Retailer engagement with consumers and suppliers, along with the growth of discount were the main topics at the Food and Consumer Products of Canada conference on Tuesday at the Toronto Congress Centre.
The conference, "Canadian Retail Landscape & Turning Insights into Action," started with Nielsen's Carman Allison, director of consumer insights, who provided a snapshot of the retail landscape.
Allison said shoppers are still focused on value and saving for the fourth quarter and will continue to be into 2013. He said the No. 1 concern among Canadian consumers is debt, followed by the economy, with 51 per cent of those surveyed by Nielsen saying rising food prices will have a major impact on their household spending.
"Fifty-nine per cent of Canadians are trying to reduce household expenses," he said, adding that 48 per cent said they'll spend less on groceries over last year.
Allison said growth opportunities will all come from value propositions: 35 per cent of sales are sold with a price cut; while 48 per cent of unit sales are sold with a price cut. "Couponing activities have increased 6 per cent," said Allison.
Leading the charge among growing channels are discounters, projected to grow 40.6 per cent for the year. Currently, the dollar share of discount for grocery based on categories is 39.9 per cent, up 1.2 per cent from a year ago.
"We’re projecting year end to be 40.6 per cent and the five-year outlook to be 50.9 per cent (in discount)," he said.
Allison said along with value-focused consumers, the other growth opportunity lies in higher income homes – ($70K+) – which now account for almost half of consumer packaged goods sales. These households spend 20 per cent more on average, he said, and there is opportunity for premium brands.
Next was Dawn Abankwah of Aimia who spoke about strategies to engage retail consumers.
She said today's loyalty programs must engage and reward consumers throughout the entire purchase path. She pointed to research that showed 58 per cent of consumers are willing to leave a store and go elsewhere if they find a cheaper price (using their phones to research) at another store.
Loyalty programs aren't just about a transactional exchange anymore, she said. Instead, they're about learning and understanding your customers and their needs and keeping them engaged.
"When data is properly mined and analyzed, it cultivates exceptional strategy," she said.
Paul Cussons of the Advantage Group then provided insights from recent benchmark studies that outline the shifts that have taken place with retailers.
Mirroring the key theme from the 2012 Thought Leadership Conference on Monday, Cussons said collaboration was a major priority among those surveyed, who said that maintaining good relations between suppliers and manufacturers creates a "win-win for both parties."
The conference concluded with an overview of discount retailing in Canada by Jeff Doucette of Field Agent Canada.
Dollarama was noted for its rapid expansion and success here. The average spend is $14.73 a week, or ($188 per year).
As seen in the U.S., Doucette said to expect dollar stores to expand here with fresh and frozen sections.
What can vendors do? He said they need to look at category management, unique SKUs for the channel as well as shelf-ready packaging.