The retailers have to upgrade their business strategies if they want to meet the demands of their customers and increase their profit margin. It will also be better for them to introduce themselves to technology in this era of online shopping.
FREMONT, CA: One of the dynamic and highly competitive industries is grocery retailing, and the competition is becoming fiercer due to the implementation of advanced technologies. As the economy is seemingly emerging from the downturn, the industry leaders are getting eager to understand the mindsets of the consumers. However, if the grocery retailer wants to reshape the competition in the next few years, they have to respond to four growing trends. The trends that the retailers have to follow are a permanent shift to value-seeking among consumers, rise of technology-enabled shopping, more significant online encroachment, and format and merchandise innovation.
When grocery retailers want to respond to the forces successfully, they have to rethink the strategies. This means the retailers have to evaluate their overall strategic value proposition and the significant capabilities that will distinguish them from their competitors.
Grocery retailing is a dynamic and highly competitive industry, it requires increased merchandising and marketing expertise, innovation in all dimensions of retailing and manufacturer collaboration, heightened understanding, and attention to a new shopper mindset and a renewed focus on operating costs. Four other essential forces can reshape the competition among the grocery retailers in the next few years. The retailers who will respond and exploit the strengths will prosper and grow. Retailers that react to and use these forces will thrive and grow, and the ones who will not follow the effects may decline profitability or perhaps extinct.
The four forces will have a significant impact as the grocery retailers and manufacturers navigate the unexplored areas of retailing. The forces that will impact the retailers and lead them successfully to achieve success in the market are given below.
1. Deep shopper understanding
The retailers have to win their shoppers by understanding and reacting to their ongoing behaviors. The retailers who understand their customers can create a difference in the market than the others as it is essential to meet the demand of the customers. However, the policy may also require enhancement in the shopper loyalty programs or development in the new capabilities around data analytics.
2. Digital and mobile marketing
Digital and mobile technologies can serve different roles for different retailers. The part the digital technologies serve for a retailer will depend upon how they are using it to increase their profit. For example, a hi-low pricing retailer may use mobile technologies for delivering their targeted manufacturer-funded deals. On the other hand, a premium player may supply their customers with customized help or information about any new or unfamiliar products. Moreover, mobile technology will enhance the shopping experience of targeted shoppers.
3. Multichannel retailing
With the upliftment of technology, there is a slow degradation of the traditional grocery stores, and consumers are now more accustomed to online grocery shopping. Every retailer must respond to whether boosting the in-store experience of the customers will defend the traditional business or creating a real multichannel capability will do so. A multichannel retailer will have the ability to integrate online, in-store, and digital mobile offerings, so that they can meet the buyers' demand with the support from proper back-office systems and supply chain.
For some of the retailers' innovation in production and merchandise can be a route to success. The newly branded companies or private-label retailers can bring some difference in their banners or conduct some innovative sales that will create an impression for their brands in the mind of the shoppers and also make them different from the others.
If there is instability in the market or disagreement among the senior team, it is not advisable to evaluate and choose a way to play. Indeed, there are high possibilities that some of the recognized methods to play in grocery retail such as EDLP, hi-lo premium will become outdated. For example, there is no significance in becoming hi-lo retailers if the maximum of the shoppers is seeking deals.
When the retailers have their strategies ready to appeal to more customers, they have to turn their focus on the cost. The retailer will not only able to focus on reducing the growth but also drive to grow stronger in the market by focusing on their strategic position and being clean on the procedure they want to follow to compete. By excluding unwanted and unnecessary costs, retailers will not only become more effective but also more efficient.
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