Retail Trends for 2015

After the flurry of Christmas trading results it is time for retailers to take a step back (briefly) to assess what to do differently next year; how to prevent the same mistakes and how to build on the successes. If Retail Remedy was assisting in that exercise we would be looking at the following trends for inspiration.

Order fulfilment

After the massive volume spike following Black Friday and the surge in click and collect, we expect retailers to significantly invest in their delivery solutions and be seeking greater efficiencies and faster processing in store. Reliability will be the watch word, both internally and in terms of marketing themselves to the customer.

Another watch word will be collaboration. The Ebay Argos partnership is working well offering advantages to both retailers. Expect more to follow suit, utilising space and location.

Experiential retail

Digital mirrors, virtual catwalks, music gigs: the retailer is enticing the customer away from their tablets and back into stores by offering an experience, a gimmick, yes but one that can lure the curious and tempt the sceptical.

Experiential retailing isn’t limited to physical stores either. Where a website was transaction-centric, scoring sales through intuitive navigation and immediate stock information, the customer is becoming more sophisticated and expects a ‘wow’. This will take the form of interactive tools, how-to videos and editorial content designed to upsell. Of course, this is layered on top of a seamless transaction journey.

Tech

Ensuring that the right product is on the shelf in the right place at the right time is the back bone of retail particularly when sales are concentrated into a short time window. The way in which that exercise is performed is reliant on algorithms and integrated systems between the supplier, the retailer and the customer, shortening lead times and allowing increased agility.

Expect the customer to be using their mobile to scan their shopping, drones to perform stock checks in aisles sending live updates to suppliers as it goes, RFDI data to automatically update the price of the product on the shelf… eventually.

What shouldn’t change is that the retailer must always keep the customer at the core of what they do and how they do it. Perhaps we will see a trend towards more retailers being reminded of that.


Retail Remedy provides bespoke, results-focused consultancy for retailers globally, from established brands to high-growth start-ups. Get in touch.

The Grocery Christmas Story

The Christmas POS is down (mostly) and Valentine’s day merchandise and Easter eggs are on the shelves. The peak weeks are over for another year but how did the grocers do? We won’t know for sure until the trading statements are issued over this week and next, but city forecasts are not favourable on the whole.

Waitrose we already know pulled in a 2.8% like for like sales increase for the Christmas trading period, boosted by excellent online grocery orders despite a headline grabbing moment when delivery slots disappeared. The investment in brand and fulfilment has paid off and as a long term strategy will continue to benefit Waitrose as it trades through 2015.

We have seen that Lidl sold more champagne over Christmas than it did semi skimmed milk. Safe to say the advertising and the social media campaign #lidlsurprises, which will carry it through the year, is a winner. We expect that Lidl will start to close in on Aldi and could take the lead as the largest discount supermarket.

Meanwhile Tesco have dipped a toe into the discount playing field with a trial in three of the Tesco owned One Stop convenience stores. How, or if, this will fit into Dave Lewis’ plans will become clearer on Thursday with the release of its trading figures and a city announcement later in the day. Christmas sales will show a like for like decline but could be better than have been recently bolstered by Lewis’s tactical price cuts and staffing increases. The main message for Tesco when it reports won’t be how it traded but how it will trade in 2015 and what it will do about the long list of issues it faces, not least of which its redundant space.

Sainsburys are also expected to report a decline in like for like sales and with no significant investment in Black Friday won’t have changed its fortunes. 2015 for Sainsburys must be about rebasing its strategy and building on its brand values. The focus on Netto and competing with the discounters has caused a drift in strategy to the detriment of the brand and sales but by the same measure, so has complacency. A wake up call is overdue.

Morrisons will release its Christmas trading report next week but that could be the bigger story of Christmas 2014. Forecasts suggest it may have turned a corner; nothing as exciting as a sales gain but certainly a lesser decline than it has experienced of late. Watch this space.

Christmas wasn’t a winner for the majority but the grocers with the clearest strategic direction and best execution in store will have faired the best; the retailers that have been struggling, have continued to struggle.

The only guarantee for 2015 in the grocery sector is that it will be brutal and those in senior roles shouldn’t take anything for granted.


Retail Remedy provides bespoke, results-focused consultancy for retailers globally, from established brands to high-growth start-ups. Get in touch.

Range Transition – A basic skill not yet mastered

By Phil Dorrell, Managing Partner, Retail Remedy

Having spent over 30 years in various different retail environments and another 6 years as a retail consultant I consider execution fundamental to keeping customers engaged and coming back. The sticky bit of retail is more often where the rubber meets the road than in the higher environs of the strategic board room. So why is it that retailers still fail to get this right so often?

If I was to mince my words I would probably gab on about the needs of the range out doing the needs of the stores and that the stores have to be flexible in their approach, using long lost skills to dress problems away. That would be missing the real point however.

New ranges and new products are exciting both in supplier’s, head office’s and in customer’s minds. They are intoxicating in a way, they become the reason we do what we do. The defining moment of a buyer’s year can be the range review, it becomes the make or break of a buyer. And this is where it goes wrong.

On a recent visit to Tesco I witnessed the abandonment of space within their frozen food section as they made the transition on ready meals. The retailers nightmare, gaps left to wallow over a busy weekend with nearly 20% of the range unavailable and no teasing about the new offer that might be coming. In truth Tesco normally get this right.

What really worried me was the visit I took to B & Q over the Christmas break. I thought I would fit some new lights to the Kitchen and planned what I needed to make the change. Shame that B & Q did not do the same. The market is changing from Halogens to LED’s and yet the largest home DIY provider in the UK does not seem to be able to handle this change at all. Mixing the types of bulbs, fittings, confusing in the packaging differentiation and letting normal merchandising rules go. No good, better, best, no colour or type blocks, no explanation of the change in progress or attempt to dress the section to cover the gaps. Isolated store? Nope. The same horrendous section was in play in the store 6 miles away.

We often write about some heady subjects like strategy and market forces. I think that at times we just need to remember the basics of retail, if you cannot execute a range review that only impacts your customers (and bottom line) positively then start asking questions of the Central Operations function. Give them some teeth and see execution reap the rewards, oh, and you won’t look daft in having half empty shelves!


Retail Remedy provides bespoke, results-focused consultancy for retailers globally, from established brands to high-growth start-ups. Get in touch.