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Smart insights: Retail

The pace of change in the retail industry is driven by digital advancements: more touchpoints, more product reviews and comparisons for consumers to access anytime, anywhere. And more variety in the path to purchase of shoppers.

To stay competitive and relevant, retail businesses need to understand evolving shopping behaviors and target group demands. They need to apply this knowledge to create differentiated experiences across both digital and physical environments.

Our retail industry research experts provide the insights to support you at every stage: from measuring your shoppers’ experiences and paths to purchase, to monitoring retail performance and trends.

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    • 05/23/17
    • Retail
    • Promotion and Causal Retail
    • Global
    • English

    Track the execution of launch campaigns to ensure they achieve lift off

    As a manufacturer, you’ll know that the launch phase of a new product is absolutely critical. As our recent POS Analytics study in Japan shows, product life cycles can be short. As much as 90% of the overall sales of mobile PCs and smartphones in this market are delivered in less than 10 months of their launch1. You have just a small window of opportunity to make sure your product secures its target share of market and sales against the competition. You will therefore invest heavily in a sophisticated launch campaign with key retail partners to promote your product. But how can you be sure your trade marketing campaigns are being executed as agreed?

    Monitor key retail partners’ performance to get the maximum ROI

    Let’s look at the major smartphone manufacturers. Three have recently launched new generation flagship models. They will want to know how the launch promotions they have designed and agreed with their various retailer partners are being implemented. Is their product achieving maximum visibility across retailers’ channels? Are they using the right video online? How is the product positioned in-store? How is it featured in their seasonal TV advertising? Often trade marketing campaigns focus on promoting a particular technical feature or benefit, like an infinity screen, or a sophisticated camera that can take high-end pictures for posting on social media. If you are running a feature-led campaign, you will want to ensure that retailers are promoting the relevant selling point to consumers across touchpoints.

    Determine how retailers are implementing the campaigns you’ve devised for them

    You should monitor online, in-store and print advertising to determine how retailers are implementing the campaigns you’ve devised for them. You will know if your product features prominently in their advertising and promotional materials at the point of sale, if it is reachable within five clicks on their website and whether it appears in one of the “golden locations” (i.e. the front entrance of end of aisle, etc.) in their stores. Similarly, you can monitor the execution of your competitor’s campaigns. By combining intelligence on the execution of different elements of your trade campaigns by retailers and their sales data, you can determine the success of your campaigns. More importantly, you can align your efforts and investment – in different channels, campaign elements and retail partners – with your results. This level of transparency about your campaigns and retail partners’ performance is invaluable when it comes to agreeing campaigns and your level of investment with retailers. Contact me at Karsten.holdorf@gfk.com to find out how we can help you to optimize your trade promotion management. 1 Our recent GfK POS Analytics studies of durable goods in Asia provide evidence of increasingly short product life cycles. In Japan, for example, 90% of the overall sales of mobile PCs and smartphones are achieved in less than 10 months. However, selling the last 10% of these products takes longer than the entire time needed to sell the first 90%, despite the best price incentives being employed for the final 10%. hbspt.cta.load(2405078, 'c77fd723-a4d7-48d5-bc79-1bb260aeed50', {});
    • 05/23/17
    • Retail
    • Technology
    • Point of Sales Analytics
    • Global
    • English

    Maximize your media effectiveness and investment with our five-step program

    In our interactive white paper, we share our five-step program for maximizing your media effectiveness and achieving more for your marketing budget. 
    • 05/03/17
    • Media and Entertainment
    • Retail
    • Global
    • English

    Valuing experiences over ‘stuff’: How consumers are shaping retail and media

    Whether we are talking shopping, viewing content, traveling or just casually socializing with friends, experience takes center stage for today’s consumers. The reason for this is that experiences are the modern world’s social currency, so the more we fight for them the better we can market ourselves to others. And the more experiences we gather, the better individuals we become, a truth that touches a nerve across age groups and generations, but more so for the up-to-35 year olds, Millennials or just a good mix of Gen Y and Z.

    Focusing on experience in a technologically evolving environment

    Rapid technological changes have impacted the way consumers perform everyday tasks. Internet enabled smart phones and tablets have placed the power in the consumers’ hands. Literally. For the last few years, online purchasing has been gaining a lot of momentum, beating the lines, registers and check outs of brick-and-mortar stores. The advancements of app shopping technology and the rise (until recently) of shopping loyalty were this trend’s enablers. But do consumers now want more? Whilst technology (ie. the internet) is used widely to search for information about a product, check online reviews, compare prices and check availability, experiencing the actual product/item is emerging as an intermediate step before the final purchase occurs. Think of a typical pre-Christmas shopping day. Consumers get experiences dosed up on atmosphere, lights and odors by visiting shops and malls whilst they are examining present options only to go back home and buy them online that same evening, often at a lower price. Now, this is no longer a behavior observed before the Festive season; technology ignited consumers combining seamless online and offline purchasing (and vice versa) is an everyday occurrence. The two channels have become completely intertwined in the consumer’s mind. Physical retail’s response was to embrace new ways to fuel the consumer’s imagination and please the senses while overcompensating for the digital medium’s inability to do so. As a result, stores are now becoming less about replenishment whilst focusing increasingly on experience rather than transactions.

    The ‘experience’ revolution’s effect on media and entertainment

    When it comes to experiencing content, shying away from physical purchases of DVDs and Blu-rays is nothing new. What’s more interesting is consumers’ muted response to downloading content. Most recently, consumers spoke loudly by remaining unexcited about Netflix’s newly introduced downloading option – only 3% of its subscribers have downloaded content since its launch back in November last year. (© GfK 2017 SVOD Content Consumption Tracker). Owning content, even if it’s just digitally, comes with the headache of storing and is missing out on ‘the thrill of the moment’ experience, which comes to life when deciding what to stream and how much of it. Streaming revolutionized the means to watch content and gave birth to a whole new viewing experience: binge-viewing.

    The binge-viewing phenomenon

    Two decades ago, back-to-back episodes of our favorite series was more than enough for a series enthusiast to make an appointment to view and turn the evening into a social event. The much cooler version of this, which gives full control over to the viewer about ‘what, when & how much’, is the binge-viewing phenomenon. ‘I stayed up all night to catch up on X’ is now a viewing treat even for the younger Gen Xs (around 40), who (via the delights of streaming) relive their student life instantanés. The evolution of our viewing experience re-shaped the watercooler moments in the office, which have been replaced with questions such as: “how far along are you?”, whilst there is a certain pressure on viewers to have covered (or sampled at least) the most talked about shows. To finesse our newly experienced viewing addiction, content creators had to revisit their scripting techniques; drip-feeding thrill and suspense throughout all episodes rather than keeping cliffhangers for the end of a series. This new, far superior viewing experience has created monster consumers, who expect everything (all content) on anything (all platforms), leaving content providers scratching their heads on the new viable model. Far from implying that the streaming technology is directly linked to the death of physical media, it feels that the ease of streaming content legally (or illegally) has further downgraded the sense of ownership here with DVDs and Blu-rays gathering shelf dust and the odd video rental shop serving as a museum of the pre-digital era.

    Does the balance between experiences over ‘stuff’ shift when our home is the focus?

    Technology has exploded and even though consumers take notice, they are the ones who dictate the rhythm when it comes to adopting it. Especially when it comes to technology targeting their own home. Our homes may be increasingly seen as entertainment & hobby centers, but first and foremost, they remain our private retreats. Virtual Reality gadgets and Smart Home tech are promising even more elevated sensory experiences to the average consumer, however their appeal still remains quite niche, limiting their popularity to birthday presents for loved ones. Cost, security issues and data privacy concerns seem to counterbalance our urge to create edgy experiences in this instance. Instead, we are seeing a U-turn to simpler things and times, like the taking up of cross stitching or micro brewing by sub-groups of the younger generations, who perceive such hobbies as an antidote to fast technology. One thing is certain: The search for memorable experiences continues, not least because compared to possessions, these intangible, non-measurable moments generate a feeling of happiness that doesn’t evaporate. *This article was originally posted on TM Forum Live Mary Kyriakidi is the Director of Media & Entertainment at GfK. To share your thoughts, please email her at mary.kyriakidi@gfk.com or leave a comment below.
    • 05/02/17
    • Retail
    • Consumer Goods
    • Global
    • English

    Will online become the channel of choice for technical consumer goods?

    Internet sales have grown remarkably in recent years in Europe. In the technical consumer goods (TCGs) category, according to our POS Tracking data, online’s share of overall sales in terms of value passed the 10% mark about ten years ago. It exceeded the 20% milestone in 2014 to reach almost 24% in 2016. But is this trend set to continue? This is the big question and the cause of many a sleepless night for retail managers and sales and marketing directors.

    Online’s share of overall sales in Europe varies between countries and product groups

    Our POS Tracking data shows that many markets in Europe can be considered mature in terms of e-commerce, with their online sales accounting for 20% or more of overall sales of TCGs in 2016 (see infographic). Diving deeper into our POS data, online’s share of overall sales for certain categories of TCGs in certain countries is particularly strong at close to – or more than – 40%. This is the case with:
    • photographic equipment in the Czech Republic, Ukraine, Slovakia and Great Britain
    • IT products in the Czech Republic, Slovakia and the Netherlands
    • telecommunication with Czech Republic and the Netherlands
    • small domestic appliances in the Czech Republic and the Netherlands
    • major domestic appliances in the Czech Republic and Great Britain.
    Other categories of products that you might think would sell better in a physical store where they can be seen and tried first, also sell well online. Internet sales of vacuum cleaner robots, for example, have reached about a 60% share of overall sales of this product in Germany, the Czech Republic and the Netherlands (see table below). Online’s share of overall sales of wearables in Germany, Great Britain and the Netherlands, and drones in Germany and Great Britain, have achieved a similar level. In some cases, it has increased its share further still recently. But this trend isn’t just impacting the sales of the latest generation of TCGs. More traditional white goods such as tumble dryers are also selling well online in certain countries. In the Czech Republic and Great Britain, for instance, online’s share of overall sales for this product is about 50%.

    Drivers of – and differences in – online sales penetration

    The balance between online and traditional channels’ share of overall sales is fluid and influenced by a range of factors including category idiosyncrasies, retailers’ strategies and shopper behavior. One of the biggest drivers of online sales has been retailers’ pricing strategies. As internet sales have matured, we’ve observed a general move by retail players towards aligning their online and offline prices in line with consumers’ belief that a product should be priced the same regardless of whether it is sold online or in a store (GfK FutureBuy, 2016). In Germany, for example, on average, the same TV is priced the same whether it is bought online or offline, and has been for the last couple of years. Our POS data shows that online’s share of sales for TVs in Germany is about 20%. However, there are examples where a product is priced lower online, as is the case with drones, in Germany, and online’s share of sales is higher at 61%. Pricing strategies impact on channel choice Price Index Development 2008 – 2016, Germany 1 Top 50 identical items sold online and offline | Based below 50 items Saving money, however, is only one motivation that drives consumers’ purchase journeys and channel choices. While the online option is often chosen for financial and convenience reasons, seeing and feeling a product before purchasing it clearly drives shoppers to visit physical stores. Top five factors driving consumers’ channel choice GfK FutureBuy 2016

    Consumers currently favor an omnichannel approach

    The differences between online and traditional shopping channels have so far led consumers to use them both on their path to purchase. What the availability of internet shopping has done is provide consumers with a level of transparency on pricing, among other things, that has encouraged them to adopt an omnichannel approach to shopping. They know that by conducting their own research across online and offline channels before making a purchase they can get the best deal.

    So, what of the future of online sales?

    Will the growth in online sales share of overall sales continue? If consumers favor using channels for different reasons, will we instead arrive at a point of balance between online and offline sales in the future? There is one certainty: we cannot sit back and wait to find out. The retail world is constantly changing. Neither online nor traditional channels’ share of overall sales of TCGs is fixed. To the contrary, they will continue to fluctuate and be influenced by Connected Consumers’ shopping behavior, and retailers’ – successful or unsuccessful – strategies and tactics for driving channel choice. ********** Source of data: if not stated otherwise, GfK POS Tracking Markus Tuschl is the Global Director of Digital Retail at GfK. To share your thoughts please email markus.tuschl@gfk.com or leave a comment below. hbspt.cta.load(2405078, '10b29126-0dcd-40d7-90b1-607513f3193b', {});
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    Brand and Customer Experience (BaCE)

    Brands are under pressure to develop emotional connections and relationships with consumers and business decision makers.  Brands need to respond in-the-moment, to enrich the customer experience – and develop strategies that influence ”moments of truth” throughout individual brand journeys.  

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    Consumer Panels

    Your business is all about your consumers. So understanding them is essential in ensuring your products and services meet their needs, and in identifying opportunities for growth.

    Our international consumer panel data and research expertise provide you with smart customer insights into who your consumers are, their attitudes and behaviors, across channels.

  • Digital Market Intelligence (DMI)

    Digital Market Intelligence (DMI)

    When consumers shop, search, communicate, gather information and engage with companies or brands online, they behave differently depending on which device or screen they are using. They expect a consistent experience regardless of the channel or device they are using.

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    Point of Sales Tracking

    Retailers and manufacturers are under pressure to develop products and services that maximize sales and profit and to keep customers coming back.

    Success relies on having the most up-to-date sales data, combined with robust analysis to understand which products and services are performing well in the market – and which are not. With this information, clients can set clear strategies for commercial growth and increase return on investment.

  • Shopper

    Shopper

    Digital continues to open up new paths to purchase, changing how and where people shop. More and more data becomes available every day, as shoppers embrace multi-channel brand experiences.

    To stay competitive in this big data, multi-channel environment, businesses need to identify and leverage the most relevant data along the entire path to purchase. With this, companies can optimize each step of the shopper journey. 

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    User Experience (UX)

    Our user experience (UX) research and design experts help our clients create and improve customer experiences for existing or new products and services

    Today’s consumer is bombarded with promises for compelling experiences. They are sophisticated and demanding.  To be successful, a new product or service needs to be intuitive, usable, engaging and desirable. The user experience needs to be emotional in order to be memorable.

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    Our geomarketing solutions and consultancy provide our clients with smart insights into location-specific factors that impact the success of business sites, shops, sales territories, target groups, as well as chain store and distribution networks.

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    Consumers face a complex array of brand touch points every day of their lives. To deliver a consistent brand experience, marketers need to know how consumers are actually experiencing their brand. Our mystery shoppers give you all the help you need to understand these experiences, and respond to them to maximize the return for your business.

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