We're all missing a trick here! Healthy negotiations between retailers and their suppliers are all well and good, but they shouldn't be at the expense of meeting the needs of the millions of shoppers that visit supermarket aisles every day of the week.
Currently, retailer buyers and the brands that supply them are locked in an ever more artificial war. Each concentrating on fighting the other, with the stores wanting to find new revenue streams from the brands and the brands themselves trying to find ways to retain margin.
In this spreadsheet based situation, reality takes a back seat and decimal points ‘drive the bus’. In all the furore, one vital aspect in being overlooked – The in-store needs of the customers: Shoppers, those apparently insignificant individuals that in actual fact are responsible for the salaries of supermarket executives, brand account managers and almost all of us connected with grocery retail.
Take a look at the typical 21st century supermarket and ask yourself how well it meets the needs of shoppers. Yes it may be an efficient, stock laden warehouse. Yes it may allow for cost effective seasonal flexing and changes to the layout and yes it may shout 'special offer' from every nook and cranny. But are these things what shoppers really want? Are they truly what will drive shopper engagement, loyalty and spend? Let's consider the following 3 examples:
Firstly, the typical store has around 50,000 products for shoppers to choose from: Could that be too many? Do shoppers really desire a choice of 300 cheese SKUs? Do any of us really need a selection of more than 100 coffee products and a further 90+ different pizzas? Could the discounters be winning partly because they have a smaller, more mentally manageable range?
Secondly, when shoppers are looking to buy a special bottle of champagne, do they want the exact same shopping experience as when buying a bottle of bleach? But that’s what they currently get. Should the party frocks be in the same retail environment as the potatoes? No: But they are!
Finally, what about special offers? Assuming 20% of SKUs are on some form of deal at any point in time, that’s 10,000 offers that face the average shopper. If each shopper spends 40 minutes doing their weekly big shop and passes by just half of the products in-store, then they’ll be exposed to 5,000 offers: That's more than 2 every second!
Modern retailing isn't a partnership between shopper and retailer, nor is it an agreement between retailer and supplier - Its a 3 way relationship.Let's start to harvest the colossal amount of low hanging fruit available by understanding and then meeting the real emotional needs of shoppers.