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20-9-2011
1
Simplicity or the shopper in control ? Trends in (food) retailing
Prof. Gino Van Ossel 20th September 2011
agenda
2 |
1. shopper trends
2. retail trends
3. conclusion
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shopper trends: decreasing loyalty
1
shopper trends: decreasing loyalty
4 |
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shopper trends: decreasing loyalty – 1st level
5 |
the Berlusconi syndrom: from brand loyalty to brand sensitivity
shopper trends: decreasing loyalty – 2nd level
6 |
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shopper trends: decreasing loyalty – 2nd level
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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 units
source: GfK panel services Belgium
shopper trends: decreasing loyalty – 2nd level
8 |
28,1 28,2 28,4 29,1 29,6 29,8 30,7 30,8 30,1
38,9 39,5 40,0 40,6 41,3 42,2 42,9 42,6 43,3
33,0 32,3 31,6 30,3 29,1 28,0 26,4 26,6 26,6
MAT sep07
MAT dec07
MAT mar08
MAT jun08
MAT sep08
MAT dec08
MAT apr'09
MAT jun'09
MAT sep'09
PL lovers Switchers A-brands lovers
source: GfK panel services Belgium
(index 81) (index 111) (index 107)
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shopper trends: decreasing loyalty – 2nd level
9 |
from brand sensitivity to indifference
shopper trends: increasing price sensitivity
2
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shopper trends: increasing price sensitivity growth of discount
0
5
10
15
20 19
91
19
92
19
93
19
94
19
95
19
96
19
97
19
98
1999
200
0
200
1
2002
2003
2004
2005
2006
2007
2008
5,1
13,3 5,0
6,2
10,1
19,5
hard
soft
total
market share discount – Western Europe (source: Nielsen)
shopper trends: increasing price sensitivity growth of private label
27,0% 27,4% 28,0% 28,7% 29,3%
30,1% 30,6% 31,4%
31,3% 32,1%
33,3% 34,7%
35,6% 36,7% 37,2% 37,9%
2001 2002 2003 2004 2005 2006 2007 2008
Value share
Volume share
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market share private label – Western Europe (source: Nielsen)
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shopper trends: increasing price sensitivity increasing promotion intensity
12,0 11,911,5 11,7
10,5 10,4 10,510,1
11,9
13,512,9 12,7
11,2
15,1
13,8
12,813,3 13,1 12,8
14,3
13,1
17,5
16,6
15,416,2
15,2
19,9
15,8
16,816,1
15,7 15,8 15,6 15,4
6,0
8,0
10,0
12,0
14,0
16,0
18,0
20,0
22,0
P1 P2 P3 P4 P5 P6 P7 P8 P9 P10 P11 P12 P13
2008
2009
2010
source: GfK panel services Netherlands
shopper trends: choice stress
3
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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
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aisle traffic
conversion (# of buyers)
1.65% 11.92%
242
4
260
31
(index 722)
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shopper trends: choice stress
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less is more
shopper trends: in short…
increasing price
sensitivity
choice stress
decreasing loyalty
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agenda
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1. shopper trends
2. retail trends
3. conclusion
retail trends: managing price perception
1
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source: investor relations meeting, Greece, 3rd December 2009
retail trends: cost management
2
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source: investor relations meeting, Greece, 3rd December 2009
24 |
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retail trends: rethinking product ranges
3
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retail trends: rethinking product ranges
less is more
source: investor relations meeting, Greece, 3rd December 2009
SKU’s - 7.5%
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Source: Carrefour half year results, 30th August 2010
De Standaard
11 Feb 09
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retail trends: rethinking product ranges
less is more
search for differentiation
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retail trends: rethinking product ranges
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more is more
retail trends: rethinking product ranges
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# sku’s true variety “more is more”
(to some extent) “less is more”
(most of the time)
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retail trends: rethinking product ranges
35 |
retail trends: rethinking product ranges
less is more
search for differentiation
private label proliferation
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retail trends: rethinking product ranges: private label proliferation
Nielsen, MAT week 37 change 2009 vs. 2007, Belgium
sales value growth
SKU growth
correlation between changes in # PL SKU’s and PL value share
7300 SKUs (38% of total)
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39 |
Source: Carrefour half year results, 30th August 2010
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Source: Carrefour half year results, 30th August 2010
retail trends: rethinking product ranges
less is more
search for differentiation
private label proliferation
more space for non-food & services
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44 |
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45 |
46 |
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retail trends: in short…
efficiency rethinking product ranges
managing price
perception
agenda
48 |
1. shopper trends
2. retail trends
3. conclusion
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© Vlerick Leuven Gent Management School © Vlerick Leuven Gent Management School 49 |
conclusion
50 |
search for growth, margin and differentiation !
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conclusion
the future will be challenging short (& medium?) term: consumer confidence & economic climate ?
51 |
-10
-8
-6
-4
-2
0
2
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 competition 52 |
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53 |
conclusion
if this were a weather forecast…
…rain with major risk of thunderstorms
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