Apr 11, 2017
What will your life be like in 2037?
by Jackie Marshall - Senior Account Director
Interesting question and one I was asked to consider in advance of attending an excellent IGD seminar recently entitled ‘Retail in the future, near and far’.
It was actually quite hard to envisage where I would be living, working or spending my leisure time twenty years from now. However the changes ahead, for all of us, feed into the adaptations grocery retailers will need to make in order to meet the needs of the population as a whole.
Far from being the rigid configuration we have known for many years, increasingly the structure is becoming both fluid and dynamic and the pace of change is likely to increase as we move forward.
The IGD event highlighted that we have already seen a number of specific examples of this changing landscape. For example, major supermarkets focusing their developments on smaller convenience store formats has fuelled much of the growth in this sector, disrupting the playing field for traditional convenience sector players. Tesco’s recent acquisition of Booker was widely quoted as ‘stunning’ the grocery trade, ripping up the rule book and opening up new trading opportunities.
Stores within stores, such as the Hello Fresh concessions within Sainsbury’s and Holland & Barrett within Tesco have shown a willingness to adapt and experiment with growing industry trends in the prepared fresh food and health categories. Another example of retailers getting close to shoppers has been the move into large office spaces, typified by Waitrose opening its first cashless store in Sky TV’s HQ.
The rise of small size retail formats is set to continue with store footprints shrinking further. Firstly to suit the trend for top-up shopping and secondly the likely rise in property prices meaning that pressure from increased rent will be significant.
At the other end of the scale, large size retail formats may become multi-functional environments, running as part open to the public and part dark store to fulfil home delivery or click and collect operations.
During the event we were reminded of the renowned Martini slogan of the 80s – anytime, anyplace, anywhere. Certainly an interesting analogy given the need to meet specific shopping mission focused trips at a time, place and method of delivery that suits the individual.
A good example of this is the rise in Food-To-Go, almost a hybrid between food service and food grocers. The arrival of pop up stores such as the new Hello Fresh store at Old Street underground station feeds the increasing trend for specific, meal occasion inspired, freshly prepared food. Other than a potential flattening of disposable income due to Brexit, the IGD predict the Food-To-Go sector will grow by 35% over the coming years.
Merchandising by shopping occasion is another area predicted to develop further too. Rather than merchandising in traditional categories such as chilled, ambient and frozen, we are likely to see products grouped more by shopping occasion, such as evening meal, similar to the Dine In Meal concept in M&S.
Other initiatives presented during the seminar included:
Carrefour’s test of digital trolleys that load up your shopping list and direct shoppers around the store straight to chosen products.
Starbucks’ voice recognition service enabling customers to order and pay for drinks over an app and simply collect the order in store.
Amazon Go’s trial of its Just Walk Out technology where shoppers entering a store are monitored and stock taken is recorded via a virtual cart. Shortly after leaving with their goods, shoppers are charged via their Amazon account and receive a receipt for the purchase by email.
New entrants and industry disruptors, typified by Just Eat and Deliveroo, are also likely to continue to push the boundaries forward. As larger retailers find themselves having to adapt at a similar pace, however they are likely to become more risk-taking and adventurous, proactively pushing through and directing change themselves.
By the end of the IGD presentation I, for one, found considering the shape of retail landscape in 2037 a little less daunting! There is much evidence to suggest that the grocery trade has already started to adapt to our future needs and as these continue to change there will no doubt be more developments along the way. Exciting times indeed.
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