Shoppers of the future 27 th June 2018 Vanessa Henry Shopper Insight Manager
“The future is already here… … it’s just not evenly distributed” William Gibson, The Economist, 2003
Shopper’s fundamental needs don’t change… VALUE TIME CHOICE Don’t make me Help me find Help me get spend more the products quality at fair time than I I want to buy prices want to Source: IGD Shopper Research
…but expectations and behaviours do change 5 MEGA-TRENDS SET TO SHAPE OUR INDUSTRY
The next generation: ‘influencer shoppers’ • YOUNGER • HIGHER AFFLUENCE 25% • 1000+ SOCIAL MEDIA FOLLOWERS of the British • ONLINE REVIEWERS grocery shopper population • EARLY TECH ADOPTERS • ENGAGE IN FUTURE TRENDS
Shoppers will… 1. BE TIME-OPTIMISERS The grocery shopping experience will have to work harder so shoppers can optimise and make the most of their time.
We’re choosing to be busier…we’re not actually busier! £5bn 28 6 2 The number of The number of The number of times we check hours we spend hours we spend our phones each online per day on social media day each day value of the UK fitness industry
More enjoy the shopping experience 58% ENJOY SHOPPING 39% DISLIKE SHOPPING
Engagement or efficiency: World foods where does your category Baby food Higher level of enjoyment sit? Wine Skincare products Spirits Cakes / pastries Confectionery Fresh fruit Ice-cream Haircare Chilled prepared meats Bread Lower levels of enjoyment Table sauces Dental care Butter / spreads Breakfast cereals Pasta, rice, pulses Frozen vegetables Household cleaning Fresh poultry Milk Household paper
Subscriptions: categories where shoppers can gauge consumption …say in the next 2-3 years they’ll be signing up to an online subscription 24% service to get grocery products they use regularly delivered to them automatically
Integrating offline with online
Shoppers will… 2. BE MORE HEALTH CONSCIOUS Health and wellbeing will grow in importance with subtle differences owing to individual motivations.
Health is high up the shopper agenda, but… Current barriers to healthy eating: • Perceived lack of value for money of healthy eating 85% • Lack of motivation …of shoppers claim to be • Insufficient knowledge and actively trying to improve education some part of their diet • Lack of time
‘Look good’ motivations driving health agenda for younger shoppers 42% of 18-24 year old shoppers say in the next 5-10 years they will be more likely to eat healthily to look good (vs 24% of all shoppers)
How can you unlock the ‘selfie generation’?
What impact can influencers have on sales…? Sales at Waitrose are up over 60%. Driven by increased interest in fermented foods and their purported benefits. Many A-listers are also reported to be apple cider aficionados with Jennifer Aniston, Katy Perry and Victoria Beckham all talking about their love for the vinegar. (May’18)
Shoppers will… 3. EMBRACE PERSONALISATION Shoppers in the future will be open to a more personalised food and grocery experience, but only if there is a clear benefit to them with minimal effort .
Executed well…personalisation could be game changing Drive better conversion rates Improve shopper retention Create useful marketing data
When you talk to shoppers…it’s a no-brainer if it’s on their terms 56% of Influencer Shoppers say If you feel like you’re getting they will share more data something back then it’s ok. If they’re with supermarkets in the taking my data but then every now future in order to get a and again they send me an offer. more personalised shopping experience Then it’s worth your while.
Online provides the platform for personalisation
Smartphones could be key to unlocking personalisation in-store 44% 53% ‘My mobile phone is the ‘I’d like to receive personalised offers sent one thing which connects so many aspects of my life to my phone when I’m in together’ different parts of a store’
US retailers investing in personalisation in-store
Shoppers will… 4. BE MORE EXPERIMENTAL Shoppers in the future will increasingly experiment with their shopping and meal preparation to broaden their repertoires.
Increasingly open to trying new things 80% 45m Open to trying 9.3m Number of new / different holiday visits Number of people food and non-food abroad by UK living in the UK who products, services were born outside residents in and experiences the UK in 2017 2016
What’s different is how we’re finding inspiration and how quickly Source: Knorr
Requests for NPD: where World foods Baby food does your category sit? MORE NPD REQUEST Confectionery Biscuits Cheese Cooking sauces Ice-cream Chilled ready meals Crisps & snacks Bread Table sauces Pasta, rice, pulses FEWER NPD REQUESTS Canned products Breakfast cereals Coffee Butter / spreads Tea Dental care Pet food Medicine Milk Household paper
Shoppers will… 5. BE MORE SOCIALLY CONSCIOUS Shoppers will want to make sustainable and ethical choices, but only if other needs are also satisfied.
Shoppers want to ‘do the right thing’ but in reality… ‘Is it available?’ 74% 60% 38% ‘How much?’ of all shoppers say they’ve of under 35s say concern become more aware of the for the environment will ‘Will it work / environmental impact of be more important to does it taste plastic packaging in the them in the next 5-10 last 12 months years good?’
Tipping points: ‘Blue Planet’ effect I was quite surprised that my son said at university more of his friends watched that David Attenborough planet Earth than some of the football matches. They were glued to it.
Sustainability set to resonate with a growing number 54% of shoppers say recent TV shows, especially David Attenborough’s Blue Planet, have inspired them to make changes to support the environment. 38% of Influencer Shoppers say they will always buy environmentally sustainable food and grocery products in the future.
‘Blue Planet II effect’: industry taking action to stay ahead
How will the physical store evolve? RELEVANT EFFICIENT DIFFERENT • One store, multiple missions • Drive operating efficiencies • Ranging • Stay ‘on trend’ • Reduce shopper ‘friction’ • Experience • Provide fun and enjoyment • Help save time & money • Inspire and interact • Personalisation • Easy to shop any channel • Mission focus
Relevant to multiple shopping missions Promotional mission Non-grocery mission Entrance Entrance Entrance Entrance Top-up Bigger basket Offers power aisle Non-food
Efficient ways to operate the store Source: Walmart press release
Differentiate with innovative products and displays Albert Heijn Source: IGD Research
The online store of the future…it’ll look like this PERSONAL FRICTIONLESS SMART EFFICIENT INVISIBLE Shoppers’ Smart personal More efficient for Frictionless At times it will be personal micro assistant shoppers offline & online invisible store experience
Personalisation: content, media, products and services ££ - £££ £ - ££ Source: IGD Retail Analysis, Ocado
Smart: Amazon & Unilever
Efficient: whenever, wherever fulfilment Amazon Key
Frictionless: offline and online experiences…payment via social media
Invisible: shoppable digital content
IGD Futures – www.igd.com/igdfutures Shoppers of the Physical store of Online store of future the future the future
Are you planning for the future? Are you meeting core needs by doing the basics, exceptionally well? Think range, availability, category architecture, value Are you developing shopper experiences that drive emotional engagement? This could be about engagement but also efficiency Are you investing in test and learn activity with target shoppers? Use ‘influencer shoppers’ to assess appetite early on Do you understand the value of data? Invest in data and follow tech adoption. Influence the AI. Make your digital media shoppable Are you staying ahead with future trends relevant to your brands? Take a total category approach to drive growth
Any questions? Keep in touch! Vanessa.Henry@igd.com @vanessa_IGD
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