Global Retail Trends & the 10 fastest growing markets, 2011 By Marc Hubbard, VP North America Planet Retail Ltd June

Transcription

1 Global Retail Trends & the 10 fastest growing markets, 2011 By Marc Hubbard, VP North America Planet Retail Ltd June part of

2 Contents 1. Introduction 2. Retail Trends in The 10 Fastest Growing Markets 4. Summary 2 of 74

3 Introduction Speaker Marc Hubbard, VP of North America at Planet Retail Who is Planet Retail Planet Retail is the leading Global Retail Insights Provider. We provide our clients with critical strategic Insights to drive competitive advantage Our clients include over 70% of the World s Top 20 Retailers and over 80% of the World's Top 20 CPG companies 3 of 74

4 RETAIL TRENDS IN of 74

5 5 of 74

6 1. Click & collect roll out to boost online sales Drivers behind the trend Market Consumer Retailer Growing access to broadband internet around the world. Growing use of smart phones. Looking to avoid delivery issues cost, time, damage. Removes frustration of out-of-stocks. Restores element of impulse purchasing. IMPLICATIONS Internet increasingly influencing shopping decisions. Consumers accessing and contributing to peer-topeer product reviews Customers will increasingly favour those retailers with seamless site-to-store transactions and conveniently-placed stores. Convenience could outweigh price for many consumers. Retailers to position their stores as pick-up points e.g. dedicated parking. Pure-play retailers will hook up with retailers with stores to tap into trend. 6 of 74

7 7 of 74

8 2. Small stores thinking big Drivers behind the trend Market Consumer Retailer Legislation. Market saturation. High street vacancies. Fast-paced lifestyles. Single households. Ageing population. Tap into new consumer segments. Higher margins. Less investment than big stores. IMPLICATIONS Limited assortment and focus on private label means that smaller and medium brands will be squeezed out. Suppliers will need to think about smaller pack sizes. Convenience may outweigh price. Arrival of more specialist concepts e.g. targeting elderly or health-conscious. Could look to acquire networks of smaller stores. Convenience stores may be hard hit as they lack range and price competitiveness. Could be new way of entering mature new markets. 8 of 74

9 E-commerce goes cross-border 9 of 74

10 3. E-commerce goes cross-border Drivers behind the trend Market Consumer Retailer Globalisation of media and trends. Increasing e-commerce activity globally even in emerging markets. Consumers increasingly want the latest trends seen on the internet, in magazines and in movies - regardless of availability in their home market. Increasingly looking to develop internationally. Looking to reduce risk in market entries. Increasing demand for products from global audience. IMPLICATIONS Brands can enjoy pentup demand in markets where they are not yet available. Consumers will be increasingly willing to buy items from websites outside their home market. Retailers will launch online in new markets to test waters before opening stores. Retailers will need to optimise their website for international visitors language, style and delivery options. 10 of 74

11 11 of 74

12 4. Smart phones creating new shopping occasions Drivers behind the trend Market Consumer Retailer Rising number of smart phones. On the go lifestyles. Willingness to buy through mobiles. Looking for more convenient ways to compare prices instore vs online. New order opportunities when customers on the move. Increases stickiness and loyalty to brand. Creates a buzz. IMPLICATIONS M-commerce will increasingly steal share from the existing e- commerce channel. Opening up new shopping occasions e.g. peak activity during rush hour. All types of retailers will look to invest in m-commerce. ipricing to benefit pure-play operators most as rivals stores act like showrooms. Time-sensitive selling (e.g. ebay auctions) set to benefit. 12 of 74

13 13 of 74

14 5. Private label set to focus on quality Drivers behind the trend Market Consumer Retailer Economic recovery will shift focus away from price. Consumers often still associate private labels with lower quality than brands. Consumers desire for higher quality products. Higher margins on premium private labels. Differentiator compared to rivals. IMPLICATIONS Return to promotion activity focusing on quality rather than simply price. Increased consumer spending on private label products. Consumers increasingly used to promote private labels chosen by customers. Premium, or superpremium, private label ranges set to grow. Private label penetration to rise further. All retailers, even pricefocused discount stores, will emphasise quality. 14 of 74

15 5. Private label set to focus on quality 2011 will see return to quality Customer endorsement is becoming a key way to promote quality of private labels in grocery. Walmart s Asda in UK launched Chosen by You in September Asda conducted 200,000 blind taste tests with 40,000 consumers across the UK. September 2010 Sainsbury s in the UK relaunched its Taste the Difference range with the promise that it is now taste tested by customers. Restaurant News 15 of 74

16 16 of 74

17 6. Marketing goes social Drivers behind the trend Market Consumer Retailer Increasing smartphone ownership. Increasing social network membership. Increasingly want their voices to be heard. Willing to give away more information about themselves in return for better experience. Growth through loyaltybased initiatives rather than price. IMPLICATIONS Traditional marketing channels likely to suffer. Customers will be able to influence retailers strategies like never before. Retailers will need to listen and consult on key decisions. New opportunities to communicate with consumers. Location-based promotions allow new type of instant targeted promotions including influencing behaviour instore. 17 of 74

18 18 of 74

19 7. Leaving non-food to the experts Drivers behind the trend Market Consumer Retailer Difficult economic climate - consumers reducing spend on nonessential items. Fierce deflation in nonfood areas (e.g. electronics). Consumers turning away from big-box stores. Lower risk for retailers if expanding non-food offerings. Many retailers finding non-food dragging performance down. IMPLICATIONS Help to shift focus away from purely price to other factors such as service. Good news for those brands with the scale to become key strategic partners for the retailers. Consumers to benefit from improvement in non-food offering and greater authority. Specialist brands boosts credentials in non-food. Exiting certain low potential categories frees up store space. Route to new markets for specialist brands? e.g. Best Buy into Europe. 19 of 74

20 Vertical integration spurred by health and ethical concerns 20 of 74

21 8. Vertical integration spurred by health and ethical concerns Drivers behind the trend Market Consumer Retailer Increased prevalence of health and ethical issues in the general media. Laws regarding product liability and traceability are becoming more rigid. Rising consumer demand for product information linked to scares in the media. Demand from consumers. Economies of scale: could lead to improved profit margins. Excellent opportunity to move marketing message away from price. Differentiate from rivals. IMPLICATIONS Increasing shift away from price towards these concerns as economy recovers. Consumers will expect transparency across all channels from discount stores to DIY outlets. Increased control over supply chain and products. Private label products quality perception will increase. 21 of 74

22 22 of 74

23 9. Second wave of internationalisation Drivers behind the trend Market Consumer Retailer Economic crisis hit developed markets hardest and forced retailers to reinvestigate international opportunities. Increasingly used to modern shopping and brands. Increasing wealth and aspirations to foreign brands. Poor or stagnant sales in domestics markets for a number of years. IMPLICATIONS Competition in BRICs markets set to intensify. Frontier markets to see their first international retailers. Consumers will initially see little change, as market entry likely to be through acquisition of existing local players. Risk of failure as retailers with no previous overseas experience enter tricky markets. As late to the game, there is likelihood of joint ventures and acquisitions as retailers need local expertise. 23 of 74

24 Range optimisation leads quest for simplicity 24 of 74

25 10. Range optimisation leads quest for simplicity Drivers behind the trend Market Consumer Retailer Consolidation in terms of brands and retailers. Consumers increasingly swamped by too much choice and cluttered stores. Sophisticated loyalty card data. Desire to increase shelf space devoted to private labels. Reduces complexity/ cost/ inventory. IMPLICATIONS Smaller and medium suppliers/brands to be worst hit and squeezed out. Suppliers will react by streamlining their own product assortment. Increased availability. Cleaner stores. Less choice. Fewer brands. More private label. Further power shift from suppliers to retailers. Could lose customers if they strip out too many/wrong brands. Private label penetration set to rise. Loyalty card data crucial. 25 of 74

26 10 Fastest Growing Markets Country Grocery Sales in 11e (Bn USD) Grocery Sales in 16e (Bn USD) Absolute Change (Bn USD) China USA India Brazil Russia Indonesia Turkey Iran Argentina Mexico 1,062 1, ,744 2, of 74

27 Top 10 Fastest Growing Grocery Retailers Company # of Markets in Grocery Sales in 11e (Bn USD) Grocery Sales in 16e (Bn USD) Absolute Change (Bn USD) Walmart 17 including ZA X5 Retail Group Schwarz Group Tesco Carrefour Aldi (Sud & Nord) Costco Auchan AEON Rewe Group of 74

28 Summary Return to economic growth spurs upturn in retail in 2011 Signs of a return to spending, even in premium and luxury. Private Label will continue to grow. Many economic challenges remain Discounters to be most dynamic channel in 2011 Big box stores to struggle in non-food. Many non-food sectors to see sluggish demand. Retailers set to pursue further shopper-centric measures Focus on existing store networks. Testing expansion in new markets with online or small box. Consumers & Retailer will demand more from Manufacturers Price / Value equation is critical Retailers are looking for partners not suppliers 28 of 74

29 Contact details Marc Hubbard VP North America Planet Retail Ltd T: F: United Kingdom: Germany: USA: China: Japan: Greater London House, Hampstead Road, London, NW1 7EJ United Kingdom Dreieichstrasse 59, D Frankfurt am Main, Germany 1450 American Lane Suite 1400 Schaumburg Illinois USA , 88 Tongxing Road, Qingdao , China c/o INSIGHT INC, Atami Plaza 1401, Kasuga-cho 16-45, Atami-shi, Shizuoka Japan T: +44 (0) F: +44 (0) T: +49 (0) F: +49 (0) T: +1 (1) F: +1 (1) T: +86 (0) F: +86 (0) T: +81 (0) F: +81 (0) of 74

30 twitter.com/planetretail facebook.com/planetretail tinyurl.com/pr-linkedin 30 of 74

31 2010 part of