FDBusiness.com

In a brand-new report, international grocery research organisation IGD and The Consumer Goods Forum (CGF) reveal the 10 areas grocery retailers must focus on to ensure physical stores remain relevant for shoppers in an increasingly digital age. Prepared by IGD for CGF’s E2E Value Chain Learning Series, ‘The Evolution of the Physical Store’ maps out a vision for the future of the physical grocery store, including the 10 critical considerations for retailers to ensure they are equipped to meet the demands of that future. Highlighting many areas of IGD’s research, the free-to-download report also examines the forces informing and influencing store evolution, reveals global case studies of best practice and offers separate checklists for retailers and manufacturers to ensure they make the most of the advice in the report.

Joanne Denney-Finch, Chief Executive of IGD, says: “The digital world is advancing at lightning speed and the online shopping experience will just keep improving, which means it could be challenging for physical stores to remain relevant for shoppers in the future. However, we believe there will always be a place for bricks and mortar stores in grocery retailing, as physical stores will always be best placed to deliver instant gratification, impulse purchases and customer service. So, we expect the store of the future to merge the physical and digital worlds, to create a much more absorbing experience featuring fresh food, new products, unique events and more ways to taste, learn and discover. Retailers and manufacturers must therefore work collaboratively, to prepare for the very different future taking shape around us.”

Ruediger Hagedorn, Senior Manager, Collaborative Value Chain Initiatives & Projects at The Consumer Goods Forum, says: “The consumer goods industry has been presented with enormous opportunities in recent years. It is important companies continue to be forward thinking and ready to evolve if they want to meet changing consumer demands and overcome increasing supply chain complexities. The latest addition to our End-to-End Learning Series will help companies understand what will shape grocery food and retail in the future and how to respond. Supported by IGD’s research, the Evolution of the Physical Store provides a concrete checklist on what companies should consider today to better prepare for tomorrow”.

Jon Wright, EMEA Region Manager at IGD and the author of the report, explains: “The physical store of the future must rapidly evolve and innovate to remain relevant, and IGD has identified the top 10 areas retailers need to consider as this evolution gets underway. Suppliers also need to consider how these steps will affect them, how they can benefit from stores’ potential and how to support retailers during this period of change.”

IGD’s top 10 areas for retailers and suppliers to consider as they prepare for the store of the future are:

1. Understand shoppers and their missions – best-in-class retailers increasingly recognise and cater for shoppers’ different missions, but there is still more to be done. In our vision of the future, distinctions between formats will become less relevant and retailers and suppliers will engage and interact with shoppers in a much more individual way
2. Better data will enable better service – enhanced use of data and analytics will help retailers make more informed decisions around their ranges. Personalisation will also be a major part of the store of the future
3. Be ready to enable flexible store designs – robotics and technology will free up more space in-store that can be used to excite shoppers and drive footfall, with more focus on fresh food, mission-focused fixtures and convenient meal options
4. Invest in staff – one of the main benefits of using more robotics and technology in-store will be to free up staff to focus on value-added services. As technology removes some of the human elements of in-store services, it will be essential for companies to have a friendly face to bring their brands to life
5. Reconsider stores’ ranges – a key element in creating an engaging store will be offering what e-commerce cannot. Shoppers’ more regular purchases will have increasingly shifted online, so stores’ ranges will need to be unique, adaptable and relevant
6. Remove friction from the whole journey – retailers will need to understand where and why there is friction in shoppers’ journeys around their stores. A speedy experience at the checkout is very important to shoppers, so removing checkouts altogether could be a big gain, also freeing up space for new features and fixtures and giving staff the opportunity to spend more time helping and inspiring shoppers
7. Build and support brands – for retailers and suppliers preparing for the store of the future, investing in brands will be important. Brand integrity is and will continue to be crucial and manufacturers will need to continue to invest to find creative ways to build and support their brand
8. Involve the supply chain team earlier and more often – more pressure will be placed on retailers’ supply chains to meet shoppers’ demands. Retailers will need greater understanding of demand planning and the ability to react quickly, plus greater collaboration across the chain
9. New stores will require different ways to measure success – retailers will need to come up with new ways of measuring success for the store of the future and demands created by shoppers
10. Get buy-in from the top and from partners in the chain – creating the store of the future will require investment and long-term planning. Retailers will need to establish and maintain a company-wide view of how the store will develop for their brands, putting the shopper at the heart of this evolution. Senior teams will need to commit to drive these wide-ranging, long-term changes

Jon Wright adds: “Already we are seeing stores experiment in many ways to enhance the experience for shoppers, concentrating on visual appeal, product freshness, provenance and health – but there’s more to be done. Our vision of the store of the future will require investment from retailers and their suppliers, which is increasingly challenging in today’s competitive retail environment. Another key challenge will be in picking through the noise of what shoppers say they want and focusing initially on those elements that they’re actually ready to adopt.

“Clearly, there are risks in building the foundations for the store of the future, yet given how firmly we believe the physical store has a role to play in grocery, the risks of not investing could be even higher. Retailers and suppliers must work collaboratively to prepare and build for the future – now.”

The report is available to download free of charge here: