International Retail Trends Ccgd West 2010

big international retail trendsand how Canadian retailers and suppliers

can get on the winning edge.

presented by

5

SINS www.salesisnotsimple.com

About SINS

Account Management, Trade Marketing, Retail MarketingSales Leadership

Training & Development:

Go-To Market StrategyStructure and Development

Strategy Consulting:

Canadian CPG IndustryInternational Retail

Industry Knowledge & Expertise:

Helping our clients sell more - more profitably

http://www.salesisnotsimple.com


today’s game plan

the 5 big international trends

what you can do to leverage them?- retailer and supplier perspectives

Q&A / Discussion




5 big international retail trends.




#1 getting bigger + going global




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7

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10Source: 2010 Global Powers of Retailing - Deloitte

the world’s ten biggest retailers...

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2

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5




Source: 2010 Global Powers of Retailing - Deloitte

just how big the biggest are...

Retail Sales Rank 2008

Company CountryRetail Sales

(Millions $USD)# of Countries

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




2000 2008

1,152

576

Total Turnover (billions) of Top Ten Retailers

2000 2008

155

96

Number of Countries

The Biggest Retailers are Getting Bigger Through Globalization & Consolidation

Sources: 2002 Global Powers of Retailing - Deloitte 2010 Global Powers of Retailing - Deloitte

+100% +62%




Canada’s ten biggest retailers...


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1

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Company Retail Sales (Millions $USD) Global Rank

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


just how big the big canadian retailers are...

** American owned





Company Retail Sales (Millions $USD) Global Rank

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


just how big the big canadian retailers are...

** American owned




Sources: 2010 Global Powers of Retailing - Deloitte


0

125000

250000

375000

500000

Wal-Mart Carrefour Canada Top 10 Metro Tesco Lidl



Sources: International Monetary Fund 2010 Global Powers of Retailing - Deloitte


Rank CountryCountryGDP 2008

Millions USD

1 United States 14,441,425

2 Japan 4,910,692

3 China 4,327,448

4 Germany 3,673,105

5 France 2,866,951

6 United Kingdom 2,680,000

7 Italy 2,313,893

8 Russia 1,676,586

9 Spain 1,601,964

10 Brazil 1,572,839

11 Canada 1,499,551

Top 10 Retailers

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3

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3



Sources: International Monetary Fund 2010 Global Powers of Retailing - Deloitte


Rank CountryCountryGDP 2008

Millions USD

11 Canada 1,499,551

12 India 1,206,684

13 Mexico 1,088,128

14 Australia 1,013,461

15 South Korea 929,124

16 Netherlands 876,970

17 Turkey 729,983

18 Poland 527,866

19 Indonesia 511,765

20 Belgium 506,183

Top 10 Retailers

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how to get on the winning-edge...

✓benchmark yourselves against winning international formats.✓attend more international conferences to expand your horizon.

Retailers:

✓develop contacts with your colleagues around the world to bring international best practices to your customer locally.

Suppliers:

✓subscribe to several on-line news services to stay in touch with global developments in retailing.

Together:




#2 building great brands




1 value-added private labels

2 extension of brands in related services

3 variety of store formats

4 corporate citizenship

pillars of great retail brand-building

when it comes to brands, retailers are shifting from the “distributor” to the “builder”.

strong retail brands are the passport to global growth





examples of value-added private label brands at tesco





extending the brand into retail services at tesco





offering a variety of store formats at tesco





a new british (branded) invasion at fresh & easy





corporate citizenship as a branding vehicle at tesco








✓ evaluate the consistency of your brand image to the individual shopper.✓ increase efforts to take your brand “beyond the store”.

Retailers:

✓ focus on true innovation to drive growth while avoiding SKU sprawl.✓ connect your marketing teams with those inside the retailer.

Suppliers:

✓ identify category or cross-category opportunities that are able to build equity for both the retailer and supplier brands.

Together:



#3 understanding the individual shopper




retailers are gearing up for customer relationship management 2.0 in a push to understand shopper behavior





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 + valuemultidimensional segmentationeach individual shopper

products assigned scores and attractiveness ratings for each shopper segment.

shopper-profile-tailored communication and promotions

coupon redemption rates of 20-40%.





Lifestage Profitability Store Format

LifestyleShopping

Habits

Promotional Promiscuity

Brand Advocacy

tesco shopper segmentation





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)





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.






#664433








tailored promotionbased on life-stage





Dunnhumby &Metro partnership


Source: Globe and Mail - Nov 19, 2009







✓ think beyond points and discounts.✓ use your CRM tool as a basket builder instead of a trade fund generator.

Retailers:

✓ bring consumer insights to the table that builds on shopper understanding.✓ develop “shopper marketing” capabilities within the organization.

Suppliers:

✓ identify the overlaps between the key shopper segments in the store and the target consumer of the brand and intensify shopper marketing efforts.

Together:



#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


examples of green prioritization at tesco


examples of green prioritization at walmart

concentrated laundry detergentmandated move to concentrated formulas

savings: 100 million gallons of water 95 million pounds of plastic resin 125 million pounds of cardboard.

extended paper roll lifeco-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.





everyone’s keeping an eye on walmart...


Source: Wall Street Journal - Jan. 18, 2010




two great Canadian examples...







✓ engage shoppers beyond reusable shopping bags✓ showcase your efforts and successes in an easily accessible way

Retailers:

✓ read your organization’s “CSR” report and understand it’s impact locally.✓ find areas of common interest between your company and your customer.

Suppliers:

✓ develop common CSR goals as part of the business planning process and scorecard your results with the various stakeholders.

Together:



#5 efficiency spawns a new format





2000 2008

102,522

29,082

52,422

11,300

50,100

17,782

Total Turnover of Aldi / Lidl

Aldi Lidl Total

the “hard discount” format has already taken Europe by storm.

Source: 2002 Global Powers of Retailing - Deloitte 2008 Global Powers of Retailing - Deloitte

major players:

founded: germany 1930’s7,000 european stores

founded: germany 1940’s8,200 stores





hard discount stores examination

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

success factors for hard discount





hard discount stores LIDL





hard discount stores ALDI





ALDI is already at our border...

Aldi Sud launched in the US in 1976.

Over 1000 stores in 30 states.expanded store count during economic downturnAlso owns “Trader Joes” with over 300 stores

USASINS www.salesisnotsimple.com






✓ have a contingency plan in place to deal with a rapid Hard Discount launch.✓ focus on brands and value added promotions.

Retailers:

✓ consider developing an unique product offer for Hard Discount.✓ link with your international colleagues to learn from their experience.

Suppliers:

✓continue to push inefficiencies out of the supply chain in order to make the Canadian industry less attractive to potential competitors.

Together:



Q: what were all those trends again...?

A: the 5 big international trends are...

#1 getting bigger + going global








some reading recommendations from sinshot







thank you!




questions?




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International Retail Trends Ccgd West 2010