How Will Retail Giant be Challenged in 2017 ?

How Will Retail Giant be Challenged in 2017 ?

Brankrupcy, Closure, social plans, are only few of the worrisome words traditional grocers are blooming everyday, thinking to their future.

Grocers seems to face a disruptive 2017 year. After all, competitors aroused from the internet world are entering the game since few years and are showing appetizing growth! Like other monopolistic sector grocery retail is consciously being disrupted by the numeric foodtech rupture and the business war coming worth the effort. Indeed, this huge market of 11.8 trillions dollars, forecasted for 2020 by igp, is supported by increasing affluence, urbanisation and rising population. However traditionnal grocers seem unaware of this huge upcoming opportunity and keep trotting while outsiders are accelerating!

Grocery Retail Will be Seriously Tackled

New comers arise from the digital world and are holding the right weapons to presents themself before the grocery challenges. These weapons are called innovation, entrepreneurship and disruption. These three marks are displayed as a war trophy on the shield of recent actors like AmazonGo, Google or Uber eat. Having the Digital and technological advantage, these outsiders currently use their expertise to take over Walmart, Tesco, Carrefour as well as other grocers. Besides their frightening expansion, the catering sector is also experiencing an insolent growth in urban centers and captures grocers’ market share.

We are gradually seeing a recomposition of the food retail landscape that leads to the establishment of new distribution platforms answering real needs.

New Catering platforms will appear

Along with Exki, Pur or Dubble, who have all bet on organic and healthy products, “healthy diet” is on the rise. The dishes, balanced, are homemade and composed of 100% natural products. All at affordable prices: from 2 euros for a starter, a salad or a pasta dish, and 3 euros for a meat dish. On the architectural side, Nostrum restaurants are decorated in a modern style, with a special emphasis on “natural” with, in particular, a strong presence of wooden elements. And to further develop the turnover of each establishment, a home delivery service will soon be set up. Such a service should take market share of traditional grocery retailers.


IOT will care about your well-being, your body and your health.

They connect your hair brush to multiple analytical capabilities that will provide you with all the products your hair needs to be healthy. These platforms can be operated by brands or distributors working with multiple varieties of sensors and data acquisition tools. The share of customer data is the instrument that could naturally emerge from these initiatives in order to measure the competitive power of a particular actor. We also foresee lots of emphasis on robust analytical models and tools being used on the data analysis side, for instance the consumption frequency with Amazon dash button.


Vertical integration platforms

To control the whole value chain in order to increase flexibility and cost. There are still quite a few who have ventured there, but with Amazon private label production and distribution, the first results are convincing. Indeed, Amazon Elements wipes have seen 266 percent year-over-year growth, and customers who view Amazon’s product are three times more likely to purchase than the category average, according to 1010 data report. A report from The WSJ in May 2016 detailed Amazon’s expansion of its own brands, with new launches in the categories of Happy Belly, Wickedly Prime, Presto!, and the above-mentioned Mama Bear, for example. Happy Belly now offers food items, like nuts, trail mix, tea, coffee, and cooking oil. Wickedly Prime will be snack foods.


3) Relation With Customer will be more important than ever

Re-enchanting the hypermarket is a fad, it didn’t really work because nobody did it properly over the past years. Preferring to rely on organic development, it is more than probable that the conquest of the customer must now be done by the emotional connection that retailers are able to create. Retailers have invested significant amounts in the renovations of outlets in recent years. The decor is therefore set. But how to bring vitality when most of supermarket are turned into stone. I am struck by the dynamism of our industry. After a decade focused on cost optimization, we are stepping into a true desire to see the top line grow. It is about innovating, testing, failing and trying again. The extension of the field of distribution will necessarily involve a broader view of the role of the distributor and the creation of emotions that will differentiate them from pureplayers coming exclusively from the digital world, without physical advantage.