The world is so easily reduced in size through travel or digital communications that finding true new innovation that inspires us is getting harder. Sourcing innovation that is ready and able to help you stand out in a busy market and deliver return on your investment is the real challenge – but also the opportunity.
For sure we don’t want to be continuously at the bleeding edge of innovation but consumers have so many choices about where to spend their money we do have to make sure that our businesses are continually looking for ways to surprise and delight them.
In short, it’s our duty to constantly seek out ways of keeping our offer fresh and our profits balanced.
The great news is that we have a plethora of ways of doing this, the UK is already known for its retail expertise, so plenty of ideas on our doorstep – so where next?
The ACS makes a positive habit about visiting a different European market every year and there is nothing better than sharing ideas and observations with peers as you travel.
What about going a bit further? NAC’s in the USA has spread its influence across the world and has additional forums in Europe and Asia focussing on improving productivity through best use of Technology and growing sales by deploying stand out propositions.
I asked Insight’s Dan Mumford (an international industry Guru if ever there was one!) about his thoughts and he was clear; beverages and in particular coffee is still a place where quality can innovate in a busy market, drive footfall and grow margins.
It is true that we now expect one of the UK big coffee brands to be present in every location, so much so that it has become common place. However, businesses like Henderson’s in NI have led the differentiation charge domestically and now bought their offer to the U.K.
The difference? It’s in the whole offer and the value to independent retailers. Coffee specialists achieve at least 40% of their revenue from non-beverage sales – food and accessories. To compete, our stores need this whole solution also, they need ranges refreshed responding to seasons and as tastes evolve – cold brew and non-coffee is as important in the mix and needs to come as one package if we are to become the real specialists – delivering loyal daily footfall.
Dan is also convinced that changing lifestyles such as the rise of the use of EV’s and the way that has forced all retailers (not just roadside) to think hard about their offer. His search for the greatest EV hub in the world has enabled many industry leaders to review the way they set up stores for the future, looking hard at assortments sold with different dwell time and reasons to visit.
Selling more frequently to more shoppers is always at the heart of why we innovate but the other big opportunity is productivity. If you had asked me about innovation a couple of years ago I would have pointed to Electronic Shelf Edge Labels as a massive step forward but convenience has already led the way in this respect, the need to reallocate labour cost to FTG areas will only increase as we improve our offers, add to that retail wage cost inflation of circa 10% per annum and ESEL’s become a no-brainer.
However that only tells a part of the story. Digitising the product journey enables us to measure availability, manage margin, improve the product information we give our consumers and ultimately stay informed about our respective business performance. This is big business Management Information being put into the hands of small independent organisations – the difference is that small businesses can do something quickly with the data they are given. Win Win!
Although we’re all aware of British retail excellence we still travel the world and admire the assortment we see in categories we sell through brands that we stock – I can’t be the only grocer that spends as much time in the confectionery aisle as the wine department in a French Supermarket? How do they make sugar confectionery and blocked chocolate look much more premium working with the same brands that we do?
Working with Spar also gave me a great insight into the way other countries go about their private label strategy. I defy you to show we a more comprehensive, consumer targeted range than you will find in the many Spar formats in Austria.
Blend that with the convenience focus that Spar Netherlands has bought to their range. In fact, looking at what they have delivered in their recent Amsterdam model stores and it prompts me to consider whether the supllying wholesalers in our country fully understand our market? For sure organisations such as Morrisons and Tesco have enabled independent retailers to access much wider assortment but are they fulfilling the need of our shopper or theirs – is there a real opportunity here to improve?
My final comment relates to another experience gained from international Spar businesses. Many of our European counterparts already work within environmental legislation that at some point will end up in our countries - one way or another. Recycling, as an example, it is just going to happen. So why don’t we design and build stores now with this capability. Instead, my instinct is that we will continue to fight off the inevitable until it’s forced on us. I’m not saying that we should incur additional uncompetitive costs but we can prepare to be the best at recycling when it arrives. Who knows shopper might even like what we do and reward us by spending more!
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