Grocery trends presentation skills

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Looking at the current trends affecting the retail grocery space in 2008

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Grocery trends presentation skills

  1. 1. Trends in Grocery Retail Authored by Steven Conway Date: 2008
  2. 2. Then…
  3. 3. And Now
  4. 4. Evolution of Retail <ul><li>Grocery retail very much different vs. ten years ago </li></ul><ul><ul><ul><li>Organics and “all natural” products permeate all shelf space </li></ul></ul></ul><ul><ul><ul><li>International food exposure drives demand for products at retail </li></ul></ul></ul><ul><li>Manufacturers and retailers develop new retail environment </li></ul><ul><ul><ul><li>Time crunch drives ready-made growth </li></ul></ul></ul><ul><ul><ul><li>Lux touches go mainstream with specialty sections (i.e. cheeses, wine, olives). </li></ul></ul></ul><ul><ul><ul><li>Desire to be destination of choice in increased competitive food retailing drives lifestyle store formats </li></ul></ul></ul>
  5. 5. Consumer behavior drives grocery retail 4. Environmentally Aware 5. Economic Pressure Private Label Go Green Initiatives 3. Health Conscious Education 2. Variety Desired Niche Aesthetics 1. Convenience Key Quick Trip Solution Display Ready-Made Semi-Homemade Digital
  6. 6. Convenience Key 1. Convenience Key Quick Trip Solution Display Ready-Made Semi-Homemade Digital
  7. 7. Consumers look for DIFM alternatives <ul><li>Consumer behavior: </li></ul><ul><li>Overscheduled, seek ready-made foods to </li></ul><ul><li>alleviate pressure of cooking </li></ul><ul><li>Retail challenge: </li></ul><ul><li>Fighting for share of meal dollars against </li></ul><ul><li>takeout and restaurants </li></ul><ul><li>Retail solution : </li></ul><ul><li>Ready-made meals & sides to accommodate lifestyles </li></ul><ul><ul><li>Example: Whole Foods, Tesco Fresh and Easy Market, Safeway’s Citrine Bistro, and Lund’s Market. </li></ul></ul>Source: Progressive Grocer, August 2007 Iconoculture Whole Foods Salad Bar
  8. 8. Consumers want short cuts - retail delivers solution <ul><li>Consumer behavior : </li></ul><ul><li>Lack of time for meal planning, tired of defaulting </li></ul><ul><li>to same old standby meals </li></ul><ul><li>Consumer challenge: </li></ul><ul><li>Finding new meal ideas, gathering ingredients </li></ul><ul><li>Retail solution: </li></ul><ul><li>Solutions displays—multi-category promotions </li></ul><ul><li>ideas from meals to spring cleaning </li></ul><ul><ul><li>Example: Fresh Express, ready-to-eat salads, works with retailers & thirty other brands to bundle together meal solutions </li></ul></ul>Source: IRI. Times and Trends. August 2007 Fresh Express bundle meal solutions
  9. 9. Consumers think of “homemade” in a new way <ul><li>Consumer behavior : </li></ul><ul><li>Desire to control what family eats, but lack of </li></ul><ul><li>time and know-how to make multi-faceted </li></ul><ul><li>meals </li></ul><ul><li>Consumer challenge : </li></ul><ul><li>Shortcuts to make prepared + fresh = </li></ul><ul><li>homemade </li></ul><ul><li>Retail solution : </li></ul><ul><li>Dinner assembly sessions </li></ul><ul><ul><li>Example: Publix Apron’s Make-Ahead Meals, customers register for sessions, create meals using retailers ingredients and selection of recipes </li></ul></ul>Publix Apron’s Kitchen Line Source: TheLedger.com, November 2007
  10. 10. Consumers want streamlined shopping experience <ul><li>Consumer behavior : </li></ul><ul><li>Limited time, want to get in and out of grocery </li></ul><ul><li>stores </li></ul><ul><li>Retail challenge : </li></ul><ul><li>Desire to interact with consumers and provide </li></ul><ul><li>better shopping experience </li></ul><ul><li>Retail solution : Create programs that make </li></ul><ul><li>shopping easier i.e. text messaging coupons, </li></ul><ul><li>touch screens, smart carts </li></ul><ul><ul><li>Example : Kroger links consumer cell phone with bank accounts for quicker check-out. </li></ul></ul><ul><ul><li>Example: Microsoft MediaCart navigates consumers around store and check them out </li></ul></ul>Source: IRI- August, 07, www.mediacart.com ShopRite MediaCart
  11. 11. Consumers low on time refill on quick trips <ul><li>Consumer behavior: </li></ul><ul><li>Time crunched, gathering staple items on the fly </li></ul><ul><li>via quick trips – mission shopping for essentials i.e. </li></ul><ul><li>bread, milk, juice </li></ul><ul><li>Retail challenge: Convenience stores grocery </li></ul><ul><li>section </li></ul><ul><li>Retail solution : Offer essential items typically found at the back of the store in the front </li></ul><ul><ul><li>Example: Retailers create secondary milk displays in front of store. </li></ul></ul>Source: IRI. Times and Trends. August 2007
  12. 12. Variety Desired Aesthetics 4. Environmentally Aware 5. Economic Pressure Private Label Go Green Initiatives 3. Health Conscious Education 2. Variety Desired Niche Aesthetics
  13. 13. Consumers shopping needs vary, retail goes niche <ul><li>Consumer behavior: </li></ul><ul><li>More needs & higher expectations: variety, specialization, </li></ul><ul><li>price—ALL factors—no one stop fits all </li></ul><ul><li>Retail challenge : </li></ul><ul><li>Consumers shop by need state, average 3.6 stores </li></ul><ul><ul><li>Retailers roles: Wal-Mart= broad variety of goods, Costco= bulk food items, </li></ul></ul><ul><ul><li>Trader Joe’s = unique items, Jewel= staple food items, plus bakeries and butchers on rise </li></ul></ul><ul><li>Retail solution : </li></ul><ul><li>Increase breadth of offering to satisfy </li></ul><ul><li>consumer needs and drive floor traffic </li></ul><ul><ul><li>Example: Retailers transition from </li></ul></ul><ul><ul><li>offering staple only items to greater </li></ul></ul><ul><ul><li>breadth and higher-end products & </li></ul></ul><ul><ul><li>services </li></ul></ul>Source: Speciality Food Magazine. “Supermarkets Go Specialty” May 2006 The Wall Street Journal. “Business Insight, Dec. 2007
  14. 14. Consumers multi-shop shopping, competition to be destination of choice <ul><li>Consumer behavior: </li></ul><ul><li>More needs and more retail options, no need to default </li></ul><ul><li>to traditional grocers </li></ul><ul><li>Retail challenge: </li></ul><ul><li>Be the destination of choice for consumers </li></ul><ul><li>Retail solution : </li></ul><ul><li>“ Lifestyle” stores, compete with higher end stores and discount retailers </li></ul><ul><ul><li>Example: Safeway Lifestyle stores: increased prepared </li></ul></ul><ul><ul><li>foods, locally sourced, natural and organic products, sushi stations, larger delis, cooking demonstrations, </li></ul></ul><ul><ul><li>full service butcher, Starbuck’s & Jamba Juice </li></ul></ul>Safeway’s Perishables Display Source: Speciality Food Magazine. “Supermarkets Go Speciality” May 2006 Associated Press, December 2007
  15. 15. Consumer don’t want to be bombarded <ul><li>Consumer Behavior : </li></ul><ul><li>Consumers want a less intrusive retail environment </li></ul><ul><li>while shopping </li></ul><ul><li>Retail Challenge: </li></ul><ul><li>Balance satisfying merchandisers and consumers </li></ul><ul><li>Retail Solution : </li></ul><ul><li>Create a cleaner retail environment which creates a </li></ul><ul><li>better shopping experience </li></ul><ul><ul><li>Example: Restricting number, size, & configuration of in-store displays </li></ul></ul>
  16. 16. Variety Desired 4. Environmentally Aware 5. Economic Pressure Private Label Go Green Initiatives 3. Health Conscious Education 2. Variety Desired Aesthetics Niche
  17. 17. Consumer seek clarity on “healthy” <ul><li>Consumer Behavior : </li></ul><ul><li>Health conscious, overwhelmed with </li></ul><ul><li>competing information </li></ul><ul><li>Retail Challenge : </li></ul><ul><li>Taking back control, providing added value </li></ul><ul><li>by educating consumers </li></ul><ul><li>Retail Solution: </li></ul><ul><li>Act as an authoritative source, create </li></ul><ul><li>systems that identifies better for you foods </li></ul><ul><ul><li>Example: Hannaford supermarkets rate the nutritional value of their items on a scale of zero to three stars. </li></ul></ul><ul><ul><li>Example: Kraft’s line of sensible solutions educates consumers on choosing healthier ingredients </li></ul></ul>Source: New York Times ( 11/2006, 9/2007)
  18. 18. Environmentally Aware 4. Environmentally Aware 5. Economic Pressure Private Label Go Green Initiatives 3. Health Conscious Education 2. Variety Desired Aesthetics Niche
  19. 19. Consumers become environmental advocates <ul><li>Consumer Behavior: </li></ul><ul><li>Increased concern & education about greener and </li></ul><ul><li>sustainable products </li></ul><ul><li>Retail Challenge: </li></ul><ul><li>Consumers seek out environmentally conscious </li></ul><ul><li>retailers and products </li></ul><ul><li>Retail Solution: </li></ul><ul><li>Retailers and brands adopt green practice </li></ul><ul><ul><li>Example: Wal-Mart opens high efficiency stores. </li></ul></ul><ul><ul><li>Whole Foods offers “A Better Bag” </li></ul></ul>Source: Agri-Food Canada. Going Green: The Future of the Retail Food Industry, July 2007
  20. 20. Economic Pressure 4. Environmentally Aware 5. Economic Pressure Private Label Go Green Initiatives 3. Health Conscious Education 2. Variety Desired Aesthetics
  21. 21. Consumers increase preference for private label <ul><li>Consumer Behavior: </li></ul><ul><li>Consumers seek high quality but demand low </li></ul><ul><li>prices </li></ul><ul><li>Retailer Challenge: </li></ul><ul><li>Private label has been perceived as low quality </li></ul><ul><li>and poor imitations of national brands </li></ul><ul><li>Retailer solution: </li></ul><ul><li>Drive innovation in overall quality, packaging, and </li></ul><ul><li>ingredients </li></ul><ul><ul><li>Example: 70% of consumers think private label products are as good, if not better, than national brands </li></ul></ul>Source: Mintel. Organic Foods - October 2007
  22. 22. Consumers taste profiles expand <ul><li>Consumer Behavior: </li></ul><ul><li>Consumers demand unique flavor offerings and </li></ul><ul><li>organic products </li></ul><ul><li>Consumer Challenge: </li></ul><ul><li>Finding these products on a wide scale across </li></ul><ul><li>multiple product offerings </li></ul><ul><li>Retailer solution : </li></ul><ul><li>Evolve private label to branded status, elevate </li></ul><ul><li>consumers trust and increases awareness </li></ul><ul><ul><li>Example: Only 56% of consumers could identify Target’s “Archers Farms” as a private label brand. </li></ul></ul><ul><ul><li>Example: Safeway’s O Organic line anticipates </li></ul></ul><ul><ul><li>$300 million in sales for 2007 </li></ul></ul>Source: Mintel. Organic Foods - October 2007
  23. 23. Thank You

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