It’s a tough time to operate hypermarkets and supermarkets. There is a shift in shopping behavior away from big ‘one stop shops’ to more fragmented shopping patterns. And while online is one of the major catalysts of this behavior, painting this as a battle between online and offline stores is misleading. Specialists are growing. Discounters are growing. Convenience stores are growing. Shoppers are now shopping in very different ways. Clearly it is necessary for big retail to respond, and often the solutions proposed are hi tech, omnichannel style solutions. And embracing technology is certainly one way to improve the retail experience. But not always. The need is to be shopper-centric. To understand what shoppers want, and to find a way to deliver this to them. In this post, I’m going to share an example of retail responding by understanding and meeting shopper needs – rather than applying a hi-tech Band-Aid.
Retail Experience – Avoiding the discount trap
Around the world, the beer market is evolving. Craft beers, regional beers, specialty ales – are all revolutionizing a category that, to the casual observer, was rapidly becoming commoditized. Promotion aisles were jammed with deals on household brands, and a shopper could be forgiven for simply going to a store and buying whatever beer is on deal. Beer in many markets faces this challenge – a painful situation for brands and retailers alike. Promotions drive down profitability, but without promotions, sales crash (or a competitor steals the sale). So how to get out of the trap? How to create a better retail experience which doesn’t rely wholly on discounts?
Retail Experience – Understanding what consumer and shoppers want
Russian brewers and retailers (I don’t know who started it) have found a solution. Draft beer. Across the country brew shops have opened where draft beer can be bought to be taken home. Consumers like it because they see it as authentic, and fresh. Small retailers are finding a niche, where high levels of promotions are not required. The retail experience is simple and basic, but feels authentic.
But what about the big retailers? How does this help them? The answer is simple. They sell draft beer in hypermarkets. Yes – as you walk into the store, there in the center of the main aisle is a bar, with beer taps. This isn’t for on premise consumption (which is a shame, all these store checks make me thirsty!) but for take home. But there don’t appear to be promotions, volumes are large, and traffic is brisk. At a stroke, the category offers a more engaging, interesting, and authentic retail experience. I didn’t want beer, but I had to buy some just to try! And key to category profitability, this segment doesn’t appear to be promoted, and certainly not as much as regular canned or bottled beer.
Retail Experience – Key learnings
This is the age of the shopper – Online has triggered a Shopper Revolution – shoppers are getting more demanding, and are seeking new places to meet those needs. Understanding shoppers, as well as consumers, is critical to creating success at retail.
It isn’t always about hi tech and omnichannel – The knee jerk response to install iPads and open an online store isn’t always the answer (though I do like the idea of ordering draft beer online to be delivered at home!). While the technology to deliver a quality beer into the bottle without a mountain of froth is clever, it isn’t hi-tech, omnichannel online technology. Tech has its place only if it adds genuine value to shoppers.
Retailers will do all sorts of things if there is value in it. I know persuading retailers to support your ideas is hard. But to those who believe they could never get their biggest retail customers to change anything in-store, this is a great example. Retailers will do pretty much anything as long as it represents value to them.
Great consumer insight, great shopper insight, and a clear value proposition for the retailer is a winning recipe for a better retail experience. To learn more about how to create piece together the consumer, shopper and retailer parts of your commercial strategy, check out Shopper Marketing Experts now. It has great learning resources, videos, quizzes, podcasts, webinars and more – much of which is free. Check it out now.
