Bigger Picture France
Retail outlook: E-commerce and direct-to-consumer growing
According to Kantar in 2018, 96 percent of FMCG growth took place outside hypermarkets and supermarkets, and e-commerce is growing 10 times faster than all other channels combined. Nowhere is this truer than in France. The big-format hypermarkets—like Carrefour and Auchan, which were once dominant in France—are being challenged to maintain their influence. Several hypermarkets are responding to this by reinventing themselves—initiatives include testing different store formats and atmospheres, adding restaurant and out-of-home offerings, or competing more aggressively on price. They are also starting to partner with tech giants such as Google to create omnichannel experiences.
E-commerce is rising. It currently represents 5.6 percent of FMCG shopping. The growth of online grocery shopping also invites new players. Amazon, while still a relatively small player in Europe, is growing fast (+22 percent in 2018). Its share of the French online market is 5 percent, but its share of wallet is much higher at 16.7 percent. “This showcases Amazon’s great potential for growth—its shoppers are very loyal, spending far more on each trip than the average for this channel,” Kantar warned recently.
Direct-to-consumer and online shopping, as in other markets, looks set to grow. Currently just 9 percent of French consumers shop direct-to-consumer.
French consumers: Healthy, organic, regionally focused, adopting global health trends
French consumers are buying into ethical, organic and sustainable goods, according to Kantar studies. In response, leading BrandZ France top supermarket brands have been investing in initiatives to support French producers in organic and sustainable farming techniques. In 2018, Kantar surveyed shoppers in France and found that the majority claim to make more conscientious purchasing decisions today—purchasing less to prevent wastage. Similar numbers want to purchase environmentally friendly or locally sourced products as often as possible.
French consumers are also looking at reducing their alcohol, meat and sugar consumption, and they are starting to adopt more global food habits. According to Kantar Worldpanel’s “Eat, Drink & Be Healthy: How at-home consumption is changing,” report, unveiled in 2019, France has seen 0.8 percent growth in snacking. Plant-based health drinks such as coconut water are on the rise (this category grew 8 percent). That said, France also still ranks high in terms of relative meat consumption; 44 percent of lunches and dinners in France in 2019 still contain meat as the primary protein.
Global tech giants move in, but face challenges:
Global tech giants such as Netflix, Amazon, Apple and Facebook are infiltrating more aspects of the French consumer experience. But this expansion is not without challenges. European networks and entertainment companies are coming up with innovative new deals of their own. Retailers such as Carrefour are partnering with Google to modernize their stores. And France is also weighing in with hefty regulations, antitrust measures and taxes for the tech giants hoping to expand in French territory. In 2019, Google reached a $1 billion settlement with the French finance ministry, for tax evasion. In 2019, French lawmakers also approved a measure attempting to force tech giants Google and Facebook to remove hate speech faster, or else face substantial fines. Chinese tech giants, however, are making headway. France hit the headlines in 2019 for allowing Huawei to bid to offer 5G access.
Next : France’s 5G wave, Smart Cities, and more:
France’s telecoms regulator has officially launched the process to allocate operator frequencies for next-generation 5G mobile telephone networks; other networks, tech companies, and media companies are preparing for a connected French future from 2020 onwards. All the major French companies on BrandZ’s top 50 ranking have ambitious 5G plans in place.
At the Orange Business Summit in 2019, Stéphane Richard, Orange Group’s Chairman & CEO, presented Orange’s ambitions for 5G. “5G will not be just another new development in mobile uses. This is a technological leap that announces a significant transformation of business models for all companies and in all sectors of activity. To take advantage of the opportunities available, companies must anticipate their application cases without delay, and we, operators, must be fully mobilized to support them and develop solutions that meet their needs,” he said, calling for collaboration between companies. “The story of 5G has to be written together. More broadly, we must make every effort to make France one of the leading countries in the development of 5G. This future network is an opportunity to unite and consolidate all our resources, our know-how, our advanced industries, our French tech and our talents at the service of our country.”
Top 5 learnings for marketers
1. A healthy brand is a valuable brand
The strongest brands in the French ranking over the past year perform better than other brands on the BrandZ measure of health. This metric takes into account how well a brand performs in five key areas: Purpose, Innovation, Communication, Experience and Love. Strength in any one of these areas is an advantage for a brand, but the strongest brands perform well on all of them and create a multiplier effect.
2. Consider experiences and innovation
These are becoming inextricably linked to brand equity, emotional resonance and differentiation—and value growth. It’s no accident that France’s BrandZ Top 50 highest ranks share an emphasis on building compelling experiences in store, or as activations and communication platforms. Being seen to be innovative and future-facing is becoming a key differentiator.
3. Luxury and premium are French strengths
Luxury and premium remain France’s greatest exports and provide fuel for the economy irrespective of domestic economic challenges. French brands are distinctive, authoritative, and internationally recognized. They now have an opportunity to also embrace purpose and social good for continued brand strength. Many are trying already: LVMH and L’Oréal have introduced sustainable and ethical initiatives.
4. The importance of purpose
Purpose remains important to consumers, but is also expanding and becoming wider-ranging in its meaning. “Purpose is about making life better for people. While this can include a social/environmental dimension, it’s not necessary; it could simply be making life easier for the consumer/user, or fulfilling the category needs better,” says Staplehurst. “But there is an opportunity in CSR, environmental activity, and ethical transparency to be promoted within a brand’s core purpose.” Successful BrandZ Top 50 Most Valuable French Brands are baking this into their communication and positioning.
5. Embrace the future
BrandZ France’s top winning brands are embracing disruption, new technologies, and changing cultural trends and are using them to forge new collaborations, campaigns and initiatives. And in so doing, they are remaining relevant and popular. New technologies such as 5G, already becoming a major focus in France, will also offer brands and marketers a plethora of new opportunities.