retail myths & realities - boussias conferences...together and making them useful is...
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Copyright © 2019 The Nielsen Company. Confidential and proprietary.
RETAIL MYTHS & REALITIES
Vicky GrigoriadouPresident & Managing DirectorThe Nielsen Company Greece
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RETAIL BECOMES MUCH MORE COMPLICATED
These drivers of change are not exhaustive and used as examples; often these drivers of change are linked and symbiotic
HOUSEHOLD SIZE
AND STRUCTURE
INDUSTRY/BUSINESS
INVESTMENT AND
INNOVATION
CONSUMER VALUES
AND ATTITUDES
MEDIAPOPULATION
POLICY AND
LEGISLATION
DISRUPTIVE CHANGES
can happen at any time to
dramatically affect dynamics
and drivers
TECH ADOPTION DEMOGRAPHIC
CHANGES
URBANIZATION
AND CITY SIZE
ENVIRONMENTAL
CHANGES
RETAIL LANDSCAPE
ECONOMIC/INDUSTRY
DEVELOPMENT & GDP
INFRASTRUCTURE
AND ACCESS
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CHALLENGES ABOUND IN THE GLOBAL RETAIL ENVIRONMENT
• Cross-Channel & Digital are revolutionizing the way we do business
• Competition between formats is getting harder (HM, SM, Convenience, Discounters,
Wholesalers, Specialized stores)
• A new generation of shoppers – informed and demanding, value driven and
connected – are taking control with their unprecedented choice, power and influence that they have
• More localized & personalized assortment Vs. traditional standardized assortment
• Volume of available data – structured and not – is explosive. Connecting them
together and making them useful is increasingly complex.
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RETAIL MYTHS
#1 #2 #3 #4
“Emerging Markets are not the
source for future growth anymore”
“Bigger = better”“Promotions are the best way to generate sales”
“The grocery space doesn’t need
to worry about eCommerce because
people won’t buy food online”
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Copyright © 2019 The Nielsen Company. Confidential and proprietary.
MYTH #1“Emerging Markets are not the
source for future growth anymore”
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THE REALITY: GROWTH IS SLOWING IN DEVELOPED MARKETSEMERGING MARKETS WILL STILL PROVIDE THE FASTEST GROWTH OPPORTUNITY
3,0%
1,9%
4,0%
2,1%
3,6%
1,8%
EmergingMarkets
DevelopedMarkets
Source: The Conference Board Global Economic Outlook 2016 2021-20252017-20202016
2021-2025 2017-2020 2016
Middle Class
3.2 BILLION by 2020
Urban Populations
TWO-THIRDSwill live in urban areas by
2020
Millennials
24%of the current population
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Denmark
Finland
Poland
France
Germany
SpainPortugal
Greece
ItalyTurkey
Switzer-land
Austria
CzechRepublic
Estonia
Latvia
LithuaniaBelarus
Ukraine
RomaniaHungary
SlovakiaMoldova
Bulgaria
Russia
Ireland
Great Britain
Monte-negro
Serbia
SloveniaCroatia Bosnia-
Herze-govina
N.Mace-donia
Albania
Norway
Nether-lands
Belgium
Sweden
Growth Rate above Europe Average
Growth Rate between “Zero” and Europe Average
Growth Rate below “Zero”
Europe Nominal Growth: +3,7%
Q3 2018 FMCG GROWTH IN EUROPE (Vs. Q3 2017)
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THE SHELF IS MORE IMPORTANT THAN EVER … DID YOU KNOW THAT MILLIONS SPENT EVERY
YEAR TRYING TO GET THE SHELF RIGHT?
Average cost to reset shelves per store, per year
With 85% of shelf resets driving zero or negative category performance
While 59% of store shelves are not compliant with the planogram finally
At the same time…
…there are many new products for a much less space…and consumers have more choices than ever
Source: Category Management Association, CatMan 2.0 Report “Driving Growth in a Shopper-Centric World”, 2016
$50K
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THE OPPORTUNITY: WIN IN EMERGING MARKETS CONSISTENT LONG TERM PERSPECTIVE REQUIRED
Growing population & rising household incomes
Space aware Assortment: WIDE & DEPTH for PREMIUM as well as for
BASIC products, EXCLUSIVE and SPECIALIZED (+Health prds +Local
prds + Innovative prds)
Spending power is already there! Capitalize / Monetize NOW!
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Copyright © 2019 The Nielsen Company. Confidential and proprietary. 10
MYTH #2“Bigger = Better”
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THE REALITY: RETAIL LANDSCAPE IS CHANGING
CONVENTIONAL WISDOM
• Consumers want a large store where
while enjoying the shopping experience
they can find everything they need in one
trip
REALITY
• New Shopper reality drive the need for
convenience and proximity
• Big stores can be hard to shop
• Small stores provide less complexity and
less temptation
• For top up & fresh, global shoppers make
3 trips to the store per week on average
• eCommerce offers new options
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TRADITIONAL TRADE REMAINS KEY IN EMERGING MARKETS
Traditional Trade
Europe
8% Asia-Pacific
38%
4%
LatinAmerica
34%
Africa /Middle East
42%
North America
0%
Source: Nielsen Retail Measurement DataNote: Value in USD, adjusted for inflation – latest 12 monthsCollection dates vary by country and category
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TRADITIONAL TRADE FITS CONSUMER LIFE
Shoppers make at least
28 VISITS PER MONTHto traditional trade around
the world
68%arrives
walking
86%goes alone to the traditional
trade
And spends only
5 minutes
per visit
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Greece Modern Trade / Key Accounts 2018 vs 2016
Retail Space Number of
Stores
+5%
pp
er &
STORERetailer & Manufacturer & Sh
etailer & Manufacturer & Shoper
Average
Store size
+7% -2%
RETAIL DEVELOPMENT
21% change
in Assortment
Source:
Nielsen Retail Measurement service | Categories: Milk, Cheese, Yogurt, Chocolates, Soft Drinks, Beers, Juices, Water, Wine, Pasta, Instant Coffee, Greek Coffee, Capsules, Snacks, Pet Food, Sport Drinks,
Laundry, Diapers, Fabric Softeners, Sanitary protection, Shampoos, Household Cleaners, Bath & Shower, Hand Dish, Toothpastes, Toothbrushes, Deodorants, Facial care, Air Fresheners, Cosmetics
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THE OPPORTUNITY: CREATE CONVENIENCEON THE BUYING PROCESS
MANUFACTURERS
• To win, you need good execution across many different channels/store types
• Make sure you reach those Must Have stores that deliver the 50% of sales
CONVENTIONAL RETAILERS
• Align format and assortment to the shopping mission for that store
• In store convenience & Service. With the right tactics activate
shoppers effectively by optimizing store, aisle, shelf and point of sale execution
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MYTH #3“Promotions are the best way to generate sales”
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THE INDUSTRY IS ADDICTED TO PROMOTIONSGlobally, over half a trillion $ is invested annually in trade promotion
Nielsen Proprietary 2016 Global Benchmark Analysis
$500,000,000,000
67% ... or 7 out 10 OF TRADE PROMOTIONS GLOBALLY
DO NOT BREAK EVEN
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THE NEED: SHOP WITH EASE AND CONVENIECED
erive
d I
mp
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Ra
nkin
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Base: All HM/SM shoppers, 2017 (n=1000)
Ref:Q18 Thinking about the same statements, please indicate
which stores you associate with each of the statements?
Convenience,
Efficient service
Price and value for
money
Accessibility
Large format
and wide choice
Product quality
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PRICE OFFERS DRIVE NEGATIVE SPIRAL
“There was an era where, when using simple
economics, if I wanted to sell more of something I
would just lower the price. The challenge now is if
I lower my price 10%, in many instances every
other player in the market instantly lowers
their price, too. … We all make less money
now.”
—Chris Donnelly, Senior Managing Director and Global Retail
Lead, Accenture Strategy
OF COURSE PRICE IS AN IMPORTANT DRIVER BUT SHOPPER IS WILLING
TO PAY MORE BY ATTRIBUTES THAT ARE RELEVANT FOR THEM
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THE OPPORTUNITY: BRAND BUILDING
MAKE INNOVATION A PRIORITY
• Find unmet needs to grow the category
• Know which benefits allow you to take a premium price
MAKE SURE PROMOTIONS ARE FOCUSED TO BE
EFFECTIVE ON THE RIGHT CATEGORIES / BRANDS THAT
RESPOND BETTER TO PROMOTION
• At the right depth of discount
• Avoid commoditization & “spiral of death”
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21Copyright © 2019 The Nielsen Company. Confidential and proprietary.
MYTH #4
“The Grocery space doesn’t need to worry about e-Commerce because people won’t buy food online”
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• 3 b. people, app. 50% of world’s population on line
• 1.5 b. people log into facebook monthly
• 500 m. tweets sent per day
• 68% of Global Consumers trust comments posted on line
• 71% of Global Consumers own a Smartphone
• 20 years ago average grocery stocked about 7,000 items. A typical Walmart have 140K products on the
shelves today… but there are 70 m. items available on Walmart’s website
• Amazon offers 600 m. items on their website, while adding 1 m. more items every week
SOME FACTSGLOBAL VOLUME & VELOCITY OF CHOICES IS STAGGERING
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GROCERY IS THE NEXT BIG RETAIL SECTOR BEING RE-SHAPED BY DIGITAL
„E-COMMERCE ISN’T THE
CHERRY ON THE CAKE,
IT’S THE NEW CAKE”
JEAN-PAUL AGON
L’OREAL CEO
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THE OPPORTUNITY: ONLINE HAS DIFFERENT VALUE FOR THE SHOPPERS
Stores will not disappear but shopper expectations will change
Reimagine how categories are bought and sold
Match shopper missions with online/offline offerings
Embrace mobile as the primary way to interact
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STRATEGIES FOR SUCCESS
1 2 3 4
Consistent, long-
term perspective
required to win in
emerging markets
Consumers
demand
convenience
& less complexity
Build your
brands &
Avoid
commoditization
Online has a
different value for
the shoppers
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