Monday, April 22, 2024

Supermarkets must invest ‘heavily’ in technology, says IRI

Big-data firm IRI says supermarkets must invest “heavily” in technology to keep up with rapidly evolving consumer trends.

Chief Commercial Officer, Asia Pacific, IRI, Alistair Leathwood, has outlined the challenges facing the retail sector in IRI’s ‘Retail Outlook for 2019 and Beyond: Staying One Step Ahead’.

Investing in data and technology

Mr Leathwood says evolving technology presents great challenges to the FMCG sector, but opportunities too.

“Consumers across the world today are inundated by choice and have easy access to a wealth of information,” he said.

“Australian supermarkets must invest more heavily in data and technologies to better understand and meet the expectations of hyper-connected consumers.

“The insights brands can glean from digital technologies provide the opportunity to experiment with new products, environments and business models.”

Young driving online shopping

Online still comprises a relatively small share of sales. But IRI estimates that its share will grow 10-15 times faster than total channel growth rates.

“Millennials are, perhaps unsurprisingly, the biggest adopters of e- and m-commerce,” Mr Leathwood said. “An understanding of their buying habits is crucial.

“Retail marketers also need to factor in generation Z, the generation behind them. They’re constantly online and will continue to be so.”

Convenience is crucial for the mobile younger generations as well as “time-poor mid-lifers”, says IRI. It cites data showing an emerging trend of “little-and-often” shopping patterns – in other words, an increase in store visits, but with smaller spends per basket.

Consumers becoming less loyal

Shoppers browse less than they used to, says IRI. Price, promotional mechanics and clever marketing are more influential than brand loyalty in FMCG purchases. This trend is creating opportunities for smaller, more contemporary suppliers and brands, and more exclusive products.

“Grassroots marketing that brings a relatable, real-life authentic brand story to life has never been more crucial,” Leathwood said.

“Brands need to reflect consumers’ wants and needs. It’s no longer a case of the big eating the small. It’s now a matter of the fast eating the slow.”

New technology trends

Mr Leathwood says that although many retailers recognise the importance of data, they’re still not sure what to do with it.

“We know FMCG suppliers and retailers analyse data, but many struggle to create value from it,” he said.

“With the growth of data from the internet of things, the job to decipher it becomes ever more complicated.

“It’s crucial they keep up to speed with new technology trends with a fresh mindset. If they master the data, they’ll be able to achieve highly targeted and effective marketing strategies – and a deep understanding of their customers.”

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