Future Trends & Forces - PLMA

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Future Trends & Forces - PLMA

US RETAIL TRENDS

Future Trends & Forces

November 2012

1

A

Service

PLMA Private Label Trade Show 2012

Chicago, USA


Agenda

1. Who is Planet Retail

2. Onmi-channel retailing

3. Reinvigorating the City

4. E-commerce Retailing

5. The Future of Private Label

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1. Who is Planet Retail


1. Who is Planet Retail

Who is Planet Retail

Planet Retail is a provider of digital retail intelligence.

What does Planet Retail do

Planet Retail provides retail intelligence that helps businesses to uncover

opportunities and power decisions that turn potential into profit.

What makes Planet Retail different

• The breadth and depth of data.

• Specific expertise in retail technology and private label.

• Team of Analysts around the world.

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2. Omni-channel Retailing


2. Omni-channel Retailing – Future Forces

Sales (USD bn)

Some channels are no longer ‘alternative.’

Once considered ‘alternative,’ the warehouse club and value channels are growing sales

faster than traditional channels, i.e. supermarkets and supercenters (mass).

700

600

622

US: Channel Sizes by Sales, 2007-2017f (USD bn)

2007

2012f

2017f

500

524

531

400

300

469

381

443

200

100

0

252

237

202 211

201

207

169

163

125

103

69

47

Supermarkets Mass channel Drugstores Convenience stores* Warehouse clubs Value channel

*Note: Convenience store sales represent merchandise sales only; f – forecast.

Source: US Department of Commerce, National Association of Convenience Stores and Planet Retail

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2. Omni-channel Retailing – Future Forces

Non-traditional channels and formats continue to encroach.

Target’s

PFresh

Family

Dollar

Warehouse

Club

E-commerce

Grocery

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2. Omni-channel Retailing – Top Trends: Fragmentation

Fragmentation – US grocery retailing is transitioning from retailers

operating single banner/same footprint to instead managing portfolios of

smaller, more fragmented formats, each with its own unique footprint.

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2. Omni-channel Retailing – Anytime/Anywhere Shopping

Multi-channel: Combining bricks and mortar with digital technology will be

the norm by 2017. Site-to-store services – essentially using outlets as online

purchase pickup depots – will increase in popularity.

“It’s time to leverage our size and

global footprint to take advantage

of this evolving customer trend.”

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3. Reinvigorating the City


3. Reinvigorating the City – Top Trends: Urbanization

Urbanization – Urban is one of few US expansion opportunities remaining

for big-box retailers. The land rush is on as a host of retailers look to fill the

gaps in urban food deserts in the coming years.

CityTarget launched

in July 2012.

Walmart

Express

stores.

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3. Reinvigorating the City – Top Trends: Localization

Localization – The new ‘convenience’ stores will be those offering

localized assortments and solutions that reflect surrounding neighborhood

demographics and shopper needs.

Grab & Go

cooler wall

Fresh

Prepared

Upscale

beauty

desination

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3. Reinvigorating the City – Top Trends: Food Deserts

Food Deserts: “A low-income census tract where a substantial number or

share of residents has low access to a supermarket or large grocery store.” –

USDA definition.

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3. Reinvigorating the City – Top Trends: Food Deserts

More “buzz” in 2011 but retailers are now in the execution phase.

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4. E-commerce Retailing


4. E-commerce Retailing – Online Trends

E-commerce share of retail spend is growing - Led by customer

desire for convenience and new technology.

Sales: Online vs. Traditional, 2012-2017 (%)

Online

4%

Online

8%

2012

2017

Traditional

96%

Traditional

92%

Source: Planet Retail

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4. E-commerce Retailing – Top Trends: Digitization

Digitalization – Future shopper generations are growing up with technology,

tools and apps that will revolutionize grocery shopping. Watch as more

routine replenishment (stock-up) shopping moves online.

Amazon.com

Subscribe & Save

Peapod QR codes

Quidsi offers ‘mylists’

making reorders fast

and easy.

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4. E-commerce Retailing – Online Trends

Multi-channel retailers are seeing online sales soar. Getting e-commerce

operations right is essential.

Sales: Online Growth, 2012-2017

In Store

Online

-1%

+217%

+20%

+107%

+23%

+103%

+200%

Source: Planet Retail

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4. E-commerce Retailing – France: The home of the drive-thru!

France has 1,700 Grocery drive-thru locations.

Chronodrive (Auchan)

Advert from Carrefour website

• Concept also popular in Germany and growing the UK.

• Implications:

Defend threat of pure play e-commerce retailer.

Limits impulse opportunities.

• 320 outlets at the end of 2010 with net sales of

EUR8.44 billion (USD11.18 billion).

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5. The Future of Private Label


5. The Future of Private Label

1. Will continue to grow post recession

2. Managed as a brand by the retailer

3. Consumer endorsement

4. Transparency

5. Niche and higher end products

6. Best practices

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5. The Future of Private Label – Consumer Endorsement

Leading grocery retailers looked to launch, or re-launch, private label

ranges in 2011.

With shoppers looking for ‘value’ in developed markets, retailers looked to develop new

niche and premium ranges to target specific consumer groups.

France

Casino: healthy living range Bien

pour Vous! (food & non-food).

UK

Walmart’s Asda:

Chosen by You

Carrefour: Halal PL

USA

Walgreens: grocery

umbrella PL Nice!

South Africa

Pick n Pay: Finest

premium PL

SEP 2010 OCT 2010 DEC 2010 JUN 2011 AUG 2011 SEP 2011 OCT 2011

DEC 2011

Austria, Italy, Slovenia

UK

UK

USA

SPAR (Austria):

SPAR Premium

John Lewis Waitrose: mid-price

healthy food PL – Love Life.

Walmart’s Asda:

Chosen by You Scotland

Kroger: The Truly

Awesome

Tesco: Tesco Venture Brands

Rewe Group: non-food PL - Vivess

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5. The Future of Private Label – Transparency

Shopper engagement requires new levels of transparency.

In 2011, Aldi Germany proactively

offered traceability

information for fresh meat.

Asda (Walmart) in the UK embracing

transparency installing webcams with

the live feeds viewable to the public.

Ito-Yokado (Seven & I) in

Japan offers shoppers the

ability to scan a QR code on

its private label products.

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5. The Future of Private Label – Best Practices

Private Label Marketing ideas from Europe.

• PL food concessions cropping up in new

places, e.g. inside other retailer stores,

workplaces, theme parks, etc.

• Social media interaction – using as a focus

group for suggestions, voting for products,

allowing fans/followers to sample, input

into marketing campaigns, etc.

• Shop-in-shop concept for private label, e.g. Ocado.

• Amazon – private label shops within Amazon sites,

taking care of logistics on behalf of other retailers,

e.g. Migros in Germany, dm in Germany, ELC in UK.

• E-commerce sites suggesting PL alternatives to

products in basket, e.g. Sainsbury’s Switch & Save.

• Promote heritage of PL – similar to M&S campaign

or Sainsbury’s tying up with Kellogg’s to introduce

retro packaging for Diamond Jubilee.

• Venture brands going into other stores as ‘brands’,

e.g. Tesco venture brands could do this.

Kellogg’s brought in retro

packaging to coincide with

the Diamond Jubilee.

Renowned British

illustrators were asked

by M&S to design

commemorative tins for

the Diamond Jubilee.

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5. The Future of Private Label – Best Practices

Private Label Marketing ideas from Europe.

• Collaboration between PL brands and

manufacturers, e.g. coffee maker manufacturer

including coupon in box for free or money-off

Sainsbury’s PL coffee.

• Trusted PL brands continuing to branch out into

becoming service providers, e.g. John Lewis

insurance/holidays, Tesco Mobile/banking.

• Loyalty points: retailers could offer double points

for PL brands.

• Celebrity endorsement continuing to evolve,

e.g. Delia Smith & Heston Blumenthal at Waitrose,

Gok Wan at Sainsbury’s.

• Television advertising for private label as if it were a

premium brand – mini series campaign linking to social

media or more comparative advertising campaigns, e.g.

Aldi’s “I like this ketchup but I also like this one.”

• Product placement: Very.co.uk sponsored X Factor –

dressed contestants, allowed purchasing via QR

codes/website/mobile app.

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5. The Future of Private Label – Implications

Change =

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United Kingdom:

AirW1

20 Air Street

London

W1B 5DN

UK

Germany:

Dreieichstrasse 59

D-60594 Frankfurt am Main

Germany

USA:

1450 American Lane

Suite 1400

Schaumburg

IL 60173

USA

China:

10-1-202

88 Tongxing Road

Qingdao 266034

China

Japan:

c/o INSIGHT INC.

Atami Plaza 1401

Kasuga-cho 16-45, Atami-shi

Shizuoka 413-0005

Japan

T: +44 (0)20 7715 6000

F: +44 (0)20 7715 6001

T: +49 (0) 69 96 21 75-6

F: +49 (0) 69 96 21 75-70

Tel: + (1) 224 698 2601

Fax: + (1) 224 698 9230

T: +86 (0)532 85981272

F: +86 (0)532 85989372

T: +81 (0) 557 35 9102

F: +81 (0) 557 35 9103

Researched and published by Planet Retail Limited

Company No: 3994702 (England & Wales) - Registered Office: AirW1, 20 Air Street, London, W1B 5DN.

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