value redefined: boosting margins in western european retailing
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© 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 1
VALUE REDEFINED:
Boosting Margins in Western
European Retailing
© 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 2
A PLANET RETAIL WIPRO Report
HIGHLIGHTS
The economic climate of Western Europe remains
difficult which poses challenges for both retailers
and shoppers, but it also provides scope for the
retailers to explore new opportunities and
innovative customer centric solutions.
Success depends of how retailers add value to
consumers which is more complex because of
sophistication in the need and preferences of the
consumer.
For the retailers to convey value to the consumer,
they must first know the answer to the question -
What do their shoppers actually WANT ?
The continued rise of e-commerce means that the
competitive stakes are even higher
© 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 3
Operating Environment in Western Europe
Rising Fuel Prices
Saturation Weak non-food
sales
Regulations Urbanization
Rise of e-
commerce
Challenging economic outlook Changing retail landscape
The economic outlook across Western
Europe remains challenging and real
GDP growth across this area remains
low
The general economic situation also is
showing no signs of improving anytime
soon. If anything, things are getting
worse, for the short term at least.
Retailers are looking beyond just low
prices to include convenience, in-store
shopping experiences and “retail-
tainment” and anytime, anywhere
shopping
Hypermarkets, and to a lesser degree supermarkets,
are getting squeezed.
There is continued growth for convenience stores &
grocery formats–shows that there is more to value
than just low price
Typically big product assortment and lower prices -
relative to convenience stores at least - are no longer
enough on their own to win with consumers
Convenience and proximity to where consumers live
or work has become significant
© 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 4
The Changing Consumer Landscape
Consumers are demanding more. Across Western Europe still want to treat themselves on day to day
essentials like food and beverage, and will still spend more on items – as well as in retailers - that provide
good value regardless of price
DEMANDING Convenience
Personalized
Uncertain
Economy
Aging
Population
Single
Households
Fast paced
lifestyles
Tech-savvy
Value
Value
© 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 5
Path to Purchase in the saturated markets
Establishing such clarity has become even more crucial given that the grocery sector in
Western Europe is extremely saturated. The only Western European markets where the top
5 players do not hold a share of more than 60% are Italy, Spain and Portugal
Is it routine,
a top up,
something more
urgent or a
bit more
leisurely?
For what
purpose or
occasion are
they
shopping?
Who are
they? Are
they men,
women, old,
young,
singletons,
parents?
Where?
In which channel?
How & When?
Retailers must understand who their core shoppers are and how they define value. They
must know their shoppers’ different needs, missions and purchase occasions
© 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 6
Retailer Perspective: The Role of Retail Technology
For operational excellence, retailers can use automation and self-service technologies
Optimization tools based on predictive analytics, to streamline supply chain efficiency.
To understand consumer demands and improve merchandise planning, big data using predictive
analytics can be used.
And to serve customers seamlessly across channels, (near) real-time data access is now mandatory.
SELF SERVICE IN STORES OPTIMIZATION SOLUTIONS BASED ON
PREDICTIVE ANALYTICS
REAL TIME ACCESS TO INVENTORY AND
CUSTOMER INFORMATION ACROSS CHANNELS
SHOPPER INTERACTION
Improve margins and on-shelf availability Reduces labor costs and copes with traffic
peaks
Enable a seamless shopping experience
and optimize inventory
Analyze shopping behavior and target
consumers in a more personalized way
© 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 7
Focus on Germany: Illustrating the Nuances of Value
Norway(480mn), Germany(337mn), Denmark(405mn) and Austria(441mn)- stores per million population- are the four
Western European markets where the discount channels claims the highest share of overall food retail sales. Taken
together, the top five grocers account for more than 80% of food retail format sales in Germany, and show just how
consolidated the competitive landscape has become
At present, convenience retailing remains completely underdeveloped in Germany
2. Oversaturation of retail outlets supports discount channel
1. Consumer focus on low prices
3. Most German retailers privately owned
According to Anglo-Dutch FMCG giant Unilever,
Germany’s grocery retail landscape is “the hardest
in the world”. WHY?
The answer to that question lies in the fundamental nature of
Germany’s retail marketplace, which is characterized by three
key factors despite being Europe’s most populous nation:
© 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 8
Focus on Germany: Illustrating the Nuances of Value
Is change looming on Germany’s retail horizon ?
Open up to brands:
create new, added
value shopping
environments
Products:
accelerating their
innovation cycles
VALUE
Justify Value:
convince skeptical
shoppers of product
quality and ‘added
value
Convenience: to
become a viable
grocery channel
CASE IN POINT:
Rewe Group’s supermarkets, for
example, co-operate with
regional farmers to distribute
their products to local
consumers.
The group is now experimenting
with its Rewe to go concept at
several locations. One of the key
learnings for the grocer has
been that shoppers want a
seating area attached to the
store to facilitate food
consumption on-the-go
© 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 9
Future Channel Directions for Western European Retailing
To continue offering value, retailers must adapt their businesses to consumer demands as they evolve,
using technology to help with efficiency, pricing, product assortment and, ultimately, shopper interaction
E-commerce will drive regional
grocery sales
Proximity and convenience are
the new value
Discounters must move beyond
price and private labels
Hypermarkets must make most
of space
GEORGES PLASSAT
CEO, Carrefour
Multi-channel is key to success
“The hypermarket has lost its
human touch. It must become attractive
again [...] with an offer that answers clearly
identified needs and customer
expectations.”
© 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 10
Proximity and convenience are the new value
Discounters must move beyond price
and private labels and hypermarkets
must make the most of space
Europe: Discounters Retail Sales Prospects, 2013-2018
Europe: Convenience Store Retail Sales Prospects,
2013-2018
© 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 11
The Hybrid Shopping Experience: Planet Retail’s Vision
Source: The Planet Retail Value Redefined report 2013
The future of retailing belongs to those who can best integrate e-commerce with their bricks and mortar
stores. By incorporating in-store and e-commerce elements, retailers can create a hybrid shopping
experience that caters to customers’ every need
Serviced
Counters
Focus on
fresh food
Automatically
picked and
packed
Multiple
checkout
options
Last minute
orders can be
added on site
Encouraging
impulsive
buys
Supports the
drive pick-up
© 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 12
Conclusion
Due to the ever changing grocery landscape in Western
Europe, “value” can no longer be simply defined as the
lowest possible retail price. Shoppers now demand other
value propositions including convenience, enhanced
shopper experience and engagement, customisation and
personalisation
With consumers becoming ever more tech-savvy, retailers
must satisfy anytime, anywhere shopping and technology
can help retailers win with shoppers anytime and anywhere.
Optimising the real-time interaction between the customer,
the product and the retailer; delivering the right message,
offer, product, recommendation at the right time via the right
channel to the individual; all in real-time is critical
© 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 13
For more details please visit the link below:
http://www.wipro.com/Documents/value-redefined-boosting-
margins-in-western-European-retailing.pdf
© 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 14
About Planet Retail
© 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 15
About Wipro
Wipro Ltd. (NYSE:WIT) is a leading Information Technology,
Consulting and Outsourcing company that delivers solutions to
enable its clients do business better. Wipro delivers winning
business outcomes through its deep industry experience and a
360 degree view of “Business through Technology” - helping
clients create successful and adaptive businesses. A company
recognized globally for its comprehensive portfolio of services, a
practitioner’s approach to delivering innovation and an
organization wide commitment to sustainability, Wipro has a
workforce of 140,000 serving clients across 57 countries. For
more information, please visit www.wipro.com.
For more information, please visit www.wipro.com
© 2013 WIPRO LTD | WWW.WIPRO.COM | CONFIDENTIAL 16
Thank You ©Wipro Limited, 2013. All rights reserved.
For more information visit www.wipro.com
No part of this document may be reproduced in
whole or in part without the written permission of the
authors.
Wipro is not liable for any business outcome based
on the views presented in this document. For specific
implementation clients should take advise from their
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