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Coming to grips with the retail revolution?

 

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Six international industry experts gave the audience plenty to think about at the recent BTL Shopper Summit in Auckland, New Zealand. Promoted as “vital for all marketers and sales professionals wanting to be up to date on the latest shopper insights, retail trends and innovation to drive shopper-based strategies for today and tomorrow,” the summit certainly tried to achieve its goal.

Founder and CEO of Shop You and Bantermob Mobile Marketing Group, Kelly Slessor told the audience the pace of change would never be as slow again as it is now. “We think things are going at a million miles an hour but they are only going to get faster. I read up a lot on the Industrial Revolution and where we’re at today.”

Slessor said there were similarities with the present digital revolution, “and we are only about two-thirds of the way through. It’s such an exciting period to be part of the revolution. I love the fact that the world is going to change so much in the next 10-15 years that most people in this room won’t recognise it. And trying to keep on top of that change can be distressingly overwhelming”.

Industry insights she gave the audience included the fact that one third of our leisure time is now spent online. “Sixty per cent of searches now influence purchase decisions. We search for everything.”

She gave some examples of recent massive rises in the purchasing of some retail products in New Zealand. “What are they searching for? What are they looking at? Retailers have to make sure that we are there at the right moment.

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“We are spending an hour to an hour and a half  per day on our smartphones. What we know is that in the last year, our use of social media applications went up 349 per cent.” And yet marketers were largely neglecting to aim their strategies at mobile phones users.

Slessor said the use of imagery is now very important in marketing, with video “all the rage. The results are there. If you look at your Facebook stats, video views are going off the charts”.

Paradigm shift

Silvestro Morabito, managing director of Morabito Management Consulting, said there had been a paradigm shift in the retail industry. Conventional supermarket brands and their suppliers had behaved in a very set way for decades which was: “Very transactional and functional—there’s nothing exciting about it. It was a duck waiting to be caught.”

But now, retailers or suppliers not providing a genuine experience, or hyper-convenience, would have no hope of competing with the likes of Amazon, which was aiming to bring its delivery times down to 60 minutes by using drone technology. “You order it—an hour later it’s at your front door.”

He gave examples of companies that he considered were handling the challenge well, such as McDonalds Australia’s creation of the personal burger, designed by the customer, and sold to them at a considerably higher price than a normal burger.

“The benefits are: increased unit value, higher growth margins, higher levels of customer satisfaction; and it’s an experience. At the centre of everything, is an experience.”

A KitKat store in Singapore’s Orchard Road was another example. “People line up to visit this pop-up KitKat store to make their own KitKat—and pay four times what they’d pay normally. Personalisation, customisation—people aren’t looking for mass. And always in these experiences is the emotional connection.”

A similar story could be seen at Levi stores in London where personalised Levi jeans sold for £300 ($520) and the stores could not keep up with the demand.

Unbelievable machine

As example of the huge challenges that lay ahead, Silvestro Morabito said: “The biggest direct-to-consumer player, with over 700,000 SKUs, is Amazon. These guys want to be part of your DNA. They want to be part of your lifestyle. They cover every category possible. They want to deliver to you more conveniently, cheaper and better value than anybody has ever done in the history of the planet.

“For a $99 subscription, you won’t just get free deliveries of TVs and groceries, you’ll get all the music, movies and TV shows you want. You’ll get all these added value things for $99 a year. Now how are you going to compete with that?”

“Amazon is an unbelievable machine. And it has a CEO who is totally customer-centric.”

Among the top global consumer trends Morabito’s Sydney consultancy saw ahead were rapid convenience and customisation/personalisation, with the latter trend now invading the once almost impenetrable mass markets.

“Customised or personalised product is becoming mainstream in quite a lot of categories and industries. And if you’re not doing it, you could be finished.”

Innovation and decentralisation were also now essential for survival, he concluded.

The voice of the shopper

Mark Roper, marketing manager at Life Health Foods International, said bringing the shopper into the brand planning process early can drive success—ensuring that ideas could be leveraged with retail partners and successfully put into practice in-store.

His key message was why and at what stage it is important to infuse the voice of the customer/shopper into the brand planning process. He gave examples of lessons learned over the past few years, and gave his point of view on future retail trends and possible ways the audience could use this to their advantage.

A major secret of success was to “get people talking”. To illustrate this, Roper said that although there was a “massive world trend” towards healthy foods and vegetarian meat products, these products could seem rather boring in ads. In a TV campaign he was involved in for a small Australian client, this problem had been overcome by hiring a celebrity comedian to poke fun at meat eaters. Consequently, the campaign, “shot on a shoestring, went viral”.

In another example, the power of getting people talking had also brought amazing success for a breakfast product in China. By using celebrities to talk about breakfast cereals on a TV show, the desired message had reached an audience of about 300 million.

Retailer rethink

In a shared presentation with Troy Rudd, Shop-Ability director Peter Huskins told how helping retailers rethink category opportunities from a shopper engagement perspective led to the creation of new opportunities for the client in a key hardgoods channel. They explained the collaborative planning process they went through with the client, including developing and implementing a shopper research plan with each of their retail customers, accompanied shops, online research and positioning the retailers for a controlled store test.

The BTL Shopper Summit was held at Auckland’s Tamaki Yacht Club on May 17.

This story originally appeared on FMCG Business.

 

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