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Can Retailers Make the Connection?

NEW YORK— You use your smartphone for communicating. You talk, you text, you email, you surf. But did you know you should also shop for groceries with it?

Buying groceries and ordering food via smartphone or tablet is no longer a luxury—it’s a necessity, according to Nielsen. And c-stores should be ready to accommodate this evolution.

“The connected-commerce era has arrived,” said James Russo, senior vice president for global consumer insight for New York-based Nielsen, during the July 15 webinar “The New Global Landscape.”

“We are at an inflection point,” he said. Retailers need to “greet consumers like we never have before, and capture them where they are because you’re going to be seeing them [in store] less often. Three-quarters of global consumers seek online access to commerce, and it’s not going to slow down.”

Russo used a global lens to break down trends across developed nations (United States, European countries) and developing nations (Asia-Pacific). There are large differences of values between consumers in both nation types, but there were also elements that bound both.

For example, people will always physically visit stores because they like the experience and can evaluate products closer there than online, Russo said. Quite simply, “people like going to stores,” he said.

Consumers are also seeking another type of convenience—that of an “anytime and anywhere” shopping experience enabled by an increasing number of digital touch points. Nielsen found that people all over the world are using their phones and tablets to make shopping lists, research products, share information and locate stores.

Top in-store digital options that consumers regard as most relevant include self-service checkout and hand-held bar-code scanners. As Russo pointed out, “technology is not driving the change”—consumers are.

The use of mobile coupons and online shopping are gaining momentum, poised to grow significantly over the next few years, Russo said. Ordering packaged foods for home delivery saw about 25% of global consumer adoption, with 50%—or 1 billion people—indicating they want to try online shopping.

For mobile coupons, the global average adoption rate is about 18%, with U.S. consumers overindexing at 27%, along with Israeli consumers at 33%. 

Small World After All

When global consumers set out for brick-and-mortar stores, small formats are dominating their visits, with drug chains (4.1%), small supermarket (2.8%), traditional (2.8%) and convenience (2.5%) leading the pack in driving retail growth.

Large supermarkets and hypermarkets have the lowest growth rate, both at about 1.9%, according to Nielsen. Consumers are shifting their preference to smaller-format stores as a result of what Russo called “hyper-localization and proximity retailing”—or creating a retail experience that is relevant to each local marketplace. “Find the right level of segmentation to connect with your consumers and secure the buy wherever they are,” he said, indicating that this phenomenon has become more imminent as the number of “mega-cities” increases.

Other observations from Russo during the webinar:

  • Health and wellness is poised to become “the next global movement,” with millennials driving most of it. Russo called it a “food as medicine” perception.
  • Retail can be slow, and shoppers do all the work. Retailers, in essence, have to do more of the heavy lifting.  
  • Retail growth is proving to be challenging in Europe, with most countries experiencing minimal growth, with the exception of the United States (4% retail growth) and China (12%).
  • Forty-nine out of 60 countries have grown their consumer confidence index in the past year, with Germany and the United States considered “movers.” The United States and China both saw consumer confidence and spending intentions on the upswing, with France, Spain and Italy on the downswing.
  • The price of products can lead to disloyalty, which encourages brand switching. The solution can be to underscore “differentiation.”

Russo put the global retailing stage in perspective by citing the country of Dubai, which is one-hundredth the size of the United States, but consists of a significantly diverse population within a small footprint: Fifty-five different nationalities reside there. “Marketers there are identifying what the ‘destination categories’ are,” he said.   

Steve Dwyer


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