Food retail is a very interesting business, constantly evolving and affecting everyone’s daily life.
At Kazidomi, we take a great deal of time to observe the trends in the industry and wanted to share what we believe are the core changes taking place at the moment:
Consciousness of impact
There is an incontestable trend towards more conscious food purchase behaviour, on all sides, i.e., health, environment and social impact. The organic food industry is booming, and many specific trends are also accelerating (for instance, vegan, paleo, gluten-free, etc.). This is very much fostered by the broader access to information via internet and the many movements that are trying to help customers understand.). Some stores have also been praised for offering children fruits for free at the entrance of the stores. Another good example is Delhaize re-branding its products for children with attractive names.
Experience at the core
Customers are looking for more than purchase, there is an evolving need for experience. There are many in-store examples (sushi corner, super market bakeries or coffee shops, tasting classes, wine-food association advice, etc). Of course, the online experience is being challenged here, and this explains the need for greater personalization online and great customer supports (e.g., constant online chat, tailored newsletters, etc.)
Blurring split between brick and mortar and online
Many traditional retailers have tried to jump in the online market, but many have shown disappointing results and none seem to have found the best approach. Interestingly, the opposite trend also seems to apply as online stores also start trying to build traditional stores. Some of them do it mainly for branding purposes and develop flagship stores, while others are trying to give customers easier access to their orders for pickup. Long story short, it seems there is a conversion of both format towards a hybrid online-offline store that would combine best characteristics of the two. At this stage, all players still let their model evolve in order to find the perfect combination but none of them seem to have cracked it yet.
Platforms are everywhere, it can be Amazon, it can be Deliveroo, or Uber eats or even Groupon and all of them continue to impact the food retail industry every single day. There is an important dilemma for every food retailer at this stage between trying to keep his or her own brand platform (e.g., a simple website) or leveraging these platforms for greater brand awareness and benefiting of the services their offer (e.g., delivery taken care of, etc.). On the other hand, they also need to consider the impact it can have on the business, of course financially as they will take a cut on the sales but also from the branding perspective and even from the customer relationship point of view. Indeed, using such platforms also imply to give away part of the relationship with the customers and abandon the privileges coming with it (e.g., customer access, data, etc.).
Evolving customer needs
People just don’t cook anymore as they used to and this represents a huge threat for traditional retailers as much as it represents an opportunity for the ones that will be able to capture the food services trends. Millenials are used to ordering online, and eat more take-away than their elderlies. Food-delivery platforms also accelerate this via increase convenience. This is thus not a surprise that the food convenience market is sky-rocketing at the moment and it is expected to continue doing so. For food retailers, this can be an opportunity but will also represent a challenge as this makes the value chain more complex (i.e., offering ready-males is not easy, and is full of constraints).