangible benefits. Did you hear about Clark
Howard’s Walmart/Lego adventure in Atlanta? Situations like this are creating a stress test for retailer
A lot of the initial digital “innovation” in food marketing
and distribution focused on applying technology to the usual suspects. So
digital circulars, coupons, and shopping lists replace paper ones, and shoppers
may place online orders but often still One.Item.At.A.Time. Here’s someone
who’s thinking about needs and opportunities in a much bigger way.
Since the dawn of ecommerce, retailing pundits have been
asking, “Are brick and mortar stores still relevant?” Now we have answers. A.T.
Kearney’s new report quantifies shoppers’ channel preferences for each step of
the journey: discovery, trial, purchase, pickup and return -- and there’s good
news in the data for physical stores.
news story about Walmart's new US division chief featured the giant big-box
retailer's strategic emphasis on small-footprint stores and ecommerce
integration. Performance in the US has been sluggish for the past 5 or 6
quarters, and these store formats are all about figuring out how to drive
growth by meeting the emerging needs of consumers.
Restaurant carryout is the main “home meal replacement” today,
but there’s a new online competitor for this potentially profitable market:
meal kit companies like Blue Apron and Plated, which are essentially kitchens
that blend data and ingredients to produce a service efficiently.
Generating growth in today’s flat economy is one of the problems
that keep retailers up at night these days. Taking share from the competition is always expensive and frequently unprofitable, so where
else can they turn? Consider disruptive innovation. Here’s one example.
When management takes responsibility for the future of the
business the way Bill Marriott does, it’s worth a serious look. The Chairman of
the $19 billion dollar hotel management company is making bold moves to ensure
his business is ready for its next wave of customers – 60% of whom will be
Millennials in just four years.
Now we’re face-to-face with the question, “How do shoppers
decide whether or not to buy food and groceries online and have them delivered
to home?” Eventually, the answer will be obscured by habit, but for now it
generates a lot of insight into who will win in this emerging market and why.
Sometimes you need to look into the distance to bring into
focus what’s going on around you. This is especially true today for retailers who must think about what
could happen if Amazon and Google succeed even modestly in their future retail ambitions.
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
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.
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.
An approach called “total retail” is overtaking
omnichannel as the high-water mark for successful retailers. Whereas the last big
upheaval required retailers to multiply the number of channels where they made
themselves available, the next one looks like it will require them to “rebalance
that store portfolio” with the customer at the center of the picture, and
include their physical stores in the innovation mix. One reason this is going to be so important is that the
average shopper now wants to limit the number of retail brands they interact with,
The Savings Catcher program that Walmart rolls out nationally this
summer gives the retailer a way to create a new digital CRM program without involving
a card and discounts. For us, the really big idea is that Walmart leveraged all
the new price transparency data into a value added service for their customer.
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.
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.
New digital touchpoints like iBeacon dramatically increase
the opportunities for retailers and brands to communicate with and better serve
customers and consumers. But, they also raise a key the question: What are
shoppers really looking for –
promotions and savings or better customer service? There’s a good chance that some of the
connections will be wasted if they aren’t used to deliver customer services as well.
The Poncho app, now in pilot with Duane Reed, caught
our eye because it nails the requirements for effective shopper communication. Shoppers
want information that’s personalized and relevant – timely, interesting and
useful for the task at hand. Messages that don’t meet these criteria
won’t have much impact and risk being irritating.
Working with retailers, brands play an important role in
driving the sales of their products, so it’s a concern that only a handful have
taken the steps needed to extend that influence to mobile. This gap needs attention.