Shoppers of the future 27 th June 2018 Vanessa Henry Shopper - - PowerPoint PPT Presentation

Vanessa Henry

Shopper Insight Manager

Shoppers of the future

27th June 2018

William Gibson, The Economist, 2003 “The future is already here… … it’s just not evenly distributed”

Shopper’s fundamental needs don’t change…

VALUE TIME CHOICE Help me get quality at fair prices Don’t make me spend more time than I want to Help me find the products I want to buy

Source: IGD Shopper Research

…but expectations and behaviours do change

5 MEGA-TRENDS

SET TO SHAPE OUR INDUSTRY

The next generation: ‘influencer shoppers’

25%

• f the British

grocery shopper population

• YOUNGER
• HIGHER AFFLUENCE
• 1000+ SOCIAL MEDIA

FOLLOWERS

• ONLINE REVIEWERS
• EARLY TECH ADOPTERS
• ENGAGE IN FUTURE

TRENDS

Shoppers will…

The grocery shopping experience will have to work harder so shoppers can optimise and make the most of their time.

• 1. BE TIME-OPTIMISERS

We’re choosing to be busier…we’re not actually busier!

28

The number of times we check

• ur phones each

day

6

The number of hours we spend

• nline per day

2

The number of hours we spend

• n social media

each day

£5bn

value of the UK fitness industry

More enjoy the shopping experience

58% ENJOY SHOPPING 39% DISLIKE SHOPPING

Engagement or efficiency: where does your category sit?

Milk World foods

Lower levels of enjoyment Higher level of enjoyment

Baby food Fresh poultry Cakes / pastries Fresh fruit Table sauces Pasta, rice, pulses Wine Butter / spreads Breakfast cereals Confectionery Household paper Household cleaning Dental care Spirits Frozen vegetables Chilled prepared meats Ice-cream Skincare products Haircare Bread

Subscriptions: categories where shoppers can gauge consumption

…say in the next 2-3 years they’ll be signing up to an online subscription service to get grocery products they use regularly delivered to them automatically

24%

Integrating offline with online

Shoppers will…

Health and wellbeing will grow in importance with subtle differences owing to individual motivations.

• 2. BE MORE HEALTH

CONSCIOUS

Health is high up the shopper agenda, but…

85%

…of shoppers claim to be actively trying to improve some part of their diet

Current barriers to healthy eating:

• Perceived lack of value for money of

healthy eating

• Lack of motivation
• Insufficient knowledge and

education

• Lack of time

‘Look good’ motivations driving health agenda for younger shoppers

42%

• f 18-24 year old shoppers say in the

next 5-10 years they will be more likely to eat healthily to look good (vs 24% of all shoppers)

How can you unlock the ‘selfie generation’?

What impact can influencers have on sales…?

Sales at Waitrose are up

• ver 60%. Driven by increased

interest in fermented foods and their purported benefits. Many A-listers are also reported to be apple cider aficionados with Jennifer Aniston, Katy Perry and Victoria Beckham all talking about their love for the

• vinegar. (May’18)

Shoppers will…

Shoppers in the future will be open to a more personalised food and grocery experience, but only if there is a clear benefit to them with minimal effort.

• 3. EMBRACE

PERSONALISATION

Executed well…personalisation could be game changing

Drive better conversion rates Improve shopper retention Create useful marketing data

When you talk to shoppers…it’s a no-brainer if it’s on their terms

If you feel like you’re getting something back then it’s ok. If they’re taking my data but then every now and again they send me an offer. Then it’s worth your while.

56%

• f Influencer Shoppers say

they will share more data with supermarkets in the future in order to get a more personalised shopping experience

Online provides the platform for personalisation

Smartphones could be key to unlocking personalisation in-store

53%

‘My mobile phone is the

• ne thing which connects

so many aspects of my life together’

44%

‘I’d like to receive personalised offers sent to my phone when I’m in different parts of a store’

US retailers investing in personalisation in-store

Shoppers will…

Shoppers in the future will increasingly experiment with their shopping and meal preparation to broaden their repertoires.

• 4. BE MORE

EXPERIMENTAL

Increasingly open to trying new things

45m

Number of holiday visits abroad by UK residents in 2016

9.3m

Number of people living in the UK who were born outside the UK in 2017

80%

Open to trying new / different food and non-food products, services and experiences

What’s different is how we’re finding inspiration and how quickly

Source: Knorr

Requests for NPD: where does your category sit?

Milk World foods

FEWER NPD REQUESTS MORE NPD REQUEST

Baby food Medicine Cooking sauces Chilled ready meals Canned products Tea Confectionery Coffee Butter / spreads Ice-cream Household paper Pet food Breakfast cereals Cheese Dental care Table sauces Crisps & snacks Biscuits Bread Pasta, rice, pulses

Shoppers will…

Shoppers will want to make sustainable and ethical choices, but only if other needs are also satisfied.

• 5. BE MORE SOCIALLY

CONSCIOUS

Shoppers want to ‘do the right thing’ but in reality…

60% 38% 74%

• f all shoppers say they’ve

become more aware of the environmental impact of plastic packaging in the last 12 months

• f under 35s say concern

for the environment will be more important to them in the next 5-10 years

‘Is it available?’ ‘How much?’ ‘Will it work / does it taste good?’

Tipping points: ‘Blue Planet’ effect

I was quite surprised that my son said at university more of his friends watched that David Attenborough planet Earth than some of the football matches. They were glued to it.

Sustainability set to resonate with a growing number

54%

• f shoppers say recent TV shows,

especially David Attenborough’s Blue Planet, have inspired them to make changes to support the environment.

38%

• f Influencer Shoppers say they will

always buy environmentally sustainable food and grocery products in the future.

‘Blue Planet II effect’: industry taking action to stay ahead

How will the physical store evolve?

RELEVANT EFFICIENT DIFFERENT

• One store, multiple missions
• Stay ‘on trend’
• Provide fun and enjoyment
• Personalisation
• Drive operating efficiencies
• Reduce shopper ‘friction’
• Help save time & money
• Easy to shop any channel
• Ranging
• Experience
• Inspire and interact
• Mission focus

Relevant to multiple shopping missions

Promotional mission Non-grocery mission

Entrance Entrance Entrance Entrance Top-up Bigger basket Offers power aisle Non-food

Efficient ways to operate the store

Source: Walmart press release

Differentiate with innovative products and displays

Source: IGD Research

Albert Heijn

The online store of the future…it’ll look like this

PERSONAL SMART EFFICIENT FRICTIONLESS INVISIBLE

Shoppers’ personal micro store Smart personal assistant More efficient for shoppers Frictionless

• ffline & online

experience At times it will be invisible

Personalisation: content, media, products and services

££ - £££ £ - ££

Smart: Amazon & Unilever

Efficient: whenever, wherever fulfilment

Amazon Key

Frictionless: offline and online experiences…payment via social media

Invisible: shoppable digital content

IGD Futures – www.igd.com/igdfutures

Online store of the future Physical store of the future Shoppers of the future

Are you planning for the future?

Are you meeting core needs by doing the basics, exceptionally well? Think range, availability, category architecture, value Are you developing shopper experiences that drive emotional engagement? This could be about engagement but also efficiency Are you investing in test and learn activity with target shoppers? Use ‘influencer shoppers’ to assess appetite early on Do you understand the value of data? Invest in data and follow tech adoption. Influence the AI. Make your digital media shoppable Are you staying ahead with future trends relevant to your brands? Take a total category approach to drive growth

Any questions?

Keep in touch!

Vanessa.Henry@igd.com @vanessa_IGD