international retail trends ccgd west 2010
DESCRIPTION
TRANSCRIPT
big international retail trendsand how Canadian retailers and suppliers
can get on the winning edge.
presented by
5
SINS www.salesisnotsimple.com
About SINS
Account Management, Trade Marketing, Retail MarketingSales Leadership
Training & Development:
Go-To Market StrategyStructure and Development
Strategy Consulting:
Canadian CPG IndustryInternational Retail
Industry Knowledge & Expertise:
Helping our clients sell more - more profitably
today’s game plan
the 5 big international trends
what you can do to leverage them?- retailer and supplier perspectives
Q&A / Discussion
SINS www.salesisnotsimple.com
5 big international retail trends.
SINS www.salesisnotsimple.com
#1 getting bigger + going global
SINS www.salesisnotsimple.com
6
7
8
9
10Source: 2010 Global Powers of Retailing - Deloitte
the world’s ten biggest retailers...
1
2
3
4
5
SINS www.salesisnotsimple.com
Source: 2010 Global Powers of Retailing - Deloitte
just how big the biggest are...
Retail Sales Rank 2008
Company CountryRetail Sales
(Millions $USD)# of Countries
1 Wal-Mart Stores Inc. US 401,244 15
2 Carrefour SA France 127,958 36
3 Metro AG Germany 99,004 32
4 Tesco PLC UK 96,210 13
5 Schwarz Group (Lidl) Germany 79,924 24
6 The Kroger Co. US 76,000 1
7 The Home Depot US 71,288 7
8 Costco Wholesale US 70,977 8
9 Aldi GmbH Germany 66,063 18
10 Target Corp. US 62,884 1
SINS www.salesisnotsimple.com
2000 2008
1,152
576
Total Turnover (billions) of Top Ten Retailers
2000 2008
155
96
Number of Countries
The Biggest Retailers are Getting Bigger Through Globalization & Consolidation
Sources: 2002 Global Powers of Retailing - Deloitte 2010 Global Powers of Retailing - Deloitte
+100% +62%
SINS www.salesisnotsimple.com
Canada’s ten biggest retailers...
Source: 2010 Global Powers of Retailing - Deloitte
6
7
8
9
10
1
2
3
4
5
SINS www.salesisnotsimple.com
Retail Sales Rank 2008
Company Retail Sales (Millions $USD) Global Rank
1 Loblaw Companies 22,208 37
2 Alimentation Couche Tard 15,781 50
3 Empire Company Ltd. 13,305 67
4 Metro Inc. 10,644 81
5 Shoppers Drug Mart 8,896 102
6 Canadian Tire Corp. 7,837 112
7 Hudson's Bay Trading Co.** 7,591 118
8 Katz Group Inc. 6,278 137
9 Jim Pattison Group 3,720 207
10 RONA Inc. 3,533 230
Source: 2010 Global Powers of Retailing - Deloitte
just how big the big canadian retailers are...
** American owned
SINS www.salesisnotsimple.com
Retail Sales Rank 2008
Company Retail Sales (Millions $USD) Global Rank
1 Loblaw Companies 22,208 37
2 Alimentation Couche Tard 15,781 50
3 Empire Company Ltd. 13,305 67
4 Metro Inc. 10,644 81
5 Shoppers Drug Mart 8,896 102
6 Canadian Tire Corp. 7,837 112
7 Hudson's Bay Trading Co.** 7,591 118
8 Canada Safeway 6,400
9 Katz Group Inc. 6,278 137
10 Jim Pattison Group 3,720 207
11 RONA Inc. 3,533 230
Source: 2010 Global Powers of Retailing - Deloitte
just how big the big canadian retailers are...
** American owned
SINS www.salesisnotsimple.com
Sources: 2010 Global Powers of Retailing - Deloitte
SINS www.salesisnotsimple.com
0
125000
250000
375000
500000
Wal-Mart Carrefour Canada Top 10 Metro Tesco Lidl
Sources: International Monetary Fund 2010 Global Powers of Retailing - Deloitte
SINS www.salesisnotsimple.com
Rank CountryCountryGDP 2008
Millions USD
1 United States 14,441,425
2 Japan 4,910,692
3 China 4,327,448
4 Germany 3,673,105
5 France 2,866,951
6 United Kingdom 2,680,000
7 Italy 2,313,893
8 Russia 1,676,586
9 Spain 1,601,964
10 Brazil 1,572,839
11 Canada 1,499,551
Top 10 Retailers
7
5
5
3
4
6
3
2
4
2
3
Sources: International Monetary Fund 2010 Global Powers of Retailing - Deloitte
SINS www.salesisnotsimple.com
Rank CountryCountryGDP 2008
Millions USD
11 Canada 1,499,551
12 India 1,206,684
13 Mexico 1,088,128
14 Australia 1,013,461
15 South Korea 929,124
16 Netherlands 876,970
17 Turkey 729,983
18 Poland 527,866
19 Indonesia 511,765
20 Belgium 506,183
Top 10 Retailers
3
2
3
2
2
3
3
4
1
4
how to get on the winning-edge...
✓benchmark yourselves against winning international formats.✓attend more international conferences to expand your horizon.
Retailers:
✓develop contacts with your colleagues around the world to bring international best practices to your customer locally.
Suppliers:
✓subscribe to several on-line news services to stay in touch with global developments in retailing.
Together:
SINS www.salesisnotsimple.com
#2 building great brands
SINS www.salesisnotsimple.com
1 value-added private labels
2 extension of brands in related services
3 variety of store formats
4 corporate citizenship
pillars of great retail brand-building
when it comes to brands, retailers are shifting from the “distributor” to the “builder”.
strong retail brands are the passport to global growth
SINS www.salesisnotsimple.com
#2 building great brands
examples of value-added private label brands at tesco
SINS www.salesisnotsimple.com
#2 building great brands
extending the brand into retail services at tesco
SINS www.salesisnotsimple.com
#2 building great brands
offering a variety of store formats at tesco
SINS www.salesisnotsimple.com
#2 building great brands
a new british (branded) invasion at fresh & easy
SINS www.salesisnotsimple.com
#2 building great brands
corporate citizenship as a branding vehicle at tesco
SINS www.salesisnotsimple.com
#2 building great brands
SINS www.salesisnotsimple.com
#2 building great brands
how to get on the winning-edge...
✓ evaluate the consistency of your brand image to the individual shopper.✓ increase efforts to take your brand “beyond the store”.
Retailers:
✓ focus on true innovation to drive growth while avoiding SKU sprawl.✓ connect your marketing teams with those inside the retailer.
Suppliers:
✓ identify category or cross-category opportunities that are able to build equity for both the retailer and supplier brands.
Together:
#3 understanding the individual shopper
SINS www.salesisnotsimple.com
retailers are gearing up for customer relationship management 2.0 in a push to understand shopper behavior
SINS www.salesisnotsimple.com
#3 understanding the individual shopper
average customers don’t exist. success lies in knowing individuals.
- Dunnhumby
tesco club card:launched in 1995
quick facts:10+ million active households in the UK.
segments consumers on behaviour + valuemultidimensional segmentationeach individual shopper
products assigned scores and attractiveness ratings for each shopper segment.
shopper-profile-tailored communication and promotions
coupon redemption rates of 20-40%.
SINS www.salesisnotsimple.com
#3 understanding the individual shopper
Lifestage Profitability Store Format
LifestyleShopping
Habits
Promotional Promiscuity
Brand Advocacy
tesco shopper segmentation
SINS www.salesisnotsimple.com
#3 understanding the individual shopper
the receipt:merely data
April 12, 2008 at 21h30
Customer 664433 purchased in store 115 (Express)
1 item 102387 - microwave ready meal, Spicy Mexican flavour, Priced at £2.99
1 item 114576 - White Wine, Chablis, priced at £5.99
2 x item 329800 - prepacked salad, priced at £0.99 (promotion)
SINS www.salesisnotsimple.com
#3 understanding the individual shopper
the card (model) reveals:true insight
Mrs Smith is a young adult and one of our Premium shoppers. She uses Watford Hypermarket for major monthly shops.She uses Covent Garden Metro for daily requirements. She often shops late in the evening and buys upmarket products. She is particularly loyal to her cat food brand and fine fabric washing powder. She buys Hello magazine and sometimes Country Life. She is happy to be contacted for research. Promotions are important to her, but not Value lines.
SINS www.salesisnotsimple.com
#3 understanding the individual shopper
SINS www.salesisnotsimple.com
#664433
#3 understanding the individual shopper
SINS www.salesisnotsimple.com
#3 understanding the individual shopper
tailored promotionbased on life-stage
SINS www.salesisnotsimple.com
#3 understanding the individual shopper
Dunnhumby &Metro partnership
SINS www.salesisnotsimple.com
Source: Globe and Mail - Nov 19, 2009
#3 understanding the individual shopper
SINS www.salesisnotsimple.com
#3 understanding the individual shopper
how to get on the winning-edge...
✓ think beyond points and discounts.✓ use your CRM tool as a basket builder instead of a trade fund generator.
Retailers:
✓ bring consumer insights to the table that builds on shopper understanding.✓ develop “shopper marketing” capabilities within the organization.
Suppliers:
✓ identify the overlaps between the key shopper segments in the store and the target consumer of the brand and intensify shopper marketing efforts.
Together:
#4 being conscious of their footprint
SINS www.salesisnotsimple.com
#4 being conscious of their footprint
going “green” has not gone away because we are dealing with the downturn
Consumer Goods Forum “top of mind” survey 2009
Source: Consumer Good Forum Press Release: Feb 2, 2009
#4 being conscious of their footprint
examples of green prioritization at tesco
#4 being conscious of their footprint
examples of green prioritization at walmart
concentrated laundry detergentmandated move to concentrated formulas
savings: 100 million gallons of water 95 million pounds of plastic resin 125 million pounds of cardboard.
extended paper roll lifeco-development (P&G) of toilet paper and paper towel products with more sheets per roll.
savings: 89.5 million cardboard cores 360,000 pounds of plastic 54,000 gallons of diesel.
SINS www.salesisnotsimple.com
#4 being conscious of their footprint
everyone’s keeping an eye on walmart...
SINS www.salesisnotsimple.com
Source: Wall Street Journal - Jan. 18, 2010
#4 being conscious of their footprint
two great Canadian examples...
SINS www.salesisnotsimple.com
#4 being conscious of their footprint
SINS www.salesisnotsimple.com
how to get on the winning-edge...
✓ engage shoppers beyond reusable shopping bags✓ showcase your efforts and successes in an easily accessible way
Retailers:
✓ read your organization’s “CSR” report and understand it’s impact locally.✓ find areas of common interest between your company and your customer.
Suppliers:
✓ develop common CSR goals as part of the business planning process and scorecard your results with the various stakeholders.
Together:
#5 efficiency spawns a new format
SINS www.salesisnotsimple.com
#5 efficiency spawns a new format
2000 2008
102,522
29,082
52,422
11,300
50,100
17,782
Total Turnover of Aldi / Lidl
Aldi Lidl Total
the “hard discount” format has already taken Europe by storm.
Source: 2002 Global Powers of Retailing - Deloitte 2008 Global Powers of Retailing - Deloitte
major players:
founded: germany 1930’s7,000 european stores
founded: germany 1940’s8,200 stores
SINS www.salesisnotsimple.com
#5 efficiency spawns a new format
hard discount stores examination
1 limited assortment (approx. 1500 SKUs)
2 high penetration of private label
3 small, consistent store format (approx. 15,000 sq. ft.)
4 shelf-ready packaging
5 display-ready pallets
6 store-warehouse clustering
7 no in-store deli or bakery
success factors for hard discount
SINS www.salesisnotsimple.com
#5 efficiency spawns a new format
hard discount stores LIDL
SINS www.salesisnotsimple.com
#5 efficiency spawns a new format
hard discount stores ALDI
SINS www.salesisnotsimple.com
#5 efficiency spawns a new format
ALDI is already at our border...
Aldi Sud launched in the US in 1976.
Over 1000 stores in 30 states.expanded store count during economic downturnAlso owns “Trader Joes” with over 300 stores
USASINS www.salesisnotsimple.com
#5 efficiency spawns a new format
SINS www.salesisnotsimple.com
how to get on the winning-edge...
✓ have a contingency plan in place to deal with a rapid Hard Discount launch.✓ focus on brands and value added promotions.
Retailers:
✓ consider developing an unique product offer for Hard Discount.✓ link with your international colleagues to learn from their experience.
Suppliers:
✓continue to push inefficiencies out of the supply chain in order to make the Canadian industry less attractive to potential competitors.
Together:
Q: what were all those trends again...?
A: the 5 big international trends are...
#1 getting bigger + going global
#3 understanding the individual shopper
#5 efficiency spawns a new format
#4 being conscious of their footprint
#2 building great brands
SINS www.salesisnotsimple.com
some reading recommendations from sinshot
SINS www.salesisnotsimple.com
thank you!
SINS www.salesisnotsimple.com
questions?
SINS www.salesisnotsimple.com
4804 16 Street SW
SINS www.salesisnotsimple.com