cirkleblog

IGD THE BIG DEBATE 2016 HIGHLIGHTS

PR Debate

I was really pleased to be able to attend the IGD’s Big Debate last week (the IGD is a research and training charity that works collaboratively with the food and grocery industry to deliver the needs of the public). The annual ‘Big Debate’ brings together many of the grocery industry’s business leaders to discuss key topics affecting the trade and this year it focussed on balancing shopper and business needs. Here are some of my top take-outs:

BREXIT BRIEFING:
Posing the question of how Brexit is affecting the grocery industry, the IGD Chief Economist, James Walton, cited that key indicators are actually positive, and for now, business investment is stable. We are still seeing rising wages and restrained inflation. The reason for this is constitutional stability – there was no actual change until the Prime Minister announced a timeline to trigger Article 50. The sterling depreciation we have seen has been dramatic – but there could be a wider set of drivers at work. The potential upside of this currency weakness is an increase in grocery export. He concluded by saying we are on the verge of a fourth industrial revolution, with the rise of artificial intelligence, bio technology, digital technology and robotics.

MEANINGFUL SHOPPER RELATIONSHIPS:
IGD’s Chief Executive, Joanne Denney-Finch, explored the link between emotional and rational shopper decisions with the big engines of growth being: Discount, Online and Food to Go. She believes the fastest growing formats are the ones that trigger positive emotions and IGD research into what drives shoppers’ emotional involvement with grocery business revealed five emotional levers: 1. Control, 2. Desire, 3. Belonging, 4. Immersion, 5. Freedom. Grocery shopping scores highly for ‘control’ but low for ‘immersion’ and ‘freedom’ – and a key theme of the day was the opportunities for retailers and brands to create more in-store excitement in order to compete with online shopping, which scores higher across all five emotional levers.

The current industry ‘battlegrounds’ were highlighted as: Cook at Home Vs Food to Go AND In-store Vs Online. Opportunities include:

  • Creating dramatic, in-store installations to surprise and disrupt shoppers
  • Talking to shoppers about more than just price
  • Adding excitement to ‘Food to Go’
  • Exclusive store products designed for customers e.g. unique packaging
  • More opportunities for shoppers to try, taste and recommend
  • Quirky social media campaigns to add personality
  • Subscription ordering
  • New ways to showcase products and take the chore out of shopping

KEY SPEAKER OUT-TAKES:
Mike Coupe, Sainsbury’s CEO, believes the industry has to adapt to the speed at which people can order products at home. Who would have predicted Uber becoming a competitor to the fresh grocery industry?
Matt Hill, European President of Kraft Heinz, believes innovation is more important than ever but harder than ever. He advises retailers to be more selective with their product ranges and place fewer, but bigger bets and cited opportunities as: Don’t lose focus on innovation in the search for efficiency; Interrupt shopper autopilot by creating in-store theatre; Balance the corporate uniform in-store.
Michael Fletcher, Commercial Director for the Co-operative, stressed the importance of shopper missions in convenience retail. He reminded us that 40% of people don’t know what they are going to eat ‘tonight’. He concluded that price is not the only key factor in convenience shopping – other primary drivers such as quality of fresh food and having what shoppers want in store are also important. His advice for the convenience industry included: Interaction with the community is key; Have the right range in the right store; Support depth, not breadth; Use the right instore promotions and mechanics; Work with retailers to build relationships with the community.
Matt Davies, Tesco CEO talked from the heart about Tesco’s pledge to keep prices down, empower staff, and to stop food waste. The Tesco strategy is to put customers and colleagues “right at the heart” of its business. Matt revealed Tesco prices are 6% lower than they were two years ago – pre-Brexit.
Blas Maquivar, President UK Chocolate and Global Retail at Mars, talked of seismic shifts in the industry and how digital commerce is growing. Unsurprisingly, the key issue affecting his business is healthy eating. He believes manufacturers, retailers and the government need to work together as “an eco-system” to tackle healthy eating goals.

CREDIBLE AND CONSISTENT MESSAGING
The inspiring retail academic, Dr Dimitrios Tsivrikos announced five key insights:

  • Romance is dead, long live one night stands. Emotional shopping is not related to a marriage and is more likely to be around instant gratification
  • Fantasy is dead, long live functionality
  • Authority is dead, long live equality – brands need to be facilitators, rather than curators
  • Preferences are dead, long live habits. We need to stop thinking in terms of shopper loyalty
  • High volume is dead, long live relevance

His three specific components for success are:

  • Experience – this goes above and beyond price
  • Memory – making an association or habit that makes the shopper think about you
  • Engage – communicate in a deeper and more meaningful manner

DATA AND CREATIVITY
This session focused on the use of data and how to balance this with creativity.

Google Sales Director, Martijn Bertison , said the business focusses on three retail partnership areas: Show up (where your customers are); Wise up (think about cross-device methods e.g. desktop to mobile); Speed up – invest in new technology to become even faster

In a nutshell, my top 8 take outs were:

  • Digital plays a growing role – both in communication to shoppers and supporting retail teams
  • There is a rising trend of immediacy and same day delivery which is driving new, customer led strategies across the industry
  • There is a clear need to evolve with the complex offering of convenience
  • Retailers need to understand and cater for specific shopper missions
  • The in-store experience needs to catch up with the times and evolve, as online has done so drastically
  • Industry heavyweights such as Mars are calling out for collaboration between like-minded partners and competitors to work together on issues such as healthy eating
  • Shoppers are bored and opportunities exist to surprise, excite and disrupt them both in-store and online
  • Real time marketing and exciting, new technologies are the future

Sian Kilgour
Senior Associate Director

Leave a Reply

Your email address will not be published.