Grocery industry must play by tomorrow’s rules to win, says IGD boss

Denney-Finch: more interaction in retailing in future

Denney-Finch: more interaction in retailing in future

Joanne Denney-Finch, chief executive at the IGD, challenged delegates to consider if they were playing by yesterday’s rules in business or adapting to changing times at the IGD’s 2012 Convention.

Denney-Finch explored four key themes: the marketplace, shopper needs, the importance of value and collaboration.

Denney-Finch highlighted growth in emerging markets such as China and India and revealed UK food and drink exports to China increased by 55% last year. However, it’s only a start, she said. 

“We still claim less than 0.02% of the market for food in China and even less in India.

“It represents a fantastic opportunity but it won’t be one-way traffic,” she said.

Bright Foods from Shanghai has acquired both Weetabix and Diva, a French wine exporter, for example.

Routes to market are shifting too, said Denney-Finch.

Previously, supermarkets and superstores were the key channels but today growth comes mainly from discount, convenience and online retailing, she said.

Denney-Finch predicted e-commerce will accelerate even further and websites will grow smarter.

One in six British shoppers went online for groceries at least once during the last year and 44% expect to do so within 10 years, she said.

Denney-Finch cited S-Group from Finland, which boosted its online sales by 12% when it offered recipe recommendations based on previous purchases.

According to the IGD, more people will also buy directly from manufacturers.

However, bricks and mortar stores are sure to fight back, said Denney-Finch.

“We’ll see more excitement and more interaction in retailing, through special events, shopping advisors, more opportunities to touch, smell and taste products, dramatic digital displays and a rich variety of information services.”

Smart phones will become even more important in grocery shopping and consumers will expect a seamless experience between online and offline worlds, said Denney-Finch.

Denney-Finch urged delegates to recognise the new generation of powerbrokers influencing consumers: ethical rating services like the Good Guide, price comparison sites like MySupermarket, financial advisors like money saving and meal planning services like NetMums.

Shopper needs will also be key in future, according to the IGD.

Consumers are asking for more locally produced products, said Denney-Finch.

Retailers are also finding various ways to stimulate sales through the day, she said.

This includes time of day merchandising.

Greater personalisation will be a central strand in developments too, said Denney-Finch.

It puts consumers in the driving seat of product development, she said; and she urged companies to think about the rules around personalisation for tomorrow.

However, shopper budgets must remain front of mind, said Denney-Finch and; while everyone loves a bargain, no-one wants to be blinded by a blizzard of promotions, she said.

According to the IGD, 44% of shoppers say they find it difficult to cut through the in-store noise, compare prices and find the best value in store.

Across Europe, 16% of grocery shoppers online cherry pickers. And, over half – 53% – think it’s a good idea and 77% expect to do it in future.

Guiding shoppers will also be critical, said Denney-Finch. 

According to IGD research, over a third of shoppers in Europe say they’d like to use an online meal planning service that can offer them a healthy, balanced diet for a fixed weekly cost, for example.

“We need to make it easier for shoppers to plan, manage their budgets and quickly locate the products that offer the best value for their needs,” she said. 

Collaboration will be vital too, said Denney-Finch. 

“Today’s best trading partnerships involve top to top alignment, joint business planning, data sharing, various collaborative projects and everyday contact at all levels,” she said.

However, the best relationships of today might not be enough to meet the challenges of tomorrow, Denney-Finch added. 

Denney-Finch concluded with a hotlist of seven capabilities to win by tomorrow’s rules:

  • Selling skills to win new customers in new territories
  • Technical skills, such as data analysis, digital and other new technologies 
  • Creative thinking to deliver breakthrough products and breakthrough supply chains 
  • Outstanding communicators, to build even closer connections with consumers 
  • Outstanding operators to strip out waste and keep the goods flowing, whatever disruptions lie ahead
  • Team players reaching well beyond their comfort zones to build new alliances
  • And most of all, leaders and change-makers not just at the top but at all levels in your organisation

“Play by the rules of tomorrow,” she said, “and win.”