Retail is becoming about providing shoppers with friction-less, channel-less experiences, with the emphasis on experience. This requires retailers to invest in multiple touchpoints to win and retain custom. With growth more elusive, the fight for share will be won by those best able to provide goods and services that are personalised, contextualised, and curated, in the fastest and most convenient way.
Fight for share
To steal share, innovation and store reinvention will be a priority. Making the store fit for the digital age means blending mobile and store technology, ensuring the final mile is sustainable and scalable through eCommerce collection models, and introducing new store concepts that focus on solving multiple missions and occasions. Retailers should invest in technologies that ensure store associates are on a level pegging with the digitally savvy, mobile equipped customer entering the store. As retailers digitally enable their stores, a greater understanding of how long consumers will engage with products when shopping will emerge. This is likely to result in curated ranges, and brands creating dedicated areas to excite and entice. Carrefour, Auchan, Sainsbury’s, and Tesco are all looking to reinvent their formats to not only cater for the digital shopper, but focus on providing greater experiences.
Search for growth
Given consumers growing desire for simplicity and convenience, growth will come from eCommerce and proximity retail. Along with Amazon’s Prime Now, services such as UberEats and Deliveroo have completely changed shoppers’ perception of speed and convenience. This has resulted in the convenience format being reinvented. Stores are increasingly catering for specific missions, with highly tailored assortment, meal solutions and food-to-go offerings. Both Aldi and Lidl are flexing their formats to cater not just for convenience retail, but also for eCommerce. Carrefour will continue to build their “channel-less” credentials by leveraging mobile to blend the physical and digital and developing fast, convenient fulfilment solutions that are sustainable. The need to understand the shopper is becoming more important, leading to greater focus on data analytics. Data sharing amongst all parties and collaboration in understanding how to act on it to deliver the personalised, contextualised experiences shoppers expect will define those managing to win share. Those willing to collaborate in creating specific brand or mission focused areas within stores, while ensuring items stocked are highly curated and appropriately ranged will outperform.
Focus on margin
To avoid being left behind and disappointing shoppers, retailers will need to continue investing in new technology and innovation. However, with margins under pressure and generating cash taking precedence, short-term ROI will have a greater emphasis. This means retailers will be more mindful of which new technologies and innovations to invest in and will make more of an effort to understand what technology will work best for customers and where it needs to be placed. While it has been a long time coming, a one-size-fits-all approach to shopping will no longer be relevant.
The most successful European retailers will partner with suppliers to evolve their formats, assortments, and messages in ways that speak directly to the targeted shopper segments that are most aligned to their value propositions and brands.
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