Insight | Convenience
Misunderstood: Convenience and shopping
Convenience is an interesting word. The mental leap everyone makes is that convenience is about time. That it’s about the fastest shopping experience. If that were true, 7-Eleven would be the world’s strongest retail brand. So, what’s missing from that equation? Everyone thinks that people spend two things on a shopping trip: money and time. Our research says they spend three things: money, time, and energy. Convenience, defined by the ability to do it now, will increasingly be table stakes. “Now” is not the issue. We can get things done “now.” The issue is how much energy it takes. The problem Amazon has solved is not about money or time. It’s about energy. Consider the two-income household with a mother, in her forties, who had children later in life. It’s 9:30 at night. She’s worked all day and just put the kids to bed. She may zone out on the couch in front of the TV, but knows she needs to do the family shopping. Taking out her smartphone, she grocery shops on Amazon. In creating this low-energy, friction-free shopping experience, Amazon solved the energy crisis. And it raised the bar for retailers. In a world of Amazon and Alibaba, retailers cannot create friction and succeed.
Chief Knowledge Officer
Kantar, Consulting Division
Insight | Discounters
Disruption improved competition
The twin challenges for grocery retailing continue to be the rise of online and, more fundamentally, the rise of discounters. They have an impact in many markets. In the UK, for example, they disrupted higher-margin competitors and tripled their market share in the last 10 years. The response of retailers has been to get a lot sharper on price. The discounters also changed the notion that you either had cheap or you had quality. Discounters have been able to offer low price and high quality. And it has resulted in higher quality, better merchandised, own-branded products from other grocery retailers. Retailer own-label allows the grocery chains to express more of their individual personality.
Head of Retail and Consumer Insight
Insight | Efficiency
Efficiency remains key to satisfaction
Efficiency remains very important. Even though Aldi and Lidl are nimble and run much slimmer ranges, they’ve got consistency both in layout and design across their stores and are merchandised in a way that makes things efficient for shoppers and staff alike. Regardless of how much floor space a store has, it’s important not to confuse customers or make their shopping experience laborious. We’re increasingly busier, time-poor people, and the concept of hypermarkets and big stores have fallen out of favor, compared with smaller stores that are more time-efficient and offer a better experience. We love shopping, but how many people want to spend multiple hours in a supermarket, over more enjoyable social activities?
Strategic Insight Director
Insight | Experience
Retailer brands connect quality and affordability
Own-label brands indicate a larger trend among retailers who decided to make something that was both affordable and beautiful. They’re saying it will feel like luxury. We’ve gotten rid of the middleman, and we’re going to send this product directly to you, with this brand experience that you’ll fall in love with. The Tesco’s of the world are trying to use design to say that the products may be cheap, but they’re good. Brands like Warby Parker and The Ordinary are saying you don’t need to choose anymore between cheap and luxury. IKEA makes a related point. IKEA has always been a democratic brand. Regardless of income level you could have access to furniture and we will actually guide you and give you a related experience. With its design store, IKEA is extending is creating a democratic access point. Design consultation is now for the many, not just the wealthy few.
Insight | Sourcing
Retailers race to win global sourcing crown
Digital retailers grab attention for their innovative approach to promotions, be that Alibaba’s Singles’ Day or Amazon Prime’s incentives. These activities conceal the upheaval sweeping across global sourcing where smart manufacturing connected to consumer demand will determine winners and losers. This upheaval can be seen by looking at the failed merger of UK supermarkets Asda and Sainsbury. This merger had a global dimension harking back to Walmart, which purchased Asda over two decades ago. Walmart has been trying to make a big play to revolutionize global sourcing and logistics in an era where speedy order and delivery models are gaining consumers and investors. A global race is developing between Walmart, the world’s largest global sourcing specialist, and newcomers, including Amazon and Alibaba. Had the Sainsbury’s merger been approved by authorities, Walmart would have gained some advantage in connecting local consumers to global sourcing in this revolution. The takeaway? We’re now in a global race where giants are revolutionizing their capabilities on sourcing products from anywhere and then being as efficient as possible in getting those products to consumers everywhere.
SVP Retail Insights, EMEA
Kantar, Consulting Division
Insight | Direct-to-Consumer
New Retail data attracts old suppliers
Amid the disruptive trends impacting the retail category, we’re also seeing manufacturers trying to become retailers themselves. One example is Coca-Cola buying Costa, the UK chain of coffee shops; another is Pepsi buying SodaStream. Of course, Pepsi owning a devise for making carbonated beverages at home cuts back on packaging and advances sustainability. But these acquisitions also relate to New Retail and the need to own the end-to-end experience and have data on the customers and sell them stuff directly. And they are part of a shift from transactional value to customer lifetime value.
Insight | Curating
Retailers must help consumers to be their best
Brand equity is not what it used to be, both in terms of what contributes to equity and what equity contributes to consumer choice. It continues to be important, but the historic positive impacts of brand on consumer choice—quality, consistency, ubiquity—now share importance with a slew of new attributes. People are seeking out the new, novel, interesting—thus the rise of unknown brands that suddenly go viral and the multitudes of others that do not. Retailers that want to matter today need to embrace this change and return to their curating roots. They’ve got to give their customers a sense of discovery every time they shop with them and help facilitate the customer’s ability to feel and show off that they’re in the know. Brands have to help customers not only live their best lives, but also to help them signal it on Instagram.
Kantar, Consulting Division