Prof. Gino Van Ossel: Simplicity or the shopper in control?

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Prof. Gino Van Ossel: Simplicity or the shopper in control?

  1. 1. 20-9-2011 Simplicity or the shopper in control ? Trends in (food) retailing Prof. Gino Van Ossel 20th September 2011 Gino.VanOssel@Vlerick.com agenda 1. shopper trends 2. retail trends 3. conclusion2| 1
  2. 2. 20-9-2011 shopper trends: decreasing loyalty 1 shopper trends: decreasing loyalty4| 2
  3. 3. 20-9-2011 shopper trends: decreasing loyalty – 1st level the Berlusconi syndrom: from brand loyalty to brand sensitivity5| shopper trends: decreasing loyalty – 2nd level6| 3
  4. 4. 20-9-2011 shopper trends: decreasing loyalty – 2nd level A brand lovers A brands represent >70% in purchased units switchers A brands represent between 40 and 69% in purchased units PL lovers A brands represent <40 % in purchased units7| source: GfK panel services Belgium shopper trends: decreasing loyalty – 2nd level 33,0 32,3 31,6 30,3 29,1 28,0 26,4 26,6 26,6 40,0 40,6 41,3 42,2 42,9 42,6 43,3 38,9 39,5 28,1 28,2 28,4 29,1 29,6 29,8 30,7 30,8 30,1 MAT MAT MAT MAT MAT MAT MAT MAT MAT sep07 dec07 mar08 jun08 sep08 dec08 apr09 jun09 sep09 PL lovers Switchers A-brands lovers (index 107) (index 111) (index 81)8| source: GfK panel services Belgium 4
  5. 5. 20-9-2011 shopper trends: decreasing loyalty – 2nd level from brand sensitivity to indifference9| shopper trends: increasing price sensitivity 2 5
  6. 6. 20-9-2011 shopper trends: increasing price sensitivity growth of discount 20 19,5 15 10,1 10 13,3 hard 5,0 5 soft 5,1 total 6,2 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 market share discount – Western Europe (source: Nielsen) shopper trends: increasing price sensitivity growth of private label 37,2% 37,9% 36,7% 35,6% 34,7% 33,3% 32,1% 31,3% 31,4% 30,1% 30,6% 28,7% 29,3% 27,4% 28,0% 27,0% market share private label – Western Europe Value share (source: Nielsen) Volume share 2001 2002 2003 2004 2005 2006 2007 200812 | 6
  7. 7. 20-9-2011 shopper trends: increasing price sensitivity increasing promotion intensity22,0 2008 19,9 200920,0 2010 17,518,0 16,8 16,6 16,1 16,2 15,8 15,7 15,8 15,6 15,4 15,4 15,216,0 15,1 14,3 13,814,0 13,3 13,1 13,1 12,8 12,8 13,512,0 12,9 12,7 12,0 11,9 11,7 11,9 11,5 11,210,0 10,5 10,5 10,4 10,1 8,0 6,0 P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12 P13 source: GfK panel services Netherlands shopper trends: choice stress 3 7
  8. 8. 20-9-2011 shopper trends: choice stress 300 varieties of jam 250 varieties of mustard 75 varieties of olive oil Sheena S. Iyengar & Mark R. Lepper, “When Choice is Demotivating: Can One Desire Too Much of a Good Thing?,” in: Journal of Personality and Social Psychology, 2000, Vol. 79, No. 6, 995-1006 shopper trends: choice stress aisle traffic 242 260 1.65% 11.92% (index 722) conversion (# of buyers) 4 3116 | 8
  9. 9. 20-9-2011 shopper trends: choice stress less is more17 | shopper trends: in short… decreasing increasing choice loyalty price stress sensitivity 9
  10. 10. 20-9-2011 agenda 1. shopper trends 2. retail trends 3. conclusion19 | retail trends: managing price perception 1 10
  11. 11. 20-9-2011source: investor relations meeting, Greece, 3rd December 2009 retail trends: cost management 2 11
  12. 12. 20-9-2011source: investor relations meeting, Greece, 3rd December 200924 | 12
  13. 13. 20-9-201125 | retail trends: rethinking product ranges 3 13
  14. 14. 20-9-2011 retail trends: rethinking product ranges less is more SKU’s - 7.5%source: investor relations meeting, Greece, 3rd December 2009 14
  15. 15. 20-9-2011Source: Carrefour half year results, 30th August 2010 De Standaard 11 Feb 09 15
  16. 16. 20-9-2011 retail trends: rethinking product ranges less is more search for differentiation32 | 16
  17. 17. 20-9-2011 retail trends: rethinking product ranges more is more 33 | retail trends: rethinking product ranges true variety # sku’s “more is more” “less is more” (to some extent) (most of the time)34 | 17
  18. 18. 20-9-2011 retail trends: rethinking product ranges35 | retail trends: rethinking product ranges less is more search for differentiation private label proliferation 18
  19. 19. 20-9-2011 retail trends: rethinking product ranges: private label proliferation correlation between changes in # PL SKU’s and PL value sharesalesvalue growth SKU growthNielsen, MAT week 37 change 2009 vs. 2007, Belgium 7300 SKUs (38% of total) 19
  20. 20. 20-9-201139 | Source: Carrefour half year results, 30th August 2010 20
  21. 21. 20-9-2011 Source: Carrefour half year results, 30th August 2010retail trends:rethinking product ranges less is more search for differentiation private label proliferation more space for non-food & services 21
  22. 22. 20-9-201144 | 22
  23. 23. 20-9-201145 |46 | 23
  24. 24. 20-9-2011 retail trends: in short… managing rethinking price efficiency product ranges perception agenda 1. shopper trends 2. retail trends 3. conclusion48 | 24
  25. 25. 20-9-201149 | © Vlerick Leuven Gent Management School conclusion search for growth, margin and differentiation !50 | 25
  26. 26. 20-9-2011 conclusion the future will be challenging short (& medium?) term: consumer confidence & economic climate ? 2 0 -2 -4 -6 -8 -1051 | source: NBB conclusion the future will be challenging short (& medium?) term: consumer confidence & economic climate the strategic dilemma price perception management & cost reduction search for differentiation how about non-food ? short (& medium?) term: outlook even more challenging in particular: multi-brand retailing: same strategic dilemma trend towards integrated retailers impact of the internet: new entrants additional costs intensifying price competition52 | 26
  27. 27. 20-9-201153 | conclusion if this were a weather forecast… …rain with major risk of thunderstorms 27
  28. 28. 20-9-2011Retail & Trade Marketing Research Centre:• training• workshops• entertrainment• (contract)researchGino.VanOssel@Vlerick.com #ginovanossel 28

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