International Retail Trends Ccgd West 2010

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International Retail Trends Ccgd West 2010

  1. 1. 5 big international retail trends and how Canadian retailers and suppliers can get on the winning edge. presented by
  2. 2. About SINS Helping our clients sell more - more profitably Training & Development: Account Management, Trade Marketing, Retail Marketing Sales Leadership Strategy Consulting: Go-To Market Strategy Structure and Development Industry Knowledge & Expertise: Canadian CPG Industry International Retail SINS www.salesisnotsimple.com
  3. 3. today’s game plan the 5 big international trends what you can do to leverage them? - retailer and supplier perspectives Q&A / Discussion SINS www.salesisnotsimple.com
  4. 4. 5 big international retail trends. SINS www.salesisnotsimple.com
  5. 5. #1 getting bigger + going global SINS www.salesisnotsimple.com
  6. 6. the world’s ten biggest retailers... 1 6 2 7 3 8 4 9 5 10 Source: 2010 Global Powers of Retailing - Deloitte SINS www.salesisnotsimple.com
  7. 7. just how big the biggest are... Retail Sales Retail Sales Company Country # of Countries Rank 2008 (Millions $USD) 1 Wal-Mart Stores Inc. US 401,244 15 2 Carrefour SA France 127,958 36 3 Metro AG Germany 99,004 32 4 Tesco PLC UK 96,210 13 5 Schwarz Group (Lidl) Germany 79,924 24 6 The Kroger Co. US 76,000 1 7 The Home Depot US 71,288 7 8 Costco Wholesale US 70,977 8 9 Aldi GmbH Germany 66,063 18 10 Target Corp. US 62,884 1 Source: 2010 Global Powers of Retailing - Deloitte SINS www.salesisnotsimple.com
  8. 8. Total Turnover (billions) of Top Ten Retailers Number of Countries 155 1,152 96 576 +100% +62% 2000 2008 2000 2008 The Biggest Retailers are Getting Bigger Through Globalization & Consolidation Sources: 2002 Global Powers of Retailing - Deloitte 2010 Global Powers of Retailing - Deloitte SINS www.salesisnotsimple.com
  9. 9. Canada’s ten biggest retailers... 1 6 2 7 3 8 4 9 5 10 Source: 2010 Global Powers of Retailing - Deloitte SINS www.salesisnotsimple.com
  10. 10. just how big the big canadian retailers are... Retail Sales Company Retail Sales (Millions $USD) Global Rank Rank 2008 1 Loblaw Companies 22,208 37 2 Alimentation Couche Tard 15,781 50 3 Empire Company Ltd. 13,305 67 4 Metro Inc. 10,644 81 5 Shoppers Drug Mart 8,896 102 6 Canadian Tire Corp. 7,837 112 7 Hudson's Bay Trading Co.** 7,591 118 8 Katz Group Inc. 6,278 137 9 Jim Pattison Group 3,720 207 10 RONA Inc. 3,533 230 ** American owned Source: 2010 Global Powers of Retailing - Deloitte SINS www.salesisnotsimple.com
  11. 11. just how big the big canadian retailers are... Retail Sales Company Retail Sales (Millions $USD) Global Rank Rank 2008 1 Loblaw Companies 22,208 37 2 Alimentation Couche Tard 15,781 50 3 Empire Company Ltd. 13,305 67 4 Metro Inc. 10,644 81 5 Shoppers Drug Mart 8,896 102 6 Canadian Tire Corp. 7,837 112 7 Hudson's Bay Trading Co.** 7,591 118 8 Canada Safeway 6,400 9 Katz Group Inc. 6,278 137 10 Jim Pattison Group 3,720 207 11 RONA Inc. 3,533 230 ** American owned Source: 2010 Global Powers of Retailing - Deloitte SINS www.salesisnotsimple.com
  12. 12. 500000 375000 250000 125000 0 Wal-Mart Carrefour Canada Top 10 Metro Tesco Lidl Sources: 2010 Global Powers of Retailing - Deloitte SINS www.salesisnotsimple.com
  13. 13. GDP 2008 Rank Country Top 10 Retailers Millions USD 1 United States 14,441,425 7 2 Japan 4,910,692 5 3 China 4,327,448 5 4 Germany 3,673,105 3 5 France 2,866,951 4 6 United Kingdom 2,680,000 6 7 Italy 2,313,893 3 8 Russia 1,676,586 2 9 Spain 1,601,964 4 10 Brazil 1,572,839 2 11 Canada 1,499,551 3 Sources: International Monetary Fund 2010 Global Powers of Retailing - Deloitte SINS www.salesisnotsimple.com
  14. 14. GDP 2008 Rank Country Top 10 Retailers Millions USD 11 Canada 1,499,551 3 12 India 1,206,684 2 13 Mexico 1,088,128 3 14 Australia 1,013,461 2 15 South Korea 929,124 2 16 Netherlands 876,970 3 17 Turkey 729,983 3 18 Poland 527,866 4 19 Indonesia 511,765 1 20 Belgium 506,183 4 Sources: International Monetary Fund 2010 Global Powers of Retailing - Deloitte SINS www.salesisnotsimple.com
  15. 15. how to get on the winning-edge... Retailers: ✓benchmark yourselves against winning international formats. ✓attend more international conferences to expand your horizon. Suppliers: ✓develop contacts with your colleagues around the world to bring international best practices to your customer locally. Together: ✓subscribe to several on-line news services to stay in touch with global developments in retailing. SINS www.salesisnotsimple.com
  16. 16. #2 building great brands SINS www.salesisnotsimple.com
  17. 17. #2 building great brands when it comes to brands, retailers are shifting from the “distributor” to the “builder”. pillars of great retail brand-building 1 value-added private labels 2 extension of brands in related services 3 variety of store formats strong retail brands are the passport to 4 corporate citizenship global growth SINS www.salesisnotsimple.com
  18. 18. #2 building great brands examples of value-added private label brands at tesco SINS www.salesisnotsimple.com
  19. 19. #2 building great brands extending the brand into retail services at tesco SINS www.salesisnotsimple.com
  20. 20. #2 building great brands offering a variety of store formats at tesco SINS www.salesisnotsimple.com
  21. 21. #2 building great brands a new british (branded) invasion at fresh & easy SINS www.salesisnotsimple.com
  22. 22. #2 building great brands corporate citizenship as a branding vehicle at tesco SINS www.salesisnotsimple.com
  23. 23. #2 building great brands how to get on the winning-edge... Retailers: ✓ evaluate the consistency of your brand image to the individual shopper. ✓ increase efforts to take your brand “beyond the store”. Suppliers: ✓ focus on true innovation to drive growth while avoiding SKU sprawl. ✓ connect your marketing teams with those inside the retailer. Together: ✓ identify category or cross-category opportunities that are able to build equity for both the retailer and supplier brands. SINS www.salesisnotsimple.com
  24. 24. #3 understanding the individual shopper SINS www.salesisnotsimple.com
  25. 25. #3 understanding the individual shopper retailers are gearing up for customer relationship management 2.0 in a push to understand shopper behavior SINS www.salesisnotsimple.com
  26. 26. #3 understanding the individual shopper average customers don’t exist. success lies in knowing individuals. - Dunnhumby tesco club card: launched in 1995 quick facts: 10+ million active households in the UK. segments consumers on behaviour + value multidimensional segmentation each individual shopper products assigned scores and attractiveness ratings for each shopper segment. shopper-profile-tailored communication and promotions coupon redemption rates of 20-40%. SINS www.salesisnotsimple.com
  27. 27. #3 understanding the individual shopper tesco shopper segmentation Lifestage Profitability Store Format Promotional Promiscuity Shopping Lifestyle Habits Brand Advocacy SINS www.salesisnotsimple.com
  28. 28. #3 understanding the individual shopper the receipt: merely data April 12, 2008 at 21h30 Customer 664433 purchased in store 115 (Express) 1 item 102387 - microwave ready meal, Spicy Mexican flavour, Priced at £2.99 1 item 114576 - White Wine, Chablis, priced at £5.99 2 x item 329800 - prepacked salad, priced at £0.99 (promotion) SINS www.salesisnotsimple.com
  29. 29. #3 understanding the individual shopper the card (model) reveals: true insight Mrs Smith is a young adult and one of our Premium shoppers. She uses Watford Hypermarket for major monthly shops. She uses Covent Garden Metro for daily requirements. She often shops late in the evening and buys upmarket products. She is particularly loyal to her cat food brand and fine fabric washing powder. She buys Hello magazine and sometimes Country Life. She is happy to be contacted for research. Promotions are important to her, but not Value lines. SINS www.salesisnotsimple.com
  30. 30. #3 understanding the individual shopper #664433 SINS www.salesisnotsimple.com
  31. 31. #3 understanding the individual shopper SINS www.salesisnotsimple.com
  32. 32. #3 understanding the individual shopper tailored promotion based on life-stage SINS www.salesisnotsimple.com
  33. 33. #3 understanding the individual shopper Dunnhumby & Metro partnership Source: Globe and Mail - Nov 19, 2009 SINS www.salesisnotsimple.com
  34. 34. #3 understanding the individual shopper how to get on the winning-edge... Retailers: ✓ think beyond points and discounts. ✓ use your CRM tool as a basket builder instead of a trade fund generator. Suppliers: ✓ bring consumer insights to the table that builds on shopper understanding. ✓ develop “shopper marketing” capabilities within the organization. Together: ✓ identify the overlaps between the key shopper segments in the store and the target consumer of the brand and intensify shopper marketing efforts. SINS www.salesisnotsimple.com
  35. 35. #4 being conscious of their footprint SINS www.salesisnotsimple.com
  36. 36. #4 being conscious of their footprint going “green” has not gone away because we are dealing with the downturn Consumer Goods Forum “top of mind” survey 2009 Source: Consumer Good Forum Press Release: Feb 2, 2009
  37. 37. #4 being conscious of their footprint examples of green prioritization at tesco
  38. 38. #4 being conscious of their footprint examples of green prioritization at walmart concentrated laundry detergent mandated move to concentrated formulas savings: 100 million gallons of water 95 million pounds of plastic resin 125 million pounds of cardboard. extended paper roll life co-development (P&G) of toilet paper and paper towel products with more sheets per roll. savings: 89.5 million cardboard cores 360,000 pounds of plastic 54,000 gallons of diesel. SINS www.salesisnotsimple.com
  39. 39. #4 being conscious of their footprint everyone’s keeping an eye on walmart... Source: Wall Street Journal - Jan. 18, 2010 SINS www.salesisnotsimple.com
  40. 40. #4 being conscious of their footprint two great Canadian examples... SINS www.salesisnotsimple.com
  41. 41. #4 being conscious of their footprint how to get on the winning-edge... Retailers: ✓ engage shoppers beyond reusable shopping bags ✓ showcase your efforts and successes in an easily accessible way Suppliers: ✓ read your organization’s “CSR” report and understand it’s impact locally. ✓ find areas of common interest between your company and your customer. Together: ✓ develop common CSR goals as part of the business planning process and scorecard your results with the various stakeholders. SINS www.salesisnotsimple.com
  42. 42. #5 efficiency spawns a new format SINS www.salesisnotsimple.com
  43. 43. #5 efficiency spawns a new format Total Turnover of Aldi / Lidl the “hard discount” format has already taken Europe by storm. 102,522 major players: founded: germany 1940’s 8,200 stores 50,100 52,422 29,082 17,782 11,300 founded: germany 1930’s 7,000 european stores 2000 2008 Aldi Lidl Total Source: 2002 Global Powers of Retailing - Deloitte 2008 Global Powers of Retailing - Deloitte SINS www.salesisnotsimple.com
  44. 44. #5 efficiency spawns a new format hard discount stores examination success factors for hard discount 1 limited assortment (approx. 1500 SKUs) 2 high penetration of private label 3 small, consistent store format (approx. 15,000 sq. ft.) 4 shelf-ready packaging 5 display-ready pallets 6 store-warehouse clustering 7 no in-store deli or bakery SINS www.salesisnotsimple.com
  45. 45. #5 efficiency spawns a new format hard discount stores LIDL SINS www.salesisnotsimple.com
  46. 46. #5 efficiency spawns a new format hard discount stores ALDI SINS www.salesisnotsimple.com
  47. 47. #5 efficiency spawns a new format ALDI is already at our border... USA Aldi Sud launched in the US in 1976. Over 1000 stores in 30 states. expanded store count during economic downturn Also owns “Trader Joes” with over 300 stores SINS www.salesisnotsimple.com
  48. 48. #5 efficiency spawns a new format how to get on the winning-edge... Retailers: ✓ have a contingency plan in place to deal with a rapid Hard Discount launch. ✓ focus on brands and value added promotions. Suppliers: ✓ consider developing an unique product offer for Hard Discount. ✓ link with your international colleagues to learn from their experience. Together: ✓continue to push inefficiencies out of the supply chain in order to make the Canadian industry less attractive to potential competitors. SINS www.salesisnotsimple.com
  49. 49. Q: what were all those trends again...? A: the 5 big international trends are... #1 getting bigger + going global #2 building great brands #3 understanding the individual shopper #4 being conscious of their footprint #5 efficiency spawns a new format SINS www.salesisnotsimple.com
  50. 50. hot some reading recommendations from sins SINS www.salesisnotsimple.com
  51. 51. SINS www.salesisnotsimple.com
  52. 52. thank you! SINS www.salesisnotsimple.com
  53. 53. questions? SINS www.salesisnotsimple.com
  54. 54. 4804 16 Street SW SINS www.salesisnotsimple.com

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