Smaller stores, fewer discounts, more service and robots, those are just a few changes we may see appear in supermarkets in the next few years. How should retailers and manufacturers react?
How will consumers buy food in the future? Online or in stores? In larger or smaller stores? Will they buy to take home or consume right on the spot? These and several other questions were the foundation for IGD and The Consumer Goods Forum’s incredibly interesting study regarding the physical food store’s future. We have taken seven tantalizing statements from the study for your reading pleasure:
The physical store will survive
Despite eCommerce’s surge, shoppers will continue to visit stores for a wide variety of reasons: additional shopping, last-minute shopping or just because they like to shop. Customers love to see, smell and touch products and there is the immediate satisfaction when you can pick up something. Retailers need to focus plenty of attention on emotional elements and need to create a unique experience.
Supermarkets have regained their social role
More than ever, retailers will put the shopper first and tap into the individual local needs thanks to a thorough data analysis. Demographic evolutions can help bring a store’s social role to the limelight once more: help older shoppers, play a role in the local community, offer advice and information…
IGD predicts that retailers will offer fewer discounts and also lower their frequency. Their impact has lowered already, because of a higher price transparency online and the surge of (online) subscription models. A lower, stable price level will gain in importance: British research points out that 63 % of shoppers prefer an “everyday low price” policy. Fewer discounts also creates more supply chain efficiency.
Retailers’ main distinguishing feature will be their services. If shoppers do their bulk purchases online, they will have more time to spend in stores to satisfy their appetite in other product categories. Employees will inspire and inform customers. IGD also sees a future for events that take into account local traditions and tap into the local shoppers’ values and habits.
Fewer and smaller stores
Retailers will not as many stores and those will not need to be so large, considering the online world’s increased importance. Therefore, stores will not need as much storage as before. An omnichannel strategy requires more higher investments in a range of channels, which leaves smaller funds for real estate. It does not make business sense to keep onerous stores open, but retailers will remodel their existing store network.
Opportunities for specialists
IGD expects fewer global retailers to remain, but that those that specialize will have more opportunities. Major retailers need to focus more on costs and profitability, which may lead them to pull out of every market where they are not the leading company. Locally, competition can thrive with the arrival of niche players and specialists that cater to specific needs. Consumers will have more to choose from and suppliers will have to deal with a splintered market.
Robots will take over
Robots, automation and artificial intelligence will all help supermarkets to become more efficient. It will be important to find the balance between automation and human interaction. Robots may be better and more efficient at routine tasks, leaving employees to focus on customer service and interaction.
The report has several recommendations for retailers and their suppliers, shown in this fun infographic. Invest in order to better understand the shopper, create more flexible store formulas and continuously-evolving product ranges.
From a customer’s point of view: take away every obstacle and every possible point of friction and offer a seamless shopping experience. Get rid of the entire checkout system for instance. Maybe we will get those cash register-free stores?