The Smartphone Revolution – Download FREE IGD Research
Published on Jan 24 2012 6:58 PM in Technology
This relatively new device is beginning to emerge as a future ‘remote control’ of consumption. The strength of this opportunity is highlighted by IGD’s shopper research which found that more than half (56%) of UK online grocery shoppers are interested in using this device when shopping for groceries online, and many of these (33%) have not yet tried it. IGD identifies the top trends for 2012 and offers ESM readers the chance to download its FREE research on ‘Ten apps that will change the world of grocery retailing’.
Trends - what’s on your 2012 radar?
The end of a year and the start of a new one always heralds an opportunity for businesses and individuals to reflect on what worked over the last 12 months and what will be the key to success in the coming 12 months. To provide some food for thought, grocery experts, IGD, have identified ten trends that need to be on your radar for 2012. Apps are redefining the way shoppers interact with products and stores. Find out more with a free extract from IGD’s presentation on 10 apps which could profoundly change our industry, click here: <http://www.igd.com/esm-download>
1. Tomorrow’s technologies today
Last year saw an explosion of technological innovation and 2012 is sure to yield further innovation. New varieties of virtual ‘pop-up’ stores are particularly popular (with recent examples from eBay, P&G, Ocado and Coop Schweiz), while new apps and social media campaigns are emerging daily and are becoming increasingly sophisticated (e.g. Walmart’s Shopycat app giving Facebook users the ability to find gifts for friends and family based on their tastes and interests). Over time, this will change how stores operate and also how shoppers interact with outlets. Don’t forget that tomorrow’s technologies won’t just relate to digital advances; we’ll see progress in back-office systems, equipment and processes too.
2. The battle for opinion starts now
Crowdsourcing is taking place like never before as businesses turn to shoppers, fans and opinion formers for new product ideas. This is part of a wider trend in society towards inclusion, in which we all have a voice. Both manufacturers and retailers are tapping into this trend right now (e.g. Unilever’s VIP club on facebook which lets users shape the future direction of brands). Growing social media usage will undoubtedly accelerate engagement in 2012, transforming NPD and shopper marketing processes. The consequence is that businesses will need to be prepared to manage and respond to bad, as well as good, feedback as the battle for opinion shapes up.
3. Collaborative consumption
Group buying for certain items is growing in popularity as shoppers seek to pool resources and move towards a more collaborative form of consumption that is more sustainable in its approach. In the food arena, retailers such as Sobey’s, Real and Whole Foods Market have been among the first to experiment, tapping into sites such as Groupon, LivingSocial and BuyaPowa which are connecting deal seekers online. While this trend is only just emerging, shoppers are beginning to engage and experiment and the ease of connecting online may well drive this activity forward in 2012.
4. Multi-channel, multi-opportunity
Format innovation is moving at pace as differentiation becomes ever more important, and this is leading to a blurring of channel boundaries. Yet to achieve maximum success in the year ahead, businesses will need to adopt a format by format approach, tailoring supply and product capability to individual channel opportunities. This will, in turn, impact marketing and commercial functions as promotions, range and the value agenda become more tailored by format. A key battlefield to watch in 2012 will certainly be the online arena and how continued evolution here impacts trends and strategy in the big box format. The evolution of “order online, collect in-store” solutions like the drive format will also be one to watch closely with retailers such as Casino and Coop Schweiz recently experimenting here.
5. The smartphone revolution
A smartphone revolution is underway as this relatively new device starts to emerge as a future ‘remote control’ of consumption. With this comes opportunity, as highlighted in our recent shopper research which found that more than half (56%) of UK online grocery shoppers are interested in using this device when shopping for groceries online, and many of these (33%) have not yet tried it. Add to this our forecast for the online UK grocery market which is set to almost double to £11.2bn by 2016 (up from £5.9bn in 2011) and a real opportunity starts to emerge, which will be replicated on an international scale as online and mobile traction grows. Colruyt, for example, already receives 4% of orders for its click and collect service, Collect&Go, through smartphones and for Migros’ leshop.ch this percentage is already in excess of 5%.
6. Quicker and quicker
We all know that the pace of change within our industry and society at large is speeding up, driven by rapid advances in communications, technology and an increasingly volatile trading environment. This is nowhere more evident than in supply chain functions, where a whole new set of metrics for success have emerged in 2011. Increased agility and flexibility will be must-have factors in 2012, while efficiency, responsiveness and collaboration are also expected to be critical according to industry leaders that IGD talked to. The way in which the Japanese supply chain was able to respond rapidly in the aftermath of the earthquake that hit the country in March 2011 is testimony to this. This is surely an area that will see further developments in 2012 as businesses take steps to make their supply chains fit for the future.
7. Cradle to cradle thinking
Taking a zero tolerance approach to waste, straight from the product design stage, will progress even further in 2012 as businesses seek to remove costs and become more sustainable; why pay a rapidly rising fee to dispose of waste when it can be converted into a new and valuable resource? This concept will become critical to business over time, and any company failing to embrace this approach for product and packaging design will be exposed both to rising costs and public condemnation. Ultimately, we will reach a stage where almost everything, including energy, water and materials can be recaptured and reused. Some businesses are already starting out on this journey now to put themselves ahead of the curve in the future.
8. Managing the value agenda
Promotions were a key commercial lever in 2011 and nearly 80% of retailers in IGD’s survey on promotional forecasting and planning believe that promotional intensity has increased considerably in the last two to three years. This has created additional volatility in supply chains which retailers and manufacturers will need to find new ways to tackle. Solutions include collaborative promotion planning, forecasting and replenishment, gaining full visibility of forecasts, stocks and EPOS data and joint evaluation of promotions. Tackling some or all of these areas in 2012 will help businesses effectively manage the value agenda in a time of economic austerity. In the front office, we will also see continued evolution in promotional and engagement tactics as the year unfolds.
9. The global economy – what lies ahead?
Global economic developments continue to impact countries and businesses across the world as never before. Grocery businesses will have to contend with a whole host of macro-economic challenges in 2012, including the potential for greater volatility in commodity prices and world markets as a whole. Perhaps the most pressing question, however, is whether the world will once again enter recession in 2012 and how the future of the Euro and Dollar will play out. These are big issues and much is at stake. While the eventual outcome may well be beyond our control, we will certainly need to take steps this year, as businesses and individuals, to tackle what lies ahead.
10. More than 7 billion mouths to feed
Last, but certainly not least, in IGD’s trends for 2012 are the growing resource challenges that we face as a planet. In 2011, the world’s population stepped over 7 billion and further growth is inevitable. This will place additional pressure on the world’s scarce resources, both in terms of raw materials and natural resources. Grocery businesses will bear the brunt of this and all organisations will need to adopt responsible and sustainable models to avoid reputation damage. While this is a long-term trend, the arrival of a new year provides the opportunity to renew focus on an area that will be critical for our industry and the planet as a whole as we move forward. This will affect the entire grocery supply chain, with businesses in all sectors taking steps to move things on (e.g. McDonald’s strategy to continually evolve both its menu and sourcing strategy to provide greater sustainable commitment for its customers).
2012 will certainly be one to watch with rapid technology advances, further economic uncertainty and more steps towards a multi-channel future. However, with many potential developments on the cards, businesses will need to prioritise investment carefully, backing the winners and focusing on delivery in areas of core expertise. Developing the capability of key personnel and encouraging flexibility, agility and a positive mindset will also be essential to succeed. The predictions in this article draw on IGD’s extensive research across retailers, stores, manufacturers, and shoppers worldwide. To find out more, please visit www.igd.com
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ESM has teamed up with IGD to offer readers a chance to download an extract from IGD’s research presentation ‘Ten apps that will change the world of grocery retailing’ free of charge. Simply click on the link below or paste it into your browser to download your copy: <http://www.igd.com/esm-download> (24 Jan)
© 2012 ESM European Supermarket Magazine