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IRI's Weekly News Update - w/c 20th March 2017

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• Retail footfall decline continued in February
• Arla brand records biggest growth among UK’s biggest 100 grocery brands
• Which? reveals biggest supermarket substitution fails
• Automated ordering system driving improved product availability at Morrisons
• Shoppers seeking new technology to help with grocery shopping
• Majority of consumers frustrated by inconsistent retail experience
• Study by Mars reveals that emotions data can identify what impact ads will have on sales
• Lidl backs British farming
• Mother’s Day spending set to hit retail record
• Sainsbury's shutters in-store phone shops
• Tesco starts charging for same day click and collect
• Retail sales data suggests higher prices are starting to impact spending
• Direct-to-Consumer channel set for take-off in manufacturing
• Study finds that supermarkets can control shoppers' walking speed down aisles

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IRI's Weekly News Update - w/c 20th March 2017

  1. 1. IRI Weekly News update Your window on the latest trends in Packaged Groceries Stephen Hall Friday 24th March
  2. 2. Copyright © 2015 Information Resources, Inc. (IRI). Confidential and Proprietary. 2 • Retail footfall decline continued in February • Arla brand records biggest growth among UK’s biggest 100 grocery brands • Which? reveals biggest supermarket substitution fails • Automated ordering system driving improved product availability at Morrisons • Shoppers seeking new technology to help with grocery shopping • Majority of consumers frustrated by inconsistent retail experience • Study by Mars reveals that emotions data can identify what impact ads will have on sales • Lidl backs British farming • Mother’s Day spending set to hit retail record • Sainsbury's shutters in-store phone shops • Tesco starts charging for same day click and collect • Retail sales data suggests higher prices are starting to impact spending • Direct-to-Consumer channel set for take-off in manufacturing • Study finds that supermarkets can control shoppers' walking speed down aisles Weekly News Summary – 20th March 2017
  3. 3. Copyright © 2015 Information Resources, Inc. (IRI). Confidential and Proprietary. 3 Retail Footfall Decline Continued In February Retail footfall in February was down 1% on a year ago, according to latest data from the BRC- Springboard monitor. This is lower than the three-month average of 0.8%, but slightly above the twelve-month average of -1.1%. High Street footfall rose 0.1% in February on the previous year’s rate of -2.9%. Meanwhile, footfall in Retail Park locations fell a disappointing 1.6% in February, compared to a 2.5% increase in February 2016. This is an acceleration on January’s fall of 0.4% and below the three-month average of -0.9%. Footfall in Shopping Centres fell 2.6% in February on the -0.6 equivalent rate in the same month of 2016. This is marginally below the three-month average of -2.4%. Helen Dickinson, Chief-Executive of the British Retail Consortium, commented: “Visits to retail destinations fell by 1% in February, which marks little change to what has been a familiar story over the past few years. Although, given the disappointing in-store sales so far in 2017, the decline in footfall last month is unsurprising. “On closer inspection, there has been a steeper drop than normal in retail parks, with footfall to this shopping destination falling at the fastest rate since November 2013. In comparison, footfall on the high-street grew marginally, likely driven by its diverse offer. “The modest relief fund for business rates announced in the Budget will hopefully go some way to helping those shops hardest hit, albeit only temporarily. It won’t however ease the burden for the majority of retailers who will continue to pay nearly a half of rental values in property tax. A business tax system that continues to curtail investment in bricks and mortar is at odds with an industry that desperately wants to invest in order to maintain local jobs and build more experience and engagement with shoppers to attract them into their stores.” Diane Wehrle, Marketing And Insights Director at Springboard, added: “Footfall in February was a tale of two halves. Whilst footfall improved slightly with a drop of -1.0% compared to -1.3% in January however, this decline is not reflective of the stabilisation of consumer behaviour. “Increasing uncertainty arising from the imminent triggering of Article 50 has certainly started to have an impact on purchasing behaviour, the types of destinations shoppers are visiting and how they spend their money. High Streets are clearly benefiting as the destination of choice for dining and leisure, whilst shopping centres continue to underperform as they struggle with a weak entertainment and leisure offer, coupled with increasing caution amongst consumers around retail spend. “Retail parks experienced their biggest drop in footfall (-1.6%) since November 2013 as spend on furniture and household items – traditionally a significant footfall driver for retail parks – weakened slightly in February. High Streets now have the opportunity to further promote their offer and pull in visitors to shop and dine.” Source: NamNews 20th March 2017
  4. 4. Copyright © 2015 Information Resources, Inc. (IRI). Confidential and Proprietary. 4 Arla Brand Records Biggest Growth Among UK’s Biggest 100 Grocery Brands Arla branded products recorded the largest growth of any of the 100 UK grocery brands listed in The Grocer’s latest Britain’s Biggest Brands index. The dairy brand achieved growth of £37m in 2016 – almost four times that of the next closest brand (Pepsi, £8.5m) – and putting it in 21st place in the index of the UK’s 100 most popular names in food and drink. Arla hailed the achievement, saying it was in line with its 2020 Strategy, which aims to build the brand into a top household name by 2020. Stuart Ibberson, Senior Director, Marketing, at Arla Foods UK, said: “We are delighted with Arla’s top-drawer performance in The Grocer’s Britain’s Biggest Brand index. The growth of the Arla brand is a phenomenal achievement and reflects our position as a positive example of how product innovation can open up new possibilities for consumers and producers alike. “This success is driven by our commitment to the development of innovative products that cater to a variety of consumer tastes and lifestyles. Last year alone, Arla branded milk products brought in an additional £95m thanks to products such as award winning Arla B.O.B and Arla Farmers Milk, keeping us on track to meet our ambitious Strategy 2020 targets.” Source: NamNews 20th March 2017
  5. 5. Copyright © 2015 Information Resources, Inc. (IRI). Confidential and Proprietary. 5 Which? Reveals Biggest Supermarket Substitution Fails A study by consumer watchdog Which? has revealed some of bizarre alternatives supermarkets are offering customers when items in online orders are not available. Which? asked more than 7,000 online shoppers to share their strangest online supermarket order substitutions. The results revealed that some of the products ordered were replaced with some very surprising alternatives. Examples included a shopper who ordered a salad, but got offered a bar of Dairy Milk instead. Another shopper ordered gluten free bread, but was sent dog food, whilst someone ordered apple juice, but instead got a bottle of Chardonnay. Meanwhile, one shopper ordered toilet paper, but was sent nappies, whilst another ordered a pack of condoms but received a pregnancy-testing kit! According to the Which? survey, Asda is the worst supermarket for substituting groceries, with around half (48%) of the supermarket’s customers saying they received something unexpected in their online shopping in the space of six months. Amazon Fresh (37%) was next worst for substitutions, while Waitrose Deliver (33%) and Tesco Online (30%) followed closely behind. Iceland, which was recently named as the best online supermarket by Which?, topped the list with only 12% of online shoppers claiming to have had a substitution in the previous six months. Richard Headland, Which? magazine editor said: “Substitutions can have a big impact on how satisfied customers are with online grocery services, so supermarkets should make every effort to get orders right first time. “If necessary, supermarkets need to make intelligent substitutions – rather than some of the bizarre swaps we found – to avoid disappointing shoppers.” Source: NamNews 20th March 2017
  6. 6. Copyright © 2015 Information Resources, Inc. (IRI). Confidential and Proprietary. 6 Automated Ordering System Driving Improved Product Availability At Morrisons Morrisons and technology partner Blue Yonder have revealed details of an automated ordering system that has helped reduce shelf gaps at the supermarket by up to 30%. Morrisons linked up with artificial intelligence and machine learning applications provider Blue Yonder with the aim of optimising replenishment and automating the ordering of 26,000 ambient and long-life product SKUs in all its 491 stores. The Blue Yonder Replenishment Optimisation technology started rolling out in Morrisons stores last summer. It automatically analyses sales data and other data sources from Morrisons and combines this with external data such as weather forecasts and public holidays. Through the automated analysis of data, the system can predict the level of demand down to the individual product and store location. Blue Yonder’s technology then fully automates ordering per store and per product. Using machine learning technology, Blue Yonder claims the system learns as it goes and can use a vast and complex amount of data to make highly accurate ordering decisions. It says that benefits of the system are multiple: Employees no longer need to spend time manually ordering goods, which frees up their time for other tasks, such as attending to customers and; with improved in-store availability, customer satisfaction improves. The system now covers all Morrisons 491 stores, automating over 13 million ordering decisions per day and helping reduce shelf gaps by up to 30%. In Morrisons’ preliminary year end results released earlier this month, Morrisons’ Chief Executive David Potts said: “Our biggest new initiative has been our new automated ordering system. The system is capital light, utilising cloud technology and store-specific historic sales data to forecast stock requirements. It is reducing costs and stock levels, while also saving time for colleagues, and providing a better offer for customers.” Markus Juhr-De Benedetti, Chief Revenue Officer of Blue Yonder, commented: “We are delighted to have supported Morrisons in improving their product availability and therefore better serving their customers. The retail landscape is changing faster today than ever before – Blue Yonder’s mission is to provide a competitive advantage to retailers through Machine Learning. Every day, Blue Yonder delivers 600 million decisions to its customers that boost revenues, increase margins and enable rapid responses to changing market dynamics.” Source: NamNews 21st March 2017
  7. 7. Copyright © 2015 Information Resources, Inc. (IRI). Confidential and Proprietary. 7 Shoppers Seeking New Technology To Help With Grocery Shopping While shopper use of tech for discounts, coupons and offers has been on the increase as technology has evolved in recent years, new research from IGD highlights it is not just saving money that shoppers are interested in when it comes to technology related to food and grocery. Indeed, when asked which areas they would like technology to help them with, 22% said they would like help with reducing food waste, 18% on health and diet information, 18% with in-store navigation, 15% with fast delivery (one hour) and 9% with sourcing product information. Today, over eight in 10 (83%) shoppers would like technology to help them with their food and grocery shopping in future. Help with savvy shopping tops the list when it comes to areas where consumers feel technology could help them, with over half (55%) of shoppers wanting to use technology to find the best offers. Highlighting the opportunity for the food and grocery industry to engage further with technology, IGD’s research reveals that while the number of shoppers saying they have a useful app on their phone has jumped from 72% in 2014 to 81% in 2016, the number of shoppers saying they have a useful food and grocery app on their phone has dropped from 40% in 2014 to 34% in 2016. Furthermore, over four in 10 (43%) of shoppers are currently purchasing food and groceries online and nearly a third (28%) show an interest in using a voice activated device at home to add items to an online basket. Vanessa Henry, Shopper Insight Manager at IGD, said: “Our research highlights a big opportunity for the food and grocery industry to engage and assist shoppers using technology. However, it’s essential that shopper needs are satisfied as otherwise technology becomes short lived. “While it’s encouraging to see that the use of technology and digital tools is becoming established ahead of a store visit, particularly when shoppers are planning their shopping or looking for inspiration, there is a real opportunity to harness new innovations and data in driving shopper loyalty for retailers. Shoppers are clearly not shy to advancements in technology in food and grocery, and with the growing demand for progression in this area we look forward to seeing how retailers will continue to rise to this challenge. “Technologies that might be useful to shoppers in the future could be smart home devices which could help with meal inspiration and planning, and in-store opportunities might include technology that helps speed up the checkout and payment process.” Source: NamNews 21st March 2017
  8. 8. Copyright © 2015 Information Resources, Inc. (IRI). Confidential and Proprietary. 8 Majority Of Consumers Frustrated by Inconsistent Retail Experience Not only do today’s shoppers expect a great service experience, they want it to be integrated and harmonised across channels. This is according to recent research by Manhattan Associates which found that two thirds of shoppers say they expect a consistent cross-channel shopping experience, yet just 22% claim to enjoy such an experience today. With 68% stating they expect their online experience to be duplicated in store, and 70% saying they feel they know more about the products and services in store than the store staff, Manhattan Associates said it is clear where the consumer thinks retailers need to invest. Despite the current disconnect, an encouraging number of retailers appear to be focused on bridging this gap. 44% of UK retailers are looking at new in-store technologies as a business priority in the coming year whilst 40% are planning to invest in tools to improve support from customer facing employees. The rewards for those retailers able to effectively deliver on their plans are potentially huge, with more than half of the consumers surveyed stating this seamless service capability as the main reason they would be willing to commit their loyalty to a retailer. Other key findings include: • 39% of consumers stated “being able to check stock availability” as the most important role of the store associate yet only 6% of retailers say they have an accurate inventory overview across all channels all of the time • Retailers think “general customer service, being friendly, approachable and greeting customers” is the most important role of the store associate (64%) • 41% of consumers stated “fast delivery” as a key reason they would stay loyal to a retailer • Consumers consider “free delivery” as the most important fulfilment option a retailer should offer as part of their online service proposition (62%) and are happy to wait three days to receive products in this way • “Ship from store” seems to be increasing in popularity with 56% of retailers already doing it and 36% planning to offer it as part of their future fulfilment strategy Henri Seroux, senior vice president EMEA at Manhattan Associates, commented: “Consumers clearly have an expectation of what a retail experience should look like in today’s digital world and are willing to offer their loyalty in exchange for retailers able to meet that expectation. Now is the time for retailers to invest in technologies that keep them ahead of the curve and take the appropriate steps required to close the gap between customer expectation and today’s reality. Those that do will be the ones that will thrive in 2017 and beyond.” Source: NamNews 21st March 2017
  9. 9. Copyright © 2015 Information Resources, Inc. (IRI). Confidential and Proprietary. 9 Study By Mars Reveals That Emotions Data Can Identify What Impact Ads Will Have On Sales A study by Realeyes and Mars has revealed emotion measurement technology can distinguish between ads which deliver high or zero/low sales lift with 75% accuracy. The study involved 149 ads across 35 brands and 22,334 people in six countries. Realeyes measured how people felt while they watched the ads by using artificial intelligence to analyse their facial expressions through their webcams (with their consent). The study was designed in collaboration with the Mars Marketing Laboratory at the Ehrenberg-Bass Institute for Marketing Science. Realeyes’ emotion data was cross-referenced with Mars’ known sales lift data for each ad to investigate the relationship between emotions and sales performance. This created the largest emotional dataset linked to real business outcomes currently in existence. The analysis showed that emotions data could be used to correctly identify whether the ads tested had a ‘no to low’ or ‘high’ impact on sales 75% of the time. “We wanted to see if our emotion measurement technology could distinguish between high and low performing ads. Being able to identify strong creative with high sales impact enables advertisers to push these ads, and avoid putting media spend behind those with low, or worse – no sales impact. It’s about spending campaign budgets more effectively, optimising ad creation and media buying at no additional cost,” said Mihkel Jäätma, Chief Executive of Realeyes. “Just think – an algorithm can detect how people feel about an advert by tracking their facial expressions, and that can tell us whether that ad will sell or not – that’s exactly what our scientists been working to achieve.” Realeyes technology measures the micro-movements of the face and uses computer vision and machine learning to analyse them, focusing on expressions of happiness, surprise, confusion, disgust, engagement, and behaviours such as how and when people move their head. The company is now looking at how the insights from the Mars study could be expanded in order to further the advance of predictive analytics linked to real business outcomes. Source: NamNews 22nd March 2017
  10. 10. Copyright © 2015 Information Resources, Inc. (IRI). Confidential and Proprietary. 10 Lidl backs British Farming Lidl has signed up to Back British Farming, an NFU (National Farmer's Union) charter. Improving relationships with farmers The Back British Farming charter launched in 2013. It is part of the NFU’s wider efforts to put British farming at the heart of food production policies. It asks for the support of the food manufacturing industry, consumers and politicians. Retailers signed up – including Aldi, M&S, Morrisons, the Co-op and Waitrose – commit to stock more British food and enhance relationships with British farmers. Lidl's commitment to British Lidl is the latest retailer to make this commitment, however the discounter has been championing British in-store for some time, placing emphasis in-store on its support for local. In addition, Lidl has been supporting the NFU's Fruit & Veg Pledge since 2016. According to the discounter, 70% of its core range is sourced from British suppliers, with Lidl also exporting some of it over to its other 27 markets. Supporting farmers and growers NFU President, Meurig Raymond, commented: “We are delighted that Lidl UK has pledged its support to the NFU’s Back British Farming Charter, highlighting a commitment to the future of the British farming industry…To produce more food, farmers and growers need the support of retailers like Lidl UK to allow them to do their job.” Christian Härtnagel, Lidl UK CEO, commented: “Our goal for the future is to continue to put best practice in sustainability firmly at the heart of the business, and supporting growth in the British farming sector is another crucial step in fulfilling that ambition. To ensure that we can always offer our customers the freshest, highest quality products at the best prices, it is imperative that we continue to support the British farming industry and further cultivate the strong relationships that we have with our suppliers.” Source: IGD 22nd March 2017
  11. 11. Copyright © 2015 Information Resources, Inc. (IRI). Confidential and Proprietary. 11 Mother’s Day spending set to hit retail record Consumer spending this Mother’s Day is expected to reach £80m for the first time ever. British shoppers planning on treating [to treat] their mum this weekend are set to push spending to a record high. In recent years, consumers splashing out over this time of year has grown 18% since 2014. According to figures from Halifax, £69.6m was spent in 2014 and £71.9m in 2015, before reaching £75.6m in 2016 - representing an average annual growth of 4.2%. Total spending on Mothering Sunday alone reached £19m last year and 2017 is expected to far exceed that figure. Director of Cards, Jon Roberts at Halifax, said: “In financial terms, Mother’s Day is a growing feature of the calendar. “Not only are we spending more in the days leading up to Mothering Sunday, but we’re spoiling mums on the day itself too, making sure they know they’re loved and appreciated.” Source: Cosmetics Business 22nd March 2017
  12. 12. Copyright © 2015 Information Resources, Inc. (IRI). Confidential and Proprietary. 12 Sainsbury's shutters in-store phone shops Sainsbury's is closing down its network of phone shops following a review of the services offered at its stores. Completing withdrawal from telecoms operations Of the 38 shops, 16 are being sold to network operator EE and the remainder will be shuttered. 160 staff will be affected by the decision as well as a further 15 staff at Sainsbury's Coventry-based central telecoms team, and Sainsbury's has said it will redeploy staff where possible. The moves comes a year after the closure of Mobile by Sainsbury's, a joint venture with Vodafone which used to provide pay-as-you-go services to around 150,000 customers. Sainsbury's marginal involvement in the telecoms market contrasts with Tesco which has become the fifth biggest virtual mobile network operator. It now has over a 4.8m customers, over half of whom are more loyal pay monthly customers, as well as nationwide network of phone shops. Repurposing space could help Argos Closing the units will provide Sainsbury's with additional retail space as it looks to reconfigure stores. The released space could help Sainsbury's to relocate more Argos units to its supermarkets. It aims to have 250 Argos units at its stores within three years and is on track to have around 66 open by June. The space could also be taken by other retail services. Sainsbury's is keen to work with retail partners to create a more compelling retail offer that generates additional footfall for its stores. Source: IGD 22nd March 2017
  13. 13. Copyright © 2015 Information Resources, Inc. (IRI). Confidential and Proprietary. 13 Tesco starts charging for same day click and collect Tesco has started charging for same day and certain next day collection slots, which used to be a free service. We take a look at why click and collect is important... Between £2 and £4 Tesco has introduced a charge between £2 and £4 for its same day click and collect service, which was recently expanded into more stores across the UK. Next day collection can be free or up to £2 depending on the slot, but it is free for Delivery Saver customers. Delivery saver schemes such as Tesco's are important to lock in loyalty, and the incentive of permanent free next day delivery will encourage more shoppers to join. Delivery costs a barrier for online Retailers are faced with the challenge of making online operations profitable but at the same time maintaining sales and order volumes. Click and collect is a more profitable form of fulfillment than home delivery, particularly with the growing frequency of shops that shoppers are undertaking. However, it is still a challenge for retailers who are competing to offer the fastest and most efficient service. Tesco and Sainsbury's have both recently started offering same-day collection. Click and collect growing in popularity Tesco has said that it has seen a 20% increase in shoppers using its click and collect service in the last year and around 10% of orders are now placed on the same day. Click and collect gives shoppers flexibility by giving them control of when they want to pick up their order, rather than waiting in at home for a delivery. Increasingly, shoppers want the added convenience of faster, on-demand online grocery services, driven in part by new market entrants such as Amazon, inducing higher costs of fulfillment for the retailer. Source: IGD 23rd March 2017
  14. 14. Copyright © 2015 Information Resources, Inc. (IRI). Confidential and Proprietary. 14 Retail Sales Data Suggests Higher Prices Are Starting To Impact Spending Official figures from the Office for National Statistics (ONS) show that UK retail sales volumes grew by a better-than-expected 1.4% in February. However, the underlying trend suggested that higher prices were starting to impact shoppers’ disposable income. In the three months to February, sales volumes fell by 1.4%, a sharper slide than the 0.5% fall for the three months to January and the worst decline since March 2010. Whilst recent evidence suggests that the fall in the value of the pound is only just starting to effect shop prices, the ONS blamed the worsening figures on increasing fuel prices, which in February were 18.7% higher than a year earlier. ONS statistician Kate Davies said: “The underlying trend suggests that rising petrol prices in particular have had a negative effect on the overall quantity of goods bought over the last three months.” ONS inflation data released earlier this week showed that the Consumer Prices Index rose to 2.3% in February – up from 1.8% in January. Howard Archer at IHS Markit said consumers were becoming more cautious as higher inflation squeezed their purchasing power. “The economy’s persistent resilience since last June’s Brexit vote has been largely built on consumers keeping on spending,” he said. “With consumers now seemingly moderating their spending, the long-anticipated slowdown in the economy looks set to materialise unless other sectors can make significantly increased contributions.” Richard Lim, Chief Executive at Retail Economics, added: “Retail sales showed their resilience, bouncing back from a poor start to the year. In particular, small retailers saw incredibly strong double digit growth with sales rising at a much faster rate than mainstream high street retailers. “That said, underlying conditions remain on a downward trajectory and the backdrop of rising inflation and lacklustre wage growth is beginning to make consumers more cautious. “Indeed, inflation is rising at the fastest rate in over three years and on its current path we expect real earnings to be shrinking by the summer. As households’ budgets tighten, discretionary spending will come under further pressure. “Furthermore, the prospect of a sooner than expected interest rate rise may spook consumers into tightening their purse strings.” Source: NamNews 23rd March 2017
  15. 15. Copyright © 2015 Information Resources, Inc. (IRI). Confidential and Proprietary. 15 Direct-to-Consumer (DTC) Channel Set For Take-Off In Manufacturing Amid challenging trading conditions, a new study has found that 48% of manufacturers are racing into building Direct-to-Consumer (DTC) channels, with 87% seeing DTC relevant to their products and consumers. These findings are published in a new report released this week by LCP Consulting and The Centre for Supply Chain Management at Cranfield University. The report is based on a survey of over 100 manufacturing executives from major global players including two of the world’s largest automotive manufacturers and several of the world’s largest companies. A third of the respondents were from major manufacturers in the Food & Beverage sector. Those manufacturers leading the move into DTC, expect DTC to grow by 5% CAGR (Compound Annual Growth) over the next five years. But, ‘Followers’ remain steadfast that growth will come from retail – expecting 6.5% CAGR over five years. As a result, DTC Leaders plan to invest around 1.5 times more revenue into DTC than Followers over five years. The report states that moving from a CPG manufacturer to a DTC model is not straightforward, and manufacturers must ask themselves if this is the right decision. The main considerations include establishing a brand presence, building an e-commerce platform, potentially opening stores, distribution, fulfilment, and ever-important last-mile fulfilment. To find revenue growth from DTC the report says that companies need to personalise the experience for their customers. Manufacturers should improve demand forecasting and planning, better understand the Cost-to-Serve, and optimise their supply chain distribution networks to ensure the digital consumer can make a seamless transaction. Manufacturers highlighted in the survey that ‘guaranteed delivery’, ‘speed of delivery’, ‘ease of access’ and ‘convenience’ are all key success factors. Will Shepherd, Partner from LCP Consulting said: “Those manufacturers who have already integrated a front and back end DTC model have the ability to deliver a seamless omni-channel experience for their customers. For them, an omni-channel approach is core to delivering significant long-term growth and value. Shepherd added: “Ultimately, it is those manufacturers who respond to additional customer demands and adopt new models that will reap the rewards.” Despite the risks and investment required, the report highlights five DTC advantages: • Control and clarity of brand – through product, packaging, and brand message • Full share of the ‘customer experience’ – brand alignment throughout the purchasing process • Speed to market – development, testing and introduction without seasonal delays or other retail interruptions • Direct access to the customer – yielding a wealth of valuable data and insight • Assortment access – providing consumer choice from the full product range, not a limited sample Professor Richard Wilding OBE, Professor of Supply Chain Strategy Logistics, Procurement and Supply Chain Management at Cranfield School of Management commented: “Manufacturers are increasingly focused on gaining control of the supply chain through to the consumer, this benefits them by gaining direct understanding about consumer preferences with regards to products and services, thus reducing costs and increasing value for both parties.” Shepherd concluded: “DTC offers manufacturers the opportunity to market, sell and distribute goods directly to the consumer, bypassing traditional wholesale and retail channels. This channel can bring businesses new opportunities as well as dilemma – both of which vary, depending on the products and markets in question.” Source: NamNews 24th March 2017
  16. 16. Copyright © 2015 Information Resources, Inc. (IRI). Confidential and Proprietary. 16 Study finds that supermarkets can control shoppers' walking speed down aisles A study by Rotterdam School of Management, Erasmus University has revealed that retail managers can persuade customers to walk at the ideal pace, either quicker or slower, on their shopping trip, by altering lines and patterns. Bram Van den Bergh, leader of the research, said: “Managing the flow of customers can be a challenge for retailers. When customers rush through the store, they miss interesting products and buy less. Spending too much time in front of the shelves can lead to annoying congestion in the aisles, which also leads to declining sales. “It has been known for some time that walking speed plays an important role in shoppers’ purchasing decisions. But until now it was unclear what retail managers could do to influence the pace of their customers. This research was set up to find out how they might achieve this.” The researchers found that closely spaced, horizontal lines on the floor slowed the pace at which shoppers walked down an aisle, encouraging them to browse. In contrast, wider gaps between the lines made shoppers move more quickly. The university explained that marks on the floor alter the perception of the length of the aisle with more frequent lines making shoppers believe that the end is farther away so they instinctively slow down. If the lines are further apart, shoppers speed up because they think the end is nearer. The researchers observed 4,000 people in a series of experiments that were conducted both in-store and in a lab. If the lines were 20 inches apart, they found it created the optical illusion that the end of the aisle was further away. Shoppers then tended to slow their pace. In subsequent tests, slower shoppers were found to be much better at recalling what products they had seen than those who sped through. The researchers related their findings to goal gradient theory: when an individual is closer to their goal, in this case, the end of the aisle, they will walk faster to reach it. Source: Retail Bulletin 24th March 2017
  17. 17. IRI Weekly News update Your window on the latest trends in Packaged Groceries Stephen Hall Friday 24th March

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