By looking at other countries and the patterns that are shaping their retail industries, we can learn a lot about what does and doesn’t work, while also gaining some insight into the future of ours.
At CROSSMARK, research, development and technology are critical to our success. We realise the importance of identifying not just national challenges and trends, but also the impact of global retail conditions on our local market; of particular interest is the use of technology and how nations such as the UK and US are leading the way through new innovations. By looking at other countries and the patterns that are shaping their retail industries, we can learn a lot about what does and doesn’t work, while also gaining some insight into the future of ours. So just what are the big topics, new technologies and predictions for 2019? Let’s take a look.
Big topics this year
- The rise of private and phantom labels
The number of non-branded labels appearing on shelves, not just in our supermarkets but online, will continue to rise this year as the major supermarkets and even Amazon aim to drive profit growth. It’s not easy to compete with private label products on price, especially for smaller suppliers who struggle for shelf space alone, but brands who are prepared to invest in innovation and leverage the power of instore marketing should thrive.
- Kaufland’s arrival in Australia
Kaufland’s launch in Australia is imminent, with sites already secured in SA and Victoria. We’ve been watching this for a while (it was on our list last year) and will continue to be a hot topic in 2019. It will certainly be interesting to see how the arrival of this hypermarket, which already has more than 1200 locations in Europe, impacts our FMCG sector. With Aldi also going from strength to strength, could this finally be the end of the duopoly?
- Coles and Woolworths launching small-format / express stores
For those who are familiar with the Tesco Express and Sainsbury’s Local stores in the UK, it’s a wonder why it’s taken these smaller format supermarkets so long to start appearing in Australia. With consumers more time poor than ever, convenience is key and the days of doing one big weekly shop are long gone for many. Consumers want to be able to pop in on their way home from work and grab a few bits and pieces, whilst also reducing waste.
- Demand for sustainable and eco-friendly packaging will continue to increase With the demise of free plastic bags in supermarkets this year, and the subsequent uproar of Coles’ plastic Little Shop items, eco-friendly packaging is at the top of consumers’ agenda. More and more customers are looking to do their bit for the planet through what they buy and brands will be responding accordingly.
What’s new in the US
- Walmart’s digital playground
Now there’s even less reason for families to go into a physical toy store; Walmart has created the online Walmart Toy Lab, described as a "digital playground," where kids can use home computers or tablets to access and play with 20 toys on the retailer’s Top Rated by Kids list.
- Walmart’s use of technology to identify and help unhappy shoppers
Top-notch customer service is key to retaining customers in store. In today’s digital age, where technology is used to improve most aspects of our lives, technology is now able to identify unhappy shoppers! Through the use of facial recognition technology, Walmart is now using the technology to identify shoppers who are unhappy or frustrated. That data can then be used to inform store managers to open new checkout lines or identify a customer needs to be personally attended to.
- Nike Arena gives customers a personalised experience The ‘Nike Arena’ in the brand’s new flagship store doesn't actually have any product on it. Instead there is a large customisation area, where consumers can make changes to a pair of shoes they like. For example, they can change the colour of the laces, the Swoosh logo, or the whole shoe as well as the ability to make other artistic changes. Not only does this offer them a more exciting and personalised product, it delivers that all important instore experience.
- Augmented Reality (AR) will become more widespread for fashion and home design retailers. Ikea was one of the early adopters of AR technology with the launch of its Ikea Place app which allows customers to virtually ‘place’ furnishings in their space to see what it would look like. All of the products are 3D and true to scale allowing customers to check it’s the right size, before they buy it. This is a great example of using technology to make shopping more convenient and we expect to see many more brands follow suit this year.
- More ‘big name’ retail store closures or filing for insolvency It felt like an endless roll call of store closures in 2018, both here and overseas, with iconic retailers like Sears and Toys R Us shutting up shop. In Australia, it’s evident from recent figures published that some of our department stores are struggling and we wouldn’t be surprised to see Myer or even Target file face closures in 2019.
- More reliance on robots and automation We already deal with robots online to help answer our queries and large retailers such as Amazon use them to help pack and ship items. Therefore, it’s inevitable that, at a time when brands and retailers are exploring ways to save on labour costs, and as the technology becomes more accessible, more and more retail jobs will be fulfilled by bots.
It’s certainly an exciting yet challenging time to be in retail and we’re looking forward to working with all our clients in 2019, to help them navigate this increasingly tricky landscape. By drawing on our industry expertise and insights, and leveraging our investment in technology, we’ll continue to ensure that brands are staying ahead, driving sales and remaining innovative.
Andy has a deep understanding of the Australian retail environment and its shifting dynamics. Prior to CROSSMARK he has held a number of senior leadership roles in Australia and the UK, delivering retail strategy and field marketing initiatives for the blue chip brands. Andy is a firm believer in the power of data analytics to boost sales performance for brands and retailers.