The Dawning of Content and Commerce
With the first federal interest-rate hike recently enacted in nearly a decade, oil prices near historic lows and continued profit-margin pressures looming large, 2016 is primed to present another wild ride for food retailers and marketers.
To help make sense of some of the most important consumer and industry twists and turns poised to play out in the months ahead, I turned to Karen Fichuk, president, North America for Schaumburg, Ill.-based Nielsen, for a glimpse of what’s swirling in her sagacious crystal ball.
“What’s really caught my eye of late is the convergence of content and commerce. Content providers are dabbling as commerce suppliers,” says Fichuk, pointing to Pinterest and Facebook, which are now explicitly selling to consumers. “Retailers are creating their own content as well” – as well they should, she affirms, noting as stellar examples Walgreens’ wellness newsletter, and online videos from The Kroger Co.’s super-productive Harris Teeter division that help folks better grasp topics like everyday cooking and product labels.
Unconventional Opportunities
“In 2016, we’re going to see more and more of this line-blurring,” affirms Fichuk, “and there certainly is an opportunity for food retailers to extend the in-store experience online as well,” which begs a yin/yang question from me about what she foresees as the greatest yet-to-be-seized opportunities and potentially most taxing hurdles for retailers as the year unfolds.
“I think one of the biggest opportunities … is certainly around connected commerce,” she replies. “Other industries are significantly further ahead,” as a result of indigenous barriers to consumers’ adoption of online grocery shopping. But let there be no doubt, maintains Fichuk: “As Millennials enter new life stages and continue to become heads of households, connected commerce will take off in this space as well.”
Accordingly, the onus will be squarely on traditional retailers “to find new ways to adapt and own it.”
Asked to elaborate on her view of “owning it,” Fichuk begins by citing unconventional players jockeying to disrupt this space. “Who would have thought that Uber would be in the grocery delivery business? But they’re there! Retailers have to evolve; they have to think about where they should be making big bets,” she notes. “They have real advantages,” foremost of which is their native status as fundamental owners of the shopping experience. “They own the consumer data and consumers trust them,” Fichuk continues. “The next step is harnessing these advantages to their benefit.”
Entertainment and Personalization
While the majority of food retailers today are in varying stages of adapting to the new world order and well aware that the present pace of change is unprecedented, I asked Fichuk to briefly expand on her personal philosophy of the changing role of food retailers today.
“It’s indeed a whole new world for retailers today,” she agrees. “They play a bigger role than just supplying ingredients for in-home cooking; they are now the restaurants and the entertainment for consumers. I think one of the biggest changes in the role of food retailers today is with the shopping experience. It’s no longer enough to just purchase ingredients in the store to take home and concoct whatever” comes to mind. To the contrary, she notes, “Retailers are now expected to play the role of a restaurant offering high-quality prepared meals, along with imparting a little entertainment at the same time.”
Thinking back on “when my kids were little,” Fichuk says her yesteryear grocery store experiences “were far less engaging and completely different. Now retailers can win by making it an entertaining outing for the whole family.”
Which players does she admire from a retail experience standpoint? Fichuk tips her hat to Nike, explaining that she “loves what they’re doing. If you go into a Nike store, they are masterfully combining two trends: entertainment and personalization. Across media, advertising or shopping, digital has unleashed the power of personalization. Nike has taken it to shoes, allowing customers to personalize them with color and style,” as well as handwritten touches by their owners. Consequently, Fichuk believes food retailers are the next logical candidates “to hop on the personalization bandwagon.”
I’ll chime in with a bit of supplemental parting advice: If you can’t hop, get a ladder. Whatever it takes – keep moving forward.