Australia’s retail sector is facing a number of challenges, driven by advances in technology which have led to an explosion of consumer touchpoints in the market space, according to IRI.
In IRI’s Retail Outlook for 2019 and Beyond, ‘Staying One Step Ahead’, Alistair Leathwood, IRI’s Chief Commercial Officer, Asia Pacific explains the issues contributing to the challenges facing the FMCG sector.
“Australian supermarkets must invest more heavily in data and technologies to better understand and meet the expectations of today’s hyperconnected consumer”, Leathwood said.
“Consumers across the world today are inundated by choice and have easy access to a wealth of information. This puts unprecedented power in their hands and brands are scrambling to meet their changing expectations.”
“The insights that brands can glean thanks to digital technologies provide the opportunity to experiment with new products, new retail environments and whole new business models.”
The Outlook also details that with consumers browsing less than they used to this means they are now more focused and less loyal.
With the popularity of click and collect increasing massively, this can mean a reduction in basket size because consumers are able to pick up their goods without wandering the aisles. Ninety per cent of shoppers make lists before shopping, which makes the competition for influence on the path to purchase greater than ever.
IRI said that price, promotional mechanics and clever marketing is more influential than brand loyalty in FMCG purchases. This is opening up 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, and those who don’t will be quickly dominated by those who get it right. It is no longer a case of the big eating the small, it is now a matter of the fast eating the slow.”
In terms of new technology trends, Leathwood added: “We know FMCG suppliers and retailers analyse data, but many struggle to create value from it. With the growth of data from the Internet of Things (IoT), the job to decipher it becomes ever-more complicated.
“Analysing disparate data from a variety of sources is a complex and overwhelming task for manufacturers and retailers. It is crucial they keep up to speed with new technology trends with a fresh mindset.”
“If they master the data they will be able to achieve highly targeted and effective marketing strategies and a deep understanding of their customers.”