Blog Roderik Sorbi – Senior Consultant

 

We all know e-retailing has been around for years, but has recently grown extensively through new providers, while existing formulas are also pushing their online shops. Consumers are buying more, and buying more often. While supermarkets remain focused on the profitable growth of fresh foods. As a result, convenience continues to play a much bigger part, with supermarkets competing against home-delivery services. This all falls into the trend that there is a huge need for retailers to differentiate themselves. Big international online players are showing more and more interest in the European market. With e.g. the total revenue of supermarkets in 2018 in The Netherlands at almost € 40 billion, and the UK at more than £ 190 billion. It seems that there is a revolution going on that will have a grave impact on both categories and brands.

 

Brands are having to make way

It seems supermarkets must fulfil multiple roles these days. I noticed a growing demand for eating meals in supermarkets themselves. Customers want to have as much convenience as possible. Preparing your own home-made meal is not as common anymore, and supermarkets are more and more competing with food delivery services, and vice versa. As a result, supermarkets are catching on, which even includes the possibility of eating their freshly prepared (warm) meals, on the spot. But customers also want to be provided with the option of getting their groceries delivered. As a result, supermarkets are getting additional functions. They need to be a supermarket, a restaurant and a delivery service, all at the same time. But with store sizes remaining the same, this will have an influence on the amount of groceries in the store. Categories and brands are heading towards a scenario where they have to make way in favour of delivery and social commune. With the introduction of daily- and instant delivery, supermarkets are increasingly able to fulfil all shopper missions online.

This leaves brands with the question how they can convince the retailer of the importance of their product, and how it is indispensable from the (online) shelves. Now that food retailers are making more strategic decisions which categories they want to support in their physical stores, the manufacturer is forced to make similar choices. The answer may be found with a bit of strategic research. Understanding the category role, the brand and its product portfolio in the hybrid retailing of 2020.

 

  1. Making a quick trip to the online store

Shopper missions are getting a new meaning entirely. Quick trips to the store don’t just happen in a physical store anymore. It can easily be done online. Destination, routine and convenience categories can get a different role entirely. The role of those categories and brands must be re-defined. To do this, it is important for brands to know their domain’s definition, the shopper mission (or customer journey), and the strength of their place on the (virtual) shelves. Different SKU’s may get a meaningful role as never seen before. With for instance home-delivery, bulk purchases can really be massive. And quick trips delivered instantly by a smooth sailing partner such as Thuisbezorgd (a subsidiary of Takeaway,com) in the Netherlands, requisite a different way of offerings and activations. The best way to determine these factors, is through research.

 

  1. Is your domain definition the same as your consumers?

Category definitions and their category roles will be changing, so let’s start with determining the domain. Brands need to have a clear definition of the domain they are aiming for. But they need to do this based on their consumers’ associations. So there won’t be a gap between how the brand defines their domain, and how the consumer defines it today and in the very near future.

 

  1. What was the consumers’ experience?

Once you have determined and defined your domain, it is time to take a closer look at the shopper mission. Marketers want to know which needs and motives are related to their product, and what the customer journey looks like. What was the latest experience consumers had with my brand? What are drivers and barriers for my brand and/or the category? And within retail channels like a regularly visited store and an online store.

 

  1. Are you on the top (shelve)?

Both in the world of bricks-and-walls and online retailing, some of the core drivers of great packaging designs remain the same. The ability to grab consumer attention, identification, evaluation, consideration and eventually, purchasing behaviour. Testing and learning from your packaging design – protecting and empowering it against the fast and volatile digital shop environment as well as within bricks-and-walls. When falling short, you might lose valuable opportunities to grab the consumer’s attention, which could affect purchasing behaviour in the end.

 

Winners and losers

We will have to wait and see which brands will be handing over their place on the shelves. Brands must look through a strategic point of view at these trends and ask themselves how it will affect their product innovation and brand activation. Provide an answer to defend and expand their brand with an empowered category strategy, new SKU’s, different innovations and even stronger packaging designs. Some brands will come out winners, while others will be close to losing. In order to prevent your product having to make way for new trends, you must know where you stand as a brand. But first and foremost, you need to know when to take appropriate action, which is the exact reason brands should gain insight to be ready for today’s hybrid retailing. Because if they don’t, they might lose their place in the category.

 

We are happy to help

To help brands with the challenges they face in the world of hybrid retailing, we employ our shopper solution. Through a customer journey study, shelf optimiser and a shopper mission study we unravel underlying motives and motivations of making a purchase and insight into optimising all touchpoints, including shelf, product and packaging through methods such as storytelling and associations. All to make sure brands are in the best position to defend and expand their in-stores.