aldi meets amazon - d25d2506sfb94s.cloudfront.net reports_aldi... · reports but discount retailers...
TRANSCRIPT
Reports
Part 1: Grocery retail is attractive but changing
Introduction
Part 2: Discounters and online-retailers have the potential to shatter the market
Part 3: Focus on what your customer wants
You need to know who your customers are
You need to know which customers are crucial to the future of the market
Be aware that there are still obstacles that online grocery retailers have to overcome
Understand that digitalisation brings new opportunities and challenges
Like many markets, grocery retail is going through rapid digitalisation. This report, based on data from YouGov Profiles,
shows how grocery retail will develop and what brands must do to increase their market share.
2
Reports
Grocery Retail is an attractive and growing market but very competitive
164 169175 177 178 179 182 185 189 193 197
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Annual value of the grocery retail market in the UK from 2011 to 2021 (in billion GBP)1
19%
13%
13%
10%
45%
Tesco Sainsbury's Asda Morrisons Others
Source: 1https://www.statista.com/statistics/611361/grocery-retail-market-value-in-the-united-kingdom-uk/,
²https://www.statista.com/statistics/282070/distribution-of-the-grocery-market-in-the-united-kingdom-uk-by-retailers/
Many grocery retailers are competing for market share…
4
Four major retailers
are currently in the
leading positions
(2015)²
Reports
But discount retailers such as Aldi and Lidl are having an increasing impact on the grocery landscape in Great Britain
Aldi and Lidl have doubled their market sharefrom 2011 to 2015, whilst the “big four“ are losing market share1.
Changing shopping habits and additional macro-economic factors have added to the success of the discounters like Aldi and Lidl.
1 Source: https://www.statista.com/statistics/282070/distribution-of-the-grocery-market-in-the-united-kingdom-uk-by-retailers/
2 Source: YouGov Profiles 2 Base: Nationally Representative GB adults aged 18+
of British customers use discounters at least once a week2.30%
The 30 % of British customers regularly using discounters has affected the
whole market leading to margin decreases at traditional supermarkets like Tesco, Sainsbury’s, Asda etc. which are under heavy price pressure.
25% 22% 19%
15%13% 13%
14%13% 13%
12%10% 10%
3%5% 6%
2% 3% 4%
29% 34% 35%
2011 2013 2015
Tesco Sainsbury's Asda Morrisons
Aldi Lidl Others
5
Reports
In addition, ordering online at traditional grocery retailers has become common place – but there is still room for growth
…have already used online grocery
retailers at least once.
1 Source https://www.statista.com/statistics/282070/distribution-of-the-grocery-market-in-the-united-kingdom-uk-by-retailers,
2 Source YouGov Profiles
Base: Nationally Representative GB adults aged 18+
24%
29%
48%
51%
72%
Morrisons
Boots
Asda
Saisbury's
Tesco
You said you have ordered food or personal products via an online supermarkets/ online only
supermarkets. Which of the following brands have you ever used? (Top 5) 2
British consumers stick to shops they go into on a regular basis when ordering food online.
Online accounts for only 6% of the
whole sales of the grocery market in the United Kingdom1.
46%
6Base: GB adults 18+ that use online supermarkets/ online only supermarkets
Reports
The market is still changing and customer shopping behavior is changing too
Use picture to take up white space
say that they use a certain shop type more or less often compared with two years ago.
75%
say that they will use a certain shop type more or less often within the next two years, compared to what they do now.57%
Source: YouGov Profiles
Base: Nationally Representative GB adults aged 18+
Retailers must reflect and respond to this development, otherwise they will not benefit from this ongoing change.
7
Reports
Use picture to take up dark grey space
Part 2 – Discounters and online-retailers have the potential to shatter the market
8
Reports
Due to digitisation, grocery retail will change fundamentally because it offers new benefits for customers
46% have already used an online
supermarket or an online only supermarket…
Convenience83%
Choice of products79%
Punctuality of delivery32%
… and they really liked it.
Quality/ condition of products74%
They rate the following aspects positively:
9 Source: YouGov Profiles
Base: Nationally Representative GB adults aged 18+Base: GB adults 18+ that use online supermarkets/ online only supermarkets
Reports
Discount retailers like Aldi put additional pressure on prices and margin and are speeding up this change
57% say that “discount supermarkets (Aldi, Lidl) are just as good
as the others (Tesco, Sainsbury’s, Asda etc.)”.
Without any other perceived differences, a smaller price will always be a decisive factor. This will lead traditional supermarkets to decrease their margin as well to be competitive.
This fight for the margin will affect the whole market; traditional retailers
will have to find other ways to differentiate themselves from discounters:
offering customers a special shopping experience, occupy new niches or
provide additional benefits.
Source: YouGov Profiles
Base: Nationally Representative GB adults aged 18+10
Reports
If there are any firms that meet customer needs better, the existing structure will be shaken to the core – even for established grocery retailers
Just because Tesco, Sainsbury’s and Asda are the leading online shops in grocery retail at the moment, it does not mean that they will remain so.
Source: YouGov Profiles
Base: Nationally Representative GB adults aged 18+
This offers great potential for companies like Amazon and niche retailers that focus on certain products that meet the needs of the customers better.
Even Discounters can benefit from this development, since they already meet a major need: the price of the goods.
40%…say they do not buy
from online shops that
they also use in the “real
world”.
Tesco, Sainsbury’s or Asda – do you want to know how your customers
see this point in particular?
Additional data are available in YouGov Profiles.
For information click:
11
Reports
Discounters, digital retailers and disruptors need to adapt by focusing on the needs of their customers.
This does not mean “all online” but digitalisation offers an opportunity for retailers to get to know their customers in more detail than ever before and therefore meet customer needs better.
It will create value for customers: depending on their needs customer groups will need individual product choices, sales channels, and pricing strategies. Doing this will help your business.
This is exactly what YouGov Profiles can offer you: Get to know your target group with our innovative segmentation tool in the detail that you need to know in order to strategically prepare your business for the future.
Click:
Let us show you how the power of YouGov data can help you to understand the upcoming challenges of the grocery retail market.
12
Reports
Overall, the most important demands of customers will influence the further development of the grocery retail landscape: Retailers need to focus on what the customer really wants
Price is the most important aspect for GB consumers, they rank this even higher than quality/freshness.
1. 2.3. 4. 5.
Offering good quality produce with a fair price is crucial, it will therefore be essential for your business to focus on these two aspects and sacrifice less important factors to be competitive.
Source: YouGov Profiles
Base: Nationally Representative GB adults aged 18+
2%: Don‘t know.
Shopping
experience
How customers rank their main demands for food retail (% show how many put the respective item on rank 1):
14
44% 37%
PriceQuality/
freshness
Convenience/
comfort
8%
Choice of brands/
products
8% 2%
Reports
You need to know your customers as well as possible. Here is what is important to them.
32
14
8
Largest choice possible of foodand personal goods
Large choice of other products
Smaller choice of the mostimportant products
71
20
16
Freshness of products
Products with certain labels orquality features
Freshly prepared food at the pointof sale
65
31
18
The price of products
Low priced own-store brands
Coupons or store discounts
Choice%
Quality/freshness%Price%
Source: YouGov Profiles
Base: Nationally Representative GB adults aged 18+
46
29
14
Proximity of a store
Short queues
Wide brand network
Comfort%
35
15
4
Competence/quality of staff
Ambience inside the store
Meeting other people
Shopping experience%
The shown data are only a small excerpt of all available data. You can analyse the preferences and demands of your target group and find the most effective messages to use when advertising to them using YouGov Profiles.
For information click:
15
Largest choice possible of food
and personal goods
Largest choice of other products
Smallest choice of the most
important products
Products with certain labels or
quality features
Freshly prepared food at the point
of sale
Reports
Additionally, special demand for products in grocery retail is something you can now focus on in the course of digitalisation
Food characteristics looked for % Find your own niche:
In times of digital transformation a deeper understanding of your
target group via YouGov Profiles gives you the opportunity to occupy an
attractive niche.43
39
24
23
18
18
Sugar levels
Fat content
Origin
Ethically farmed
Locally sourced
Fair Trade/Ethical
0
15
30
45
60Sugar levels
Fat content
Origin
Ethically farmed
Locally sourced
Fair Trade / Ethical
Waitrose
Aldi
Source: YouGov Profiles
Base: Nationally Representative GB adults aged 18+
See the demands of customers of certain retailers:
16
Reports
17
As YouGov Profiles data shows, customer demands and needs are diverse. Digitalisation offers new possibilities to fulfil them –for example, by providing a more convenient shopping experience and
targeted and demand-oriented offers.
Differentiation is the only way
Two customer groups will be crucial in times of digital change: price driven customers and convenience seekers.
Taking this into account, differentiation and focus based on detailed knowledge of the consumer and specific target groups will be the key to success.
Reports
Price driven customers are a group of pragmatic shoppers who make up a huge share of all customers
39% are price driven customers
Customers who are focused on every aspect of the price dimension, and who do not value
choice, comfort, or experience as much.
They show how pricing strategies work cross-channel: right now Discounters are very attractive for this group, but since online retail
is very good when it comes to low prices, their focus will switch:
35% say they will probably use discount stores more often in the
future.
Source: YouGov Profiles
Base: Nationally Representative GB adults aged 18+18
Reports
What price driven customers like:
They are more likely (20%) to be
middle aged (35-44 years old) and
female (56%).
Nearly four in 10 (38%) spend between £50 and £100 on food and household goods per week.
Take these brands into consideration more often:
:
They are Less likely (13%) have
an income above £60,000 per year and are more likely to be
married (44%).
They say that they enjoy watching TV with their
family (72%) more frequently.
Source: YouGov Profiles
Base: GB adults 18+ that belong to the “price driven customers” group 19
Reports
And how they shop:
Almost half(46%) use discount stores today
more often than two years ago, while only
10% are using them less often.
They are more likely than the general population to buy milk, cheese and dairy-products
(83%), bread (81%) and
cosmetics (43%) on a weekly
basis.
When it comes to online shopping they are more likely to use:
They put great value on the
largest choice of products (37%)
and low priced own store brands
(49%).
For them there is not much difference between leading brands and
supermarket own brands (69% vs 59%).
and less likely to use:
74% say they have a favorite
brand, but if another brand is on sale they will buy that instead.
20
Source: YouGov Profiles
Base: GB adults 18+ that belong to the “price driven customers” group
Reports
Meeting the needs of price driven customers offers great potential for online retailers & discounters as well as challenges & opportunities for the traditional grocery retail market
Online will grow as well. As soon as online retailers offer the right discounts or bulk buying, this group will shift
towards this sales channel. They will be especially likely to buy non-perishable goods which can be bought in bulk and
therefore profit from coupons and other discounting.
The use of discounters will grow rapidly within this target group, since discounters target the price aspect the most.
This group will be enthusiastic about the new retailers coming over from mainland Europe with their focus on low
prices which means price perception will be strongly influenced and lowered.
They will need to focus on the price sensitivity of this group and offer them good value for money or low priced own
store brands. Even the competence of the staff could be key to retaining them for the long term. But in general,
traditional retailers will need to focus and open up other target groups or differentiate their offers.
21
Source: YouGov Profiles
Base: GB adults 18+ that belong to the “price driven customers” group
Reports
They don’t necessarily look for the best price, but if a retailer offers
them a more convenient shopping experience they will prefer this
brand.
Convenience can also translate to an online experience and these
consumers use online retailers more frequently.
To offer this group a convenient shopping experience, retailers have
to know as much as they can about their needs.
30% are convenience seekers
For them convenience is the most decisive factor when shopping or has became more
important in recent time.
The second group is crucial when finding out where digitalisation will lead
Source: YouGov Profiles
Base: Nationally Representative GB adults aged 18+22
Reports
What convenience seekers look like:
They are more likely to be female as
well (57%), but they are more likely
to be under 35 years of age (35%).
They consider brands like:
And they are more likely to treat themselves to food
that isn’t good for them (73%).
Regarding their income they are
close to the British average: a third
of them as an yearly income
between £25,000 and £49,999.
They are more likely to be on Facebook (76%) and
a reader of the Guardian (17%).
You can analyse the key psychological traits of your target audience and find the most effective messages to use when advertising to them using YouGov Profiles.
For Information click:
23
Source: YouGov Profiles
Base: GB adults 18+ that belong to the “convenience seekers” group
Reports
And how they shop:
They often do not know what they
will be buying prior to going
shopping (43%) and are more likely
to spend more than they intended to
(41%).
When it comes to online shopping,
they are more likely to use shops with
a lower price (46%) and put more
focus on free delivery (26%).
They are more likely to go in general to chemists
(90%) and organic supermarkets (31%).
They are more likely to make
frequent smaller shops on a weekly
basis (78%).
Four in ten use discount stores today more
often than two years ago, whilst nearly one in
five (18%) are using them less often.
51% would prefer online shops, were they can get the
best deals.
33% say that they buy at online shops
they also use in real world.
24
Source: YouGov Profiles
Base: GB adults 18+ that belong to the “convenience seekers” group
Reports
Currently they don’t differ from the norm: Tesco, Sainsbury’s and Asda are their preferred online retailer.
Since they are looking for the best deals and convenience, this doesn’t have to be carved in stone.
Offering a good online and offline experience will be key to success. There are still hurdles that stand in
the way of meeting their need for convenience, but if, for example, same day delivery becomes more
common, the online business is likely to grow.
Discounters will also play a greater role in the future, since the convenience seekers are willing to use
them more often. This offers opportunities but also challenges for discounters, since they need to adjust
their online offer to be competitive and offer them a more holistic shopping experience.
This group is pretty demanding overall, putting much attention on other factors, as well as offering them
a good and convenient shopping experience: The proximity to the shop to their home and workplace,
offering their preferred payment methods and short queues are important for them. Meeting these needs
can be an important factor
for traditional retail.
Convenience seekers so far are linked to traditional supermarkets – but won‘t hesitate to change their preferences
25
Source: YouGov Profiles
Base: GB adults 18+ that belong to the “convenience seekers” group
Reports
There is a big opportunity to grow online grocery shopping by increasing online frequency
1 Source https://www.statista.com/statistics/282070/distribution-of-the-grocery-market-in-the-united-kingdom-uk-by-retailers,
2 Source: YouGov Profiles
Base: Nationally Representative GB adults 18+
Almost every second customer uses online retail, but it it makes up only
6% of the whole sales of the grocery market in the United Kingdom1.
The development gets stuck:
Only 15% of customers use online grocery a few times a month or
more often2. Customers hesitate to spend their money frequently online.
26
Retailers have to understand how this obstacle can be
overcome and how to increase their digital business.
Reports
You also have to find out how customers satisfy their needs and which requirements are crucial for your online and offline-business
Source: YouGov Profiles
Base: GB adults 18+ that use online supermarkets/ online only supermarkets
People with current online
shopping experience…People without current online
shopping experience…
…are more likely to
make smaller shops
during a week (87%)
…tend to make
impulsive purchases
(41%)
…buy durable goods
on a more short-term
base
30% agree that online
shopping is cheaper than
in-store shopping (29%do not agree)
…are more likely to
have a lower income
of up to £25,000
(35%)
…are less likely to
spend more than they
intended (32%)
…are more likely to
stick to brands they
like (25%)
27 Base: GB adults 18+ that do not use online supermarkets/ online only supermarkets
Reports
And which obstacles are holding people back in using online grocery
Top-10 obstacles: agree
44
40
35
31
26
24
23
17
17
13
71
51
38
57
42
25
34
14
33
19
Online shopping is worse because I cannot see or touch/check the products before buying them
I enjoy going to a supermarket store to shop
Additional shipping costs are too high
I do not trust the quality/ freshness of the products bought online (i.e. fresh vegetables,bread, fruit)
I don’t like my shopping behaviour being monitored online
I find minimum order portions are too large for me
If I only shopped online, I would miss the social contact of shopping “offline” in stores
My favoured store/ brand does not have an online shop
The negative environmental impact of shopping online bothers me (e.g. additionaltransportation of products, package waste, etc.)
In general, the delivery times on offer are inconvenient
Online Customers Offline Customers
In general, people with experience in online grocery shopping are less concerned across all measures. However, a significant proportion are highlighting
that there are obstacles which explains why online grocery hasn't had its breakthrough yet. Shipping costs and minimum portions are particular issues for
retailers to work on.
Online shopping is worse because I cannot see or touch/
check the products before buying them
I do not trust the quality/ freshness of the products bought online (i.e. fresh
vegetables, bread, fruit)
If I only shopped online, I would miss the social contact of shopping “offline” in
stores
The negative environmental impact of shopping online bothers me (e.g. additional
transportation of products, package waste, etc.)
28Source: YouGov Profiles
Base: GB adults 18+ that already did use online supermarkets/ online only supermarkets Base: GB adults 18+ that already did not use online supermarkets/ online only supermarkets
Reports
If online grocery retailers overcome those obstacles they will grow rapidly, current customers are satisfied and will spread the word leading to an upward trend in online grocery retail
92%…of current online grocery shoppers
have positive experiences with online
shopping.
Due to word of mouth, your business
will benefit from these positive experiences.
48%…of users of online grocers say that
people ask him/her for advice before
buying things.
If they are satisfied, they will certainly talk with their relatives,
colleagues and friends about their experience and drive this
development.
29
Source: YouGov Profiles
Base: GB adults 18+ that already use online supermarkets/ online only supermarkets
Reports
Digitalisation will bring new opportunities and challenges:Disruption is further caused by new players...
can imagine ordering directly from the producer without
being dependent on the retailer.33%
Grocery retail is threatened by verticalisation: the online market will enable a direct connection between customers and producers.
Source: YouGov Profiles
Base: Nationally Representative GB adults aged 18+
This is especially attractive to consider for example for brands, where the share of
customers who want to buy directly is above the Nationally representative average:
42% 42% 39%
30
Reports
Disruption is further caused by new technologies
Bild AI, Computergesteuert, irgendwas
31
Automated reordering and artificial intelligence:
Consumables can be ordered with a single click
It may become the norm that fridges or pantries may order automatically
Shopping lists might be created by online stores based on former purchases and personal preferences
Only 15% say they would like to have products
that they buy on a very regular basis ordered
automatically as soon as they have used them up,
indicating that this hasn‘t reached the
consciousness of British consumers yet.
Source: YouGov Profiles
Base: Nationally Representative GB adults aged 18+
Reports
In this fundamentally changing market, a strong brand becomes more important
New online grocery retailers will have the chance to
establish a brand that customers are attracted to. An
established presence could become crucial in these
changing times. If your brand stands for a certain
product or a shopping experience then it will gain an
important advantage.
Want to learn more? Click:
YouGov BrandIndex can show you what people think
about your brand:
Online shoppers are more likely to be customers of…
whereas non online are more likely to be a
customer of…
32
Source: YouGov Profiles
Base: GB adults 18+ that already did use online supermarkets/ online only supermarkets
Base: GB adults 18+ that already did not use online supermarkets/ online only supermarkets
Reports
Recommendations
The market is changing: every retailer must embrace these changes, otherwise they will lose out.
You must therefore know your target group in detail: how they shop and which aspects of the shopping experience are crucial for them.
Think about customer needs and how you can fulfill them. Offer them the shopping experience they want.
33
Overcome the most important obstacles to increase your online business and make gains from the new opportunities that digitalisation has to offer.
Reports
About YouGov
YouGov is an international data and analytics group. Our core offering of consumer data is derived from our highly participative panel of 5 million people worldwide. For each panelist we have tens of thousands of connected data points so can answer the vast majority of research questions by interrogating existing data. Where we don’t have the answers already, we can perform quick turn-around re-contact surveys for client specific research.
34
Reports
How YouGov can help you
Through the continued expansion of our data suite, we are developing a complementary portfolio of proprietary decision-making tools and resources which can support media agencies and brands owners through all stages of the marketing workflow. For example, our clients can:
• Identify target segments through Profiles.
• Track brand performance over time with BrandIndex.
• Explore trends and marketing challenges through Reports.
• Do a deep dive through Omnibus or Custom Research to understand why consumer sentiments and indicators are changing.
35
Reports
Overview
This report has been created using in-depth data and analytics collated using
YouGov Profiles, YouGov BrandIndex and additional research using the YouGov re-
contact service. To create hypotheses to test with the large YouGov datasets and
validate findings, YouGov interviewed a total of 2,177 GB adults aged 18+
between 25th September - 27th September 2017.
YouGov Profiles is the YouGov connected data vault which holds 190,000 variables
collected from the most active 250,000 panellists in the UK. YouGov have the same
connected dataset in the US for over 200,000 panellists with 200,000 variables,
and also in Germany with 100,000 data points for over 55,000 panellists.
36
Reports
Let us show you the power of our connected data and solutions.
For a free, no obligation, demonstration please contact:
David Ellis
+44 20 7012 6216
Email: [email protected]
37