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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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    • 07/24/17
    • Retail
    • Consumer Goods
    • Global
    • English

    5 takeaways from our consumer study on Amazon’s acquisition of Whole Foods

    *This blog post was co-authored by Wendy Wallner and Stephanie Scalice Just last month, Amazon announced its acquisition of Whole Foods Market for a whopping $13.4 billion.  As the various hot takes rolled in, we looked to US consumers for their reactions, conducting a survey of 1,000 US adults a week after the announcement.  We learned how many people currently shop with both retailers, what kinds of changes they expect from each company, and what they would and wouldn’t like to see in the future as shoppers. Here are five key takeaways from the study.

    Consumer reaction was mostly positive

    While shoppers are still not certain what the Amazon/Whole Foods merger means for them, the reaction among consumers ranged mostly from positive to neutral.  Of the thousand people surveyed, 23% had a positive reaction, while 38% of Whole Foods shoppers found the news to be positive, followed by 31% of Amazon shoppers (and 43% of both Whole Foods and Amazon shoppers).  Only 10% of consumers found the news to be negative. Optimistic shoppers hope that grocery prices will drop and that delivery fees will be waived for Amazon Prime members.  They would also like to see Amazon start to carry Whole Foods products online — and on the flip-side, see Whole Foods stores use new technology that will make in-store shopping more efficient. One of the bigger barriers to online grocery shopping is the fear that the quality and freshness of products are not as good as what is purchased in a physical store.  As a result, consumers are hesitant to trust the quality when someone else is selecting items for them.  This study shows the Whole Foods connection would give shoppers more confidence in ordering fresh products online.

    Whole Foods shoppers express fear about changes

    Whole Foods shoppers, who typically care more than the average consumer about their communities and causes that align with their own, expressed some concerns over the Amazon acquisition.  Specifically, they hope that their local Whole Foods store will remain open, and that employees will not be laid off or their morale affected.  They do not want their shopping experience to change nor do they want the look and feel of Whole Foods outlets to change.

    There is an existing relationship between Amazon and Whole Foods shoppers

    The study confirms that Amazon and Whole Foods are a good fit.  According to the study, three out of four Whole Foods shoppers have made at least one purchase through Amazon in the past month; and there is also a higher percentage of Amazon Prime memberships among Whole Foods customers (50%) than total US consumers (37%).  Additionally, Whole Foods shoppers are more likely to buy groceries online (26% of all online grocery shoppers also shop at Whole Foods) than the average consumer [22% of US consumers shopped WFM in the past month) .

    Interest in omni-channel grocery shopping

    Although grocery eCommerce is currently a small market, the Amazon/Whole Foods alliance allows consumers to anticipate a future of omni-channel grocery shopping.  While consumers aren’t yet willing to fully commit to purchasing Whole Foods products online (only 9% of US shoppers indicated they would be “extremely/very likely” to sign up for an online grocery and/or meal delivery service through Amazon and Whole Foods), there is some latent interest (22% of all consumers were “somewhat likely”). Another potential benefit to Amazon is Whole Foods’ strong equity in prepared foods.  Not only will they be able to deliver groceries, they’ll be able to deliver meals too, as well as offering omni-channel services like click-and-collect, covering all aspects of food eCommerce.

    Increased customer loyalty?

    An Amazon/Whole Foods deal makes sense and points to some incremental growth for each brand, with a portion of current shoppers indicating that they expect to shop more at both retailers.  But it’s more likely that most will wait and see.  In fact, the study shows that Amazon Prime members, whose shopping habits demonstrate that they aren’t as loyal as one would think, have surprisingly low interest in the merger and its possible outcomes for themThe reason? They are heavy shoppers of all channels and want to keep options open. Their biggest concerns surround their hope that Whole Foods stores remain open and the local business are not impacted by the merger. The main goal for any grocery retailer right now should be stronger loyalty from customers; many shoppers forego the convenience of buying all their groceries in one place to instead pick and choose where they shop depending on what each retailer is good at.  They have different lists for different stores, buying groceries at five different retailers each month (on average).  Will the convenience that Amazon and Whole Foods are able to offer bring back one-stop shopping and increase customer loyalty?  It depends on who you ask, but ultimately it will depend on what kind of offerings and benefits are clearly established to consumers beyond pure convenience. To share your thoughts, leave a comment below or email wendy.wallner@gfk.com or stephanie.scalice@gfk.com.
    • 07/17/17
    • Retail
    • Geomarketing
    • RegioGraph
    • Geodata
    • Picture of the month
    • Global
    • English

    Map of the month: Forecasted stationary retail turnover, Europe 2017

    Europe's largest and most developed economies offer fruitful conditions for retailers, but they can also be fiercely competitive, and in some cases, are near saturation. Results from GfK's recently released European Retail Study bear this out: As a general rule, the greatest growth in brick-and-mortar retail turnover for 2017 is forecasted for mid-sized European markets, such as the Ukraine (+12.3%), Romania (+9.8%), Norway (+6.2%), Hungary (+5.7%), Estonia (+5.5%), and Poland (+5.3%). By contrast, projected growth for the larger economies such as Germany (+1.0%), Italy (+1.2%), France (+2.0%), and Spain (+2.9%) is much more modest. These insights help retailers pinpoint new opportunities for expanding their market share. GfK's Map of the Month for July illustrates these forecasted 2017 growth rates for retail turnover in Europe.
    • 07/05/17
    • Retail
    • Consumer Goods
    • Connected Consumer
    • Global
    • English

    Conquering the Connected Shopper and their multiple paths to purchase

    Conquering today’s connected shopper is a battle. Consumers’ expectations of convenience, choice, price and experience are continually escalating. Whatever you make or sell, the true power rests in the palm of shoppers’ hands. The “always-on” culture of connectivity puts both manufacturers and retailers under intense pressure to stay relevant and create “fans for life”. This is a cut-throat, slim profit environment that is further endangered by emerging hyper-competition from global marketplaces. Conversion is more key than ever. No retailer or manufacturer has a free pass to success. No existing business models are guaranteed. For instance, in the recent past, the generalists and the manufacturers that supplied them were all-powerful. Today, specialists and global market places like Amazon are squeezing the generalist model. Clearly, whatever the sector, whatever the scale or geography, all players must constantly re-evaluate their strategies and tactics to ensure they win the connected shopper’s business. It is essential to constantly be on top of your shopper by focusing on the right touchpoints at the right moment throughout the whole omnichannel path to purchase. So, if you’re serious about conquering the connected shopper, you must understand today’s retail environment and anticipate tomorrow’s trends to plan and prepare for the future.

    The connected retail transformation: Two very different routes to purchase

    Retail is transforming to keep pace with the connected shopper and their demands. We believe that in the future, shopping will either be functional, rational and efficient, or it will need to offer an emotional connection or be an experience. Our two future scenarios for retail in the connected world are rooted in our extensive knowledge gained from researching consumers. What is common to them all is that the shopper is front and center, and has more control than ever before of how they shop and what they buy.

    One: Staying in

    Here the smart home of the future takes over the functional aspects of shopping, ordering and replenishing supplies as they run out. Never fear, this won’t disengage shoppers from brands, as virtual and augmented reality will come to the rescue. For fun, connected shoppers will be able to try on clothes, trial appliances and test drive cars – all from the comfort of their home.

    Two: Going out

    If you leave the comfort of your home to shop, there will be two very different options. On the one hand, much shopping will become uber-convenient, super-fast and easy with in-store GPS navigation, pick up points, automated payments (no queues) and minimal browsing. Mobile phones will have a key role to play, becoming hand-held shopping trip assistants. On the other, retailers will offer experiences, where shopping will be seamlessly integrated into socializing and entertainment. The smartphone will be the connector of the personalized digital and physical retail world, for chatting, browsing, sharing experiences and paying. Whether shopping from the home or when out and about, manufacturers will increasingly focus on their own omnichannel retail concepts. They will want to get closer to their shoppers and find personalization-driven business models where this can deliver a profit.

    Getting up close and personal with the connected shopper

    There is no one “connected shopper”, every consumer and every purchase is unique. For a 360° perspective, you need to evaluate the key target audience segments in detail. How do they behave, what are their need states, how can you meet their expectations? From Gen X, Y and Z to iBrains, Millennials and Baby Boomers, we’ll help you identify and reach your audience with the relevant product, service and experience at the right point in their purchase journey. With more consumers than ever saying they feel overwhelmed by choice, understanding and helping shoppers find the products they really want will become a core tenet of the successful retailer. Relevance and persuasion will become more important as key success factors. As a result, many retail marketing budgets are shifting to content and attribution marketing to be closer to the shopper during the moments that matter. The focus will be less on where the purchase happens, and much more on how you can influence it. Having an in-depth customer understanding is essential if you are to offer shoppers the all-important personalized product or service, such as H&M’s customized dress designed with Google. And it’s most definitely key if you want to anticipate their needs to increase their basket size and grow loyalty.

    Reinventing business models

    Achieving a profit requires a laser-like focus on logistics and operations, constant innovation, relevant marketing, perfect customer service, excellent customer and market intelligence… the list is infinite. By focusing on the connected shopper and building a true picture of buyers of all sorts of products and services, you can identify the business models that give you the best chance of success in the retail transformation. Marco Wolters is Global Industry Lead Fashion, Home & Lifestyle at GfK. He can be reached at Marco.Wolters@gfk.com. hbspt.cta.load(2405078, 'a7c49c12-21d2-41fc-a305-57b021074f75', {});
    • 07/03/17
    • Retail
    • Technology
    • Consumer Goods
    • Connected Consumer
    • Global
    • English

    Introducing the iBrains: Understand how to reach tomorrow’s shoppers

    By 2020, 40% of consumers in Europe, the US and BRIC markets will be “iBrains”, or Gen Z. The first generation fully immersed in smartphones and social media, these digital natives will drive disruption in retail. Always connected, they live in the fast lane. If you are to succeed in the future, you will need to identify, predict and meet their needs. And you’ll need to grab their attention to maximize the opportunities they offer retailers and manufacturers. Here’s how.

    Meet the iBrains

    You’re already familiar with Millennials, but the iBrains – the “selfie generation” – are different. They don‘t know a world without smartphones and social media. While Millennials are tech-dependent, iBrains are always connected, intense social media users and live through technology. They expect brands and retailers to do the same in a seamless, authentic way. They want an identical brand experience, whether they are in-store, online or on their mobile device. For many brands, this represents a goal still to be achieved. The iBrains:
    • are aged 19 or under, most live at home
    • have little spending power, but, with 93% of parents saying their iBrain kids hold sway over what they buy, they are powerful influencers of purchase behavior
    • readily share details of their lives, likes and dislikes across dozens of platforms online
    • expect to engage in two-way conversations with brands in this virtual world
    • will happily share their brand allegiance with others and are more likely to trust their peers than marketers

    How to reach the iBrains

    So far, we’ve shown that iBrains present brands and retailers with many growth opportunities. Compared to Millennials, they are more open to buying in-store, and in general they see no difference between online and offline. So, how should retailers prepare for the arrival of the iBrain wallet? Firstly, it’s key to be available 24/7 across all channels and devices. The mobile is the handheld personal life assistant of iBrains and they reach for it first when thinking about making a purchase. It connects the physical and digital worlds and holds the key to the personalization you need to offer to win over this group. Anticipate the iBrains’ needs and issues, and provide the solutions before they themselves identify them. Achieve this, and you’ll make fans who are willing to publicize their brand loyalties. Social media is extremely important to iBrains when deciding what to buy and where – according to our FutureBuy survey*, 59% in APAC and 34% in Europe say it’s an important source of information for making the best product choices. For iBrains, previous experience with a retailer is key for 57% when deciding whether to make a purchase (versus 49% of Gen X). So too are the opinions of family, friends and colleagues (50% versus 35% of Gen X). They also much more likely to search other shoppers’ online reviews (46% versus 30% of Gen X). Speed is also essential to iBrains. They will accept a “good enough” product or model and have it now rather than wait for a better one. Of course, you need to react fast to grab their attention – iBrains are super multi-taskers. Or, to put it another way, you only ever have their parti­al – never full – attention. Also, don’t ever ignore the fact that they are more impulsive than Gen X. Brands that get their offer right can really maximize on this trait. Finally, it’s worth noting that iBrains are not loyal to any one brand. They browse intensively to find the best deal. This is the case for 60% of iBrains in APAC and 55% in Europe. However, brands that involve them in shaping products can win vital brownie points – particularly from iBrains in APAC where 64% favor this option versus 53% of Gen X*. In Europe, 46% of iBrains value this involvement versus 36% of Gen X.

    The iBrain shift

    • The iBrains herald a new era in retail – in fact, it’s a revolution. Retailers must think differently. They must shift from offering new things to buy to new things to do, from telling a story, to conversing. They also need to move from making a perfect product slowly to making a better product quickly with iBrain collaboration. Here are some other pointers:
    • Be visible online and on social media. iBrains prefer peer-to-peer social media platforms such as Snapchat and Instagram over Facebook. Use social media and online advertising to get their attention.
    • Keep their personal information secure. Concerns about the security of personal information rank high and are a primary factor in their preferences for shopping in-store. Make sure you protect their financial and personal information.
    • Share diverse images. Make sure your advertising, window displays, website and social media accounts include images of diverse customers, and treat all customers with respect, no matter their age.
    • Let the music play. Incorporate music into your store experience if you want to attract Gen Z.
    • Help their decision-making. An iBrain’s shopping journey typically includes lots of online and offline research, getting opinions from peers in real life and online, and looking for the best value and price. You could describe iBrains as “feedback fanatics”. Stay with them during the process.
    • Experience matters. Retailers must create places – stores, websites, online communities – where iBrainers feel welcome walking in and just as wonderful walking out. Brands that help iBrainers to define and express their individuality and lifestyle will succeed with this group.

    Retail is on the brink of a revolution

    Retailers and brand owners need to fundamentally reconsider their proposition if they are going to capture the hearts, minds, wallets and attention spans of this constantly connected, partially attentive generation. A generation of consumers who will determine and dominate future shopping behavior. Marco Wolters is Global Industry Lead Fashion, Home & Lifestyle at GfK. He can be reached at Marco.Wolters@gfk.com. hbspt.cta.load(2405078, '16d3b306-a448-4b8a-ab3a-96cd639045fa', {});
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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.  

  • Consumer Panels

    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.

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    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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    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.

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    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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    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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    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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