Checkout June 2018 2524 Checkout June 2018

Interview

The ECR Leaders’ Congress inSeptember will be themed ‘TheIrish Grocery Market in 2023’.“Predicting what the retailenvironment will be in five years’

time is the key issue that is concerning Irishretailers and brands,” says Carolan. “Wepredict that people will receive automaticdeliveries for what they need each week bysubscription purchasing,” he says. “The only debate is whether they will pick it

up from the store or have it delivered, ormaybe opt for click-and-collect, which is big inFrance. Many purchases are routine andpredictable, so those types are ideal forautomatic delivery and subscriptionpurchasing. All the information that is requiredto allow for automatic purchase and delivery isavailable, so it is a question of when it willarrive in Ireland and who is going to do it. “Some of our steering group members think

it will be within three years, some believe itwill be in five years, but none of them thinkthat it will be beyond that, so what doesautomatic delivery mean for the future of thephysical store? “If 10% or 20% subscribe to automatic

deliveries, that will have a big impact on howstores look or operate. We aren’t talking aboutdrone deliveries – it is possible, but unlikely.The store won’t go away, but it will evolve, inkeeping with digital transformation, and ECRis a forum for all parties in retail to debatethese issues,” says Carolan.

A big opportunity for retailersOnline grocery shopping is less than 2% inIreland, so we are playing catch-up with theUK, where it is up to 7%. Carolan believes that

Irish shoppers are ready for change. “Tesco and SuperValu are the only retailers

offering an online grocery shopping service, sothe market is wide open for a disrupter to enterthe fray, and there is a big opportunity therefor retailers,” he says. “I’m not sure that Irishretailers and suppliers are ready for automaticdelivery and subscription purchasing fornecessities, however, people want mealsolutions, and they want them delivered. “Retailers can’t solve shopper missions on

their own. They must work together to identifyshopper missions and respond to them. When itcomes to category management, retailers mustmake online shopping as enjoyable and asexperiential as physical in-store shopping.”

Brexit bluesECR surveyed its 40 member companies at theend of 2017, and the hot topics were digitaltransformation and Brexit. “One of our members, PwC, have been

advising our members on Brexit, and theyhave maintained from the beginning that therecould only be one outcome – a hard Brexit,”says Carolan. “If you consider the amount ofambient product (70%) that is imported intoIreland, a significant amount of that isimported from the UK. The belief is that theseambient products will be subject to tariffs, andif you add on delays at customs, then thepotential impact on product availability instore is massive. “Brexit has the potential to disrupt product

availability in store. In addition, it couldincrease sales prices or reduce margins forretailers and brands, so that is a potentiallyhuge impact. What percentage of the productsavailable in discounter stores is imported from

the UK? I would guess that most of it comesfrom Europe, so, therefore, their product costswon’t increase, whereas products coming toretailers from the UK will be subject to priceincreases. What impact would that have onthe retail market in Ireland? It could givediscounters further competitive advantages inthe Irish market.”

Future retailCarolan is confident that bricks-and-mortarstores will survive the digital onslaught, but hesays that the big question is the likely extent ofonline shopping’s reach in the Irish market.Could it reach as much as 20%? Time will tell. “We have set up an ECR digital forum to

track the digital technologies and social mediathat have influenced shoppers on their path topurchase, including in-store digitaltechnologies,” he says. “As online shoppingincreases, giving shoppers the same digitalexperience in store will be important. The useof apps by shoppers in store in Ireland islimited, and that will change in the next fewyears. We will see apps that will allow shoppersto scan products in store and view theirnutritional benefits, as well as make pricecomparisons with other brands and with thesame brand in other stores. If you look at thegrowth of online purchasing, why will peoplevisit stores? They will visit for fresh food, foran experience, and for consuming the producton site, or they may visit for a shopper mission,for example, a dinner party or special occasion,or for a specific product.”Carolan also believes that over the next few

years, we will see even bigger eating areas instores, and an even bigger focus on fresh. “We are seeing this already, in Ireland and

internationally. For example, Fallon & Byrne inRathmines is half restaurant, half store, and theAB supermarket in Athens has a nice eatingarea beside their deli, where you can buy theproduct and eat it at home or eat it in store. “Interestingly, Dunne Stores in Rathmines

have a tea, coffee and chocolate departmentthat is configured in the same way as a wine

Digital transformation will ensure that the path to purchase in the Irishgrocery retail sector in five years’ time will be totally different. That’saccording to Declan Carolan, general manager of ECR Ireland, whotalks to Maev Martin about the potential impact of digital technologies– and Brexit – on Ireland’s grocery retail sector

DigitalTransformation

Interview

SHAPING THE FUTURE OF SHOPPING

A Belfast-based technology firm recently heldan event in Rio Brazil, in Victoria Square, toshowcase how the future of shopping hasalready arrived. The company has developedDarius for Retail, a shopper data,personalisation and insight software platformthat integrates with mobile and in-storeproximity technology, such as wi-fi andbeacons. It can be used to create personalisedshopping experiences and marketingcampaigns for shoppers who opt in.

The technology has the ability to integratewith new and existing in-store infrastructure,such as automatic number plate recognition,point-of-sale systems, and even dynamiclighting. It can use digital signage to recognisecustomers nearby and display tailoredmessages according to their preferences.Products can also be equipped with beacon sensors that detect whopicks up a product, prompting a discount offer to be sent directly tohis/her mobile-phone inbox. The results have been dramatic, withretailers achieving double-digit growth in footfall, basket spend, andthe quality of their customer data. Belfast fashion retailer Rio Braziladopted Velocity’s Darius platform in 2016, and Stevie Simpson, ownerof Rio Brazil, says that its customer database has grown by 36%. “Communicating effectively with our customers always proved

difficult, and we typically averaged email-open rates of around 8%,”Simpson says. “With Darius, we’ve been able to build up robust

profiles of our customers and, as a result, communicate moreeffectively with them. Since implementing Darius, we’ve seen ouremail-open rates grow in excess of 20%.”Velocity Worldwide’s clients include retail property management

firms Standard Life Investments and Cushman & Wakefield, as well asbrands such as L’Occitane and Topshop, and major food retail outletsin the UK and US, including Spar, Family Shopper and Dairy Queen.

department in a supermarket, and their winedepartment has sit-down tasting areas and awine dispenser, where you can taste wines thatare on special offer before purchasing them.They also have an indoor eating area, as well asa store.”

From category management toshopper marketing As the flagship organisation for collaborationbetween trading partners in retail – retailers,suppliers and service providers – ECR is keenfor companies to work together on supplychain and demand-side activities. “We alsopromote working together internally,” saysCarolan. “Purchasing departments need towork with supply chain and marketingdepartments. When a retailer and tradingpartner collaborate, designated departments ineach organisation should be working witheach other. We want to see companies movingaway from the silo approach. Retailers havethousands of suppliers, so suppliers shouldtake the lead in working closely with retailers.We have run some very successfulcollaboration projects for retailers andsuppliers. The last time we did this was threeyears ago, when Tesco, Musgrave and BWGFoods worked with various suppliers onaspects of their supply chain. Those projectsresulted in an increase in sales for bothretailers and suppliers.”

A publication entitled The Consumer andShopper Journey Framework, produced byECR Community and published three yearsago, moved the conversation on. “It showed that retailers and suppliers had

to look at shopper marketing and advertising,as well as identify common consumers andtarget them appropriately,” Carolan says.“This was a game-changing publication for theretail industry in Ireland because it showedhow retailers and manufacturers can worktogether to target those customers that arecommon to both via category management,shopper marketing, and advertising, ratherthan engaging in separate campaigns. “In-store communication to shoppers has

been very poor for a long time. The eight-stepapproach to category management wasdeveloped 20 years ago, and it still works.Sophisticated in-store marketing by brands orretailers is a relatively new phenomenon thatonly came into vogue in Ireland in recentyears. Many shopper-marketing campaignsweren’t fitting with retailers’ or brands’objectives and were stand-alone initiatives, butnow retailers and brands are engaging in moreunified campaigns. Now this is all about tochange again. The path to purchase in fiveyears’ time will be totally different due todigital transformation. Digital transformation,category management, shopper marketing andconsumer and shopper insights are the big

issues that we deal with. In ECR, our priorityis to facilitate a discussion between tradingpartners about the likely impact of digitaltransformation on Irish retail.”

Driving growth through insightECR, in conjunction with V360˚, part of theVisualise Group, hosted a breakfast talkentitled ‘Driving Growth through Three-WayInsight (Consumer, Shopper and Retailer)’with guest speaker Olga Mulvey, categorycontroller at Kerry Foods, on 22 June. Thiswas the second talk in the ShopperSymposium Series, ‘Preparing for the Future ofShopping While Thriving in the Now’. Theorganisation has also been working withyoung people recently, via the ‘FeedingIreland’s Future’ initiative, now in its fifthyear and organised by ECR members inconjunction with the Department ofEmployment Affairs and Social Protection.“We ask our member companies to give a

two-hour session to young unemployed peopleor early school-leavers on how to write CVs,do interviews, or look for work,” says Carolan.“Youth unemployment is at 13% in Ireland,

so there are still a lot of people who need helpseeking work. Our members give sessions to500 young people, so over 4,500 will havebenefitted from it over the past five years. It isa great example of the industry workingtogether to help young people who need it.” n

Enda McShane, CEO of Velocity Worldwide, and Stevie Simpson,owner of Belfast fashion retailer Rio Brazil

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Crisps & Snacks

26 Checkout June 2018

Interview