Retail Times editor, Fiona Briggs, talks to David Martin, joint managing director at brand design agency, M Worldwide, about future retail trends
Brand design agency, M Worldwide, has a hawk-eye view of the latest retail trends and concepts.
The business operates in a raft of retail sectors spanning grocery, fashion, pharmacy, financial services and banking plus tourism and leisure. And, as its name implies, M Worldwide has an international reach, building brands and retail environments for some of the world’s most successful businesses.
Grocery has historically been a core competence both in the UK and overseas, however.
And, according to M Worldwide joint managing director, David Martin, the London-based agency’s UK expertise, in particular, is a pull.
“Overseas clients like the fact we work with UK grocers because it’s so competitive here. Necessity is the mother of invention and there is a constant push to create more standouts,” he says.
Audit of UK grocery stores
M Worldwide has recently completed an audit of the UK grocery market from a convenience perspective on behalf of an undisclosed client; which has highlighted current trends.
Martin claims the entry of large grocers onto the UK high street has “improved quality all round” from both a product and environmental point of view.
And, despite the current race for space in convenience, he claims there has been a convergence between convenience stores and food-to-go retailers with credible food-for-now offers, comparable to those in Pret A Manger, Eat and Caffe Nero, available in c-stores.
“Certainly a decent take-away coffee is a hygiene factor for a convenience store today,” he says.
On the key players, Martin claims Tesco has done a great job in terms of securing convenience locations and has blanket coverage in the UK.
However, he maintains the Express format resembles a large store squeezed into a small footprint.
“There’s still work to do in the customer journey in those stores and the way they are presented, rather than just being about less range,” he says.
Some retailers are doing things differently, argues Martin.
He credits Morrisons’ new M-local format for trying to retain the supermarket’s core differences such as being a specialist in fresh foods.
Waitrose, a client, also ticks the boxes with its Little Waitrose format. It stands apart from the crowd and is the forerunner of modern convenience retailing with its focus on quality fresh foods, offered in a small store environment.
Diana Hunter, director of convenience stores at Waitrose, reveals the opportunity and challenges in the market.
“The UK convenience market is currently worth £34bn and growing at 4.5% year-on-year, according to latest figures,” she says.
“As consumers continue to feel the pinch and are faced with rising fuel costs and longer working hours, a desire to shop in local convenience stores is an understandable trend. However, it’s an incredibly competitive market. Tesco and Sainsbury’s have mature estates while Asda and Morrisons are now trialling smaller format stores, not to mention the likes of the Co-op and Spar for whom this sector is their core business.”
“For Waitrose we aim to succeed by meeting customer needs for quality fresh food, food-for-now and essentials for the next 24 hours.
“It’s about a fresh assortment offering solutions for each meal of the day, including offering a range of ready meals, which beats getting a takeaway.
“In conjunction, offering convenience value and fast and efficient payment solutions will be crucial too.
“Finally, having a local feel to convenience stores will also be key. We feel the partnership model we operate is a huge advantage to us, helping to deliver local convenience shops which feel like they are run by the people who work in them, simply because they are.”
The in-store experience
Customer journeys and their in-store experiences are critical aspects of retail design and generate so-called moments of truth, says M Worldwide.
Martin highlights the efficiency of the queue system in Marks & Spencer’s Simply Food format, for example.
However, he questions the merits of self-checkout technology in terms of providing good customer service; where shoppers are left to their own devices.
“The experience has not caught up with the technology,” he maintains.
FMCG suppliers have also been impacted by the trend to self-checkout, which removes impulse items and those products typically merchandised at manned checkouts.
“Self service is bereft of any service,” Martin claims. “There is so much more that could be done.”
Banks, he argues, have successfully managed automated self-service and it has won acceptance in travel environments too. According to Martin, more could be done in grocery to encourage a positive self-checkout behaviour and improve the experience all round.
Future retail trends
Martin expects to see Wi-Fi in more retail outlets in future and says there is increasing pressure on retailers to compete with online prices in-store.
“One key reason for putting Wi-Fi in is that a retailer can monitor what people are are also looking at in their store. For example, a bank will know what other mortgage products somebody is checking.”
Martin reports he has used McDonald’s outlets purely for the Wi-Fi, changing his previous behaviour.
Wi-Fi also helps to create dwell time, he says.
M-Worldwide is also working with UK retailers to enhance their relevance to their local communities.
“It’s a tough nut to crack but the emphasis is less on global domination and a cookie cutter approach, where every store must be the same, but plays into the local customer and community a bit more.”
Pharmacy chain Lloyds is one M Worldwide client currently trialling new community-based concepts with its Health Village format. Dubbed as a healthcare department store, this shed-type format offers a range of services under one roof including: Vision Express opticians, chiropody, a chiropractor, Lloyds’ own Better Life brand of products for the elderly and infirm plus a coffee offer.
According to Martin, it’s providing family health from a convenience point of view.
Internationally, meanwhile, M Worldwide’s work with the large format stores operated by Lenta in St Petersberg, Russia, has seen the retailer’s business shift over time towards more fresh foods.
Similarly, in Iceland, it has recently completed a new store format for the 10-11 convenience chain, an evolution of earlier work, which has a renewed focus on food-for-now plus healthier, fresh food, operated by concessions.
Challenges and opportunities
Looking ahead, Martin claims the growth in the online channel will provide a challenge to bricks and mortar retailers since etailers are more flexible in their ability to refresh content and create newness.
“For traditional retailers, it will be hard to change quickly enough and there will be cultural challenges,” he says.
Martin tips Amazon’s locker collection points for online orders, Google’s store within PC World and Kiddicare’s acquisition of Best Buy stores as retail developments to watch.
Sharing physical retail space is also on the cards, he says. Expect to see Argos kiosks open up within Post Offices to maximise the square footage, for example.
Elsewhere, the Co-operative Group is looking to align all of its retail businesses and reap synergies; while in the mobile marketplace, T Mobile and Orange already share networks. Martin says operating two brands under one roof gives a positioning of “impartial advisor” versus “mono-brand”.
For grocery retailers, there are also opportunities closer to home, says M Worldwide.
One is the supermarket in-store cafe. According to Martin, it’s in dire need of a makeover.
“The current cafe offer is such a shocker and so far away from proper food,” he claims.
It could be one quick fix and an easy win, says the hawk-eyed retail brand design agency.