Five ways to reinvent the supermarket

Against a backdrop of greater channel innovation, with developments in areas such as ecommerce and convenience already underway, we are likely to see more opportunities for Canadian shoppers to shift away from supermarkets to alternative formats. The growth of discount stores is a great example of this.

However, in countries where these new channels are much more mature, the pace of innovation in supermarkets is accelerating, with retailers focusing more than ever on improving the quality of the shopping experience.

I’ve identified five ways in which supermarket operators are fighting back, highlighting the techniques which could make their mark here in Canada.

Defining value in a new way: retailers are developing new value-focused larger formats that are resonating with shoppers.

Examples include Pak n Save in New Zealand, Walmart’s Bodega Aurrera in Mexico and Carrefour’s Supeco in Spain. Expect to see further developments of these types of differentiated store formats.

Maximizing shoppers’ time in store: technology is being used to help shoppers find the products and promotions they want. Woolworths in Australia has used digital solutions to help shoppers quickly locate products, while Carrefour is rolling out an in-store app in Shanghai.

The technology is also enabling retailers to engage with shoppers in a more personalized way, and as well as helping them, through smartphone technology, move seamlessly from online to in-store.

Providing an improved shopping experience for families: in larger stores especially, space is being used to create a more family-friendly atmosphere and experience.

Sweden’s Coop Sverige has used space inventively to create a family-friendly environment with small trolleys for children and a play area to make the shopping experience more relaxed for parents. At the in-store bakery, steps enable children to see what is happening and talk to the bakers, while products aimed at children are signposted using pink footprints.

Using the power of large stores to become category specialists: over recent years, fresh food categories have taken the bulk of retailers’ investment dollar.

However, we’re now seeing a reversal of this with more space allocated to product categories that have previously been squeezed.

Carrefour’s hypermarket remodelling has opened up more space for frozen foods, enabling the retailer to expand the range and provide shoppers with a broader assortment. Health and beauty is another category which is gaining an increased level of focus as retailers build category authority, helping to increase dwell time and shopper spend.

Giving stores destination status: many stores are being re-positioned to create clear points of difference versus their competitors. Retailers such as Middle East based Lulu, Tesco in the U.K. and Spar Ireland are blurring the boundaries between retail and foodservice, using exclusive brands and in-store food preparation to make their stores the one for shoppers to visit.

The key to the success of these strategies is that the retailers understand their shoppers. Beyond using traditional loyalty programs, they have sought out new ways to reward them for their time and spend, and hopefully increase their chances of returning to the stores.

As competition in the market and between various channels intensifies in Canada, looking at how retailers have reinvented their stores elsewhere could help unlock new ideas and innovations to drive traffic and loyalty for the long-term.