Are food retailers facing doomsday?

Food retailers are under great pressure, more than ever before. Amazon are set to potentially take the home-delivery market by storm, the ‘discounters’ are emerging as mainstream competitors, and the newer generation of shoppers - the millennials - are exhibiting new and very different buying patterns to previous generations.

Shelly Palmer, an independent industry advisor raised the ultimate question in his keynote speech at FMI Connect: Are food retailers doomed?

If food retailers don’t adapt to changing circumstances with a view to continuous improvement then the answer is YES. But, food retailers have one major weapon in their armoury that drives footfall and margin and US retailers need to dramatically increase its deployment if they want to avoid the doomsday scenario. This weapon is store brands or private brands.

The USA languishes stubbornly behind European retailers with regards to the percentage of sales of private brands which is around 22% in the US and 45% in Europe. Increasing this percentage isn’t just about creating more ‘me too’ products, it is about food retailers gaining a deeper understanding of why different people are shopping with them and what the real wants and needs of their shoppers are.

As Lynn Dornblaser, Director of Innovation & Insight at Mintel, said later in the day during her presentation of the ‘Top Trends in Global Private Brands’, US food retailers need to create more new and innovative products that their customers want.

But how can food retailers gain the depth of insights from shoppers without it taking a very long time and costing a lot of money? The answer is to adopt a new approach and deliver what we call a Unified Brand Experience. There are two key steps towards achieving this:

1. Harvest all customer feedback. This includes all customer generated content about brands from all existing shopper touchpoints along with all product quality test results. Pulling together this information about product performance will provide the retailer with a galaxy of trends and actionable insights about their brands and products. This data is already available, it’s just not being used! Collecting all feedback together in this way helps the retailer to form ‘One View’ of product performance and customer wants and needs to inform the decision and innovations which will provide competitive rather than ‘me too’ products.

2. Share this information with suppliers. As the makers of the retailer’s private brand products, suppliers are the specialist product developers. They are the manufacturing experts. By sharing feedback with them, they will be able to help to ensure quality, to generate new ideas and more innovative products based on these ‘real’ customer insights. Sharing insights and building effective communication between the supplier and the retailer enables them to work more cost effectively and efficiently together as ‘One Team’.

Creating and sharing One View of product performance is quicker and easier to do than it sounds, with results appearing in a matter of weeks. This short (2 mins) video explains this concept in more detail:


Find out how one US retailer did just this resulting in improved quality, product innovation and an 18% increase in sales.

Turn a doomsday scenario into successful transformation! If retailers work with their suppliers as One Team around a shared One View of product performance, they can achieve their private brand goals and deliver a Unified Brand Experience.

Tags: Product development, Supplier engagement

Kieran Forsey

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