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Amazon 2013: Online Grocery New solutions on the horizon

Admin — Tue, 21 May 2013 09:06:37 +0000

For Amazon, grocery is the big opportunity, it is after all the biggest category in retail in any market, shoppers will always need to eat and drink. Grocery is also where Amazon’s future growth will come from, then again it is also the hardest sector to make work profitably online.

That said, grocery has been the fastest growing category on Amazon in the US for two years now. So far the biggest growth has come from the shelf stable products Amazon sells through 1P (Amazon Retail) and 3P (its marketplace).

In both business models, Amazon and AmazonFresh, the retailer is over-indexing with younger families and higher income groups. This alone demonstrates why joining the ecosystem has become so attractive to FMCG brands. Amazon has found that once a consumables shopper has converted to an online buyer, they buy across all CPG categories.

Amazon is now ramping up its online grocery offer outside the US as well. We answer the questions whether there will be a shift from shelf stable to fresh on the cards, and what the online grocery strategy for the marketplace is and what the plans are for Europe and FBA.

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Retailing in Russia 2013

Admin — Tue, 09 Apr 2013 11:06:52 +0000

Russia represents a large middle-income market with growing consumer expenditure. The retail industry in Russia is in a good position as one of the fastest growing industries in terms of value added. It is in the process of consolidation with top national and regional chains generally outperforming internationally experienced entrants in terms of revenue, profits, and the number of stores. Yet, doing business in Russia is perceived as rather complicated, so the combination of market opportunities, entry barriers, and risks creates a truly strategic puzzle. This report helps understand the trends and peculiarities of the Russian business environment focusing on retail, one of the most competitive, consumer-driven markets. Rich in exclusively available data from executive surveys and corporate strategies, this report

presents key retail statistics with comments regarding possible misinterpretations of the publicly available data
summarises data for top retailers such as revenues, selling space, and a P&L account
highlights trends in shopping and consumer behaviour that are specific to the Russian market.
describes four distinct winning strategies being implemented by the Russian retailers
suggests how to reduce exposure to adverse conditions of doing business in Russia whilst enjoying its market opportunities

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Amazon 2013: The future of retailing

Admin — Wed, 06 Mar 2013 20:39:19 +0000

Amazon is the world’s leading online retailer and as such the best in class and the only benchmark. Seattle’s finest is transforming the retail industry and the effects are felt by players in every category, in every channel and in every market.
The various business models and KPIs Amazon operates with will undergo a radical change soon, when sales growth, profit growth and market shares will reach a definitive tipping point.
While some business units will see maturing growth rates, lulling some competitors into a false sense of security, other parts of the business will see an outright explosion of growth, which will have an even bigger impact on the retail universe than Amazon has had up to now. Clearly, for some the worst is yet to come.
Crucially and dangerously these parts of the business remain hidden from view through Amazon’s reporting policies and only emerge once one has carried out a deep dive into the business model.
The move to next day deliveries, innovations around prime, the roll out of more fulfillment centres and lockers across the globe, linking up the international marketplaces and pushing of FBA, offering credit lines and opening up advertising to 3P (and the scalable AWS infrastructure in the background tying it all together) show where Amazon’s journey is headed.

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How Online Retailing Will Transform IKEA

Admin — Tue, 05 Feb 2013 08:24:33 +0000

The rise of e-commerce and increasingly intense online competition in the furniture market will make it vital for IKEA to radically transform the business model away from the single focus on the big out of town shed. Even with today’s restricted transactional online offer, available in just 12 out of 40 countries, IKEA have attracted more website visits than physical store visits (1.1bn website visits compared to 776m store visits in 2011), leaving a lot of scope for IKEA to convert views into online sales.

IKEA’s board has planned to grow like-for-like sales by 5% from the existing store estate and to boost sales by a further 5% through new store openings. However, were IKEA’s online sales to double from the current level of around 2% of total sales and keep their strong sales momentum, this would all but cover the 5% growth targeted from new store openings, sharply reducing the need for costly new store development!

The company intends to amass 500 stores worldwide by 2020, compared to its current 338. The report shows that overemphasis on store expansion is the wrong route for IKEA to go down. Instead the analysts suggest stretching the online store to countries where it isn’t yet available, adding more of the product range to the online store and exploiting the potential of mobile applications.

There are issues that will need closer attention in order to ensure a smooth transition to a true multichannel business. Online operations must be integrated more strategically into the existing physical store model to drive up footfall and offer complementary growth through services such as Click and Collect.

Right now IKEA does not offer a competitive home delivery service compared to the likes of Amazon and eBay, still charging customers according the weight of their order. In Germany, IKEA’s most important market, pureplay competitors such as Home24 already offer a completely free delivery service. In order to slash delivery times, IKEA’s supply chain is in urgent need of revision. To cut costs and keep inventory levels low, closer cooperation between production stages and real time data mining will be necessary.

That said, although the online store is of massive significance for IKEA’s future growth plans, physical store expansion plans remains critical further afield. Opportunities to expand the racecourse store model into emerging markets must not be missed, as there are large levels of untapped demand in the Indian and Chinese markets. Back in Europe, the current decline of the high street is putting downward pressures on real estate prices in city centres, opening up another opportunity for new store development and format diversification such as IKEA’s city centre stores.

The internet will affect IKEA’s business model in other ways too. The soaring ownership of tablets means that IKEA’s app offer needs an overhaul and the catalogue needs to become entirely digital. A transactional service, encouraging customers to purchase goods using an IKEA app should also include a mobile payment option, so customer would be able to use IKEA’s in-store Wi- Fi to cut checkout-waiting times.

IKEA’s conservative attitude towards the web has resulted in lots of missed sales, and online expansion is the future for the retailer, hence strategic decisions taken in 2013 will be vital.

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Consumer Interviews

Admin — Fri, 30 Nov 2012 15:37:04 +0000

ResearchFarm is able to carry out custom consumer interviews for your company on any given, specific subject.We ask consumers the questions you want answers to and we deal with all the legal and technical aspects (interview agreements, filming and editing).

GAIN A BETTER UNDERSTANDING OF ONLINE SHOPPING BEHAVIOR BY OBSERVING:

How online shoppers use the main retailers’ sites
How online shoppers use shopping lists and search out their favourite brands
How they react to online coupons and special offers etc.
How they organise their on line shopping journey
How they impulse shop online
How shopping categories online is different from offline
How online shoppers trade up and down from brands to private label and vice versa
What the pitfalls are, search functions, delivery charges etc…

You want to know more about this service? Download our brochure here: http://researchfarm.co.uk/brochures/index.php?file=consitwbroch3.pdf

Convenience store 2020: Centre of the local ecosystem

Admin — Fri, 23 Nov 2012 15:13:52 +0000

We have identified 5 issues that will be crucial to the convenience store format in 2020. Today’s convenience store retailers should start to…

establish an ecosystem around the store,
become completely catchment-centric (shopper and location),
integrate their offer by maximising the private label opportunity,
leverage the c-store in the supply chain and
update the food service offers

…to remain relevant in the future. Businesses covered include: Ahold, Amazon, Apple, Asda, Boots, Budgens, Carrefour, Casino, Circle K, Coop Suisse, collect+, Coop Deutschland, Coop UK, Costa, Delhaize, DHL, dm, Duanne Reade, Edeka, E.Leclerc, FamilyMart, Febo, Franprix, Hubiz, Kiala, Lawson, Lidl, Migros, Monoprix, Morrison, Rewe, Rossmann, Sourced Market, Spar, Starbucks, SuperBest, Tesco, Waitrose, 7-Eleven The report provides global best practice examples from the EU, US, Hong Kong and Japan and features exclusive access to our convenience store picture library.

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Lidl & Kaufland: Hard Discounters 2012

Admin — Tue, 30 Oct 2012 11:40:46 +0000

Schwarz Gruppe is not just the driving force behind Lidl’s remarkable success story over recent years, but is also behind Kaufland – currently the most successful hypermarket business in the EU. The Kaufland operation is separately run from Lidl but managed according to identical, strict discount principles and the compact hypermarket format’s performance in Germany and CEE is outstanding. The reason behind Schwarz’s success is a relentless focus on price and slow and steady adaptation to changed shopper needs paired with first class execution. Whereas Kaufland demonstrates that strong growth is possible for a hypermarket format, even when most competitors are struggling against the tough macro economic backdrop, Lidl has transformed itself into the leading European retailer with the highest store count in the largest number of countries of the EU. ResearchFarm predicts that with the combined turnover of Lidl and Kaufland, Schwarz will also become the leading EU retailer by sales generated in the EU in 2013, overtaking Tesco, Metro Group and Carrefour. It will be a closely fought race though. In France, Lidl’s most important foreign market, the discount format will see a major update of the formula. Over coming months management will import Lidl’s latest cutting edge thinking from other markets, upgrade the in store presentation, extend the branded ranges and deepen the crucial focus on fresh produce. Lidl’s convenience outlet is an adaptation of the traditional hard discount format, featuring a number of innovations – and is characterised by the absence of non food. That said, we believe that non food represents a major opportunity for Lidl, as Germany’s transactional online operations showcasing a huge branded non food presence can be rolled out internationally. While much change is afoot at Lidl, the core strength will remain the private label proposition and as such there will be a clear limit for brands in store. As the first mover Lidl serves as a clear template for Aldi. Past experience at Lidl, ranging from Super Saturdays, outstanding footfall generation to the innovative promotional stance – and the gentle move away from EDLP suggests what the future could look like at Aldi and crucially what probably will not work. Lidl is also further ahead than Aldi in terms of private label segmentation and unlike its rival in vertical integration, as these have become key strategic objectives for the retailer. For Schwarz vertical integration also means optimising the supply chain and utilising spare capacity efficiently. Schwarz’ supply chain optimisation, bundling smaller suppliers’ deliveries has really driven down costs and the initiative is now also copied by Aldi. Schwarz now needs to prepare for the attention its new status as the EU’s biggest retailer will bring. We believe that focusing on making its business future proof – by securing supply through vertical integration and by attracting top talent and shop floor staff through offering better compensation than much of the competition will be the first steps on its exciting journey over the coming years.

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Aldi – Hard Discounters 2012: The Winning Format

Admin — Thu, 06 Sep 2012 11:12:19 +0000

An unprecedented growth story is unfolding, as austerity bites across the west and food price inflation will filter through into higher retail prices next year. One retailer that stands to benefit hugely from this changed macroeconomic environment is Germany’s Aldi. The retailer currently achieves record growth rates in the UK (sustained at well above 20% year on year) and in Australia, where further expansion is already financed out of the cash flow generated in the country. The huge opportunity going forward for Aldi Sued’s stores as well as for Trader Joe’s, Aldi Nord’s premium organic discounter is the US, where the efficiency of the business model meets a consumer willing to trade down as never before. Meanwhile back in the old world, Aldi Nord is rapidly updating its stores and investing heavily into making the format fit for the next decade. The big questions rippling through the sector is the introduction of more FMCG A brands across a number of markets, which the two businesses coordinate tightly. We predict that a more attractive SKU proposition increasing frequency (if not necessarily penetration) combined with the store updates from both Nord and Sued will ensure that Aldi will continue to outperform. This data rich report from the EU’s premier experts on hard discounters goes behind the facade and analyses the business model and the poorly understood proposition and success factors of the discounters, with key insights and learnings for other businesses. It argues that Aldi’s principles need to be understood in the original context of Germany’s retail sector of the 1950s and subsequent development that has created the company’s unique culture and business practices, which have proven to be easily replicable and exportable around the globe.

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The Private Label Landscape 2012: Future Strategies To Win

Admin — Tue, 17 Jul 2012 00:04:10 +0000

ResearchFarm is launching new service, which is absolutely free to access with our latest report:

The Private Label Landscape 2012: Future Strategies To Win – What makes the hard discounters so successful and how to combat them using their own strategies – study into emerging private label trends of the future, focus on health, local, convenience and social.

The report is an idea generation pool for private label innovation and propositions featuring international best class examples from the world of retailing.

The integrated service features a strategic report, recommendations and first class execution examples, such as in store case examples via a direct link from the relevant report section to hundreds of real life pictures taken in leading private label markets and at leading private label retailers around the globe (US, UK, Germany, France, Belgium, Switzerland, Denmark, Netherlands, Austria, Spain)

Links to relevant pictures from our database

With the report ResearchFarm’s team of Analysts showcase the leading cutting edge examples, retail success stories and answering open questions around private label propositions, giving clear recommendations of what to do next.

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Online Grocery Retailing 2012

Admin — Mon, 21 May 2012 19:46:14 +0000

This report focuses on four key issues. It provides an analysis into the context the sector operates in by focusing on the wider trends impacting online grocery and crucially it provides all the data needs, by showing how developed online grocery is in the EU now and what the state of play in online grocery retailing will be in the future. Secondly the report focuses on real world examples where online grocery players have made the business model work against all the odds, by focusing on three key case examples. The report explains Tesco, the global online grocery leader and the reasons behind its success, before assessing LeShop, a player that is similar to the UK’s Ocado, in being more of a service provider than a retailer. This case example shows how big the average basket can become in € terms in online grocery and how long it takes for such a business model to become profitable. Thirdly the report takes an in depth look at the drive phenomenon in France, that has led to a growth explosion in the sector. In the third section the report looks at strategic issues and actionable recommendations and highlights some innovations and growth opportunities in online grocery. We have identified curated shopping, subscription models, generating fulfillment efficiencies, customisation, the online marketplace opportunity and shopping lists as decisive going forward and provide in-depth analysis on real life business case examples. In the fourth and final chapter the focus shifts to providing an outlook for the sector going forward. The report explains the key learnings around costs and states that leveraging existing asset bases and infrastructure is absolutely vital. Then the real first mover benefits are discussed and we give our view on how the sector will develop when connected kitchens and the rise of the shopping lists is becoming ever more acute. Finally a section of actionable recommendations rounds off the report, where we give detailed recommendations what retailers and FMCG manufacturers thinking about the online sector should do next.

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