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March 29, 2015

Unilateral Pricing Policy Sparks Debate on Future of Optical Goods Store Retailing

Chloe WuAnalyst Insight by Chloe Wu - Personal Accessories and Eyewear Analyst

In 2014, major contact lens manufacturers announced the implementation of retail price floors for leading contact lens brands, including popular brands such as Acuvue 1-Day Moist, Acuvue Oasys, Dailies AquaComfort Plus, Dailies Total 1 and Ultra. The mandate is widely criticised by consumers as a move by contact lens manufacturers to protect sales margins.

Issues of consumer health and choice closely intertwined

The more vocal eye care practitioners (ECPs) and related trade associations have voiced their support for the UPP. Contact lens online retailers, on the other hand, are doing whatever they can to obtain an injunction. Here’s the long and short of the many arguments made for and against the UPP – ECPs see the UPP as a preventative measure against showrooming, arguing that shopping around (particularly on the internet) undermines consumer health as patients would bypass regular eye checks and optical fittings. On the other hand, online retailers fear losing their cost advantage, thus protesting against what they see as a restriction of consumers’ choice. Consumers have voiced their dismay, many of whom are less likely to replace their lenses as frequently as before due to price increases, which compromises the safety of contact lens use.

Continue reading "Unilateral Pricing Policy Sparks Debate on Future of Optical Goods Store Retailing" »

March 27, 2015

Why the Changing US Grocery Retail Market Underpins the Kraft and Heinz Merger

Tim BarrettAnalyst Insight by Tim Barrett - Retailing Analyst

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On March 25th, 2015 it was announced that Kraft Foods and HJ Heinz would merge, ultimately forming a packaged food power house called the Kraft Heinz Co.  This combined company would have a 5.4% value share of the entire US packaged foods market, making it the number one company in the space with nearly US$20 billion in sales. This merger is primarily a response to a changing grocery landscape which prioritizes cost efficiencies, given the emphasis on low prices for the consumer.

Wal-Mart becomes king of grocery retailing

Within grocery retail, Wal-Mart maintains disproportionate power as the nation’s dominant grocery retailer with around 20% market share in 2014. Its second largest competitor, Kroger, only has 8%. Wal-Mart has managed to tighten its grip on the grocery market over the past ten years, growing sales from US$45.3 billion in 2004 to US$156.5 billion in 2014.  Wal-Mart was able to increase its grocery sales by 245% thanks to its core strategy:  lower prices. 

Continue reading "Why the Changing US Grocery Retail Market Underpins the Kraft and Heinz Merger" »

March 13, 2015

Hudl Tablet a Bright Spot for Tesco's Future

Tesco will be addressing their hypermarket woes by cutting about 100 stores and 10,000 jobs and cutting product offerings. One bright spot for Tesco's future, however, is the Hudl tablet, which accounts for a 3% share in the first quarter of its release. This tablet functions primary for Tesco as a delivery system for coupons, financial services and other loyalty initiatives.  Watch the full video for complete insights.

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March 11, 2015

Three Steps for Creating a Successful Route to Market Analysis

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Sam-RienstraBy Sam Rienstra - Senior Account Manager

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No matter how great your product is, choosing the right retail channel and the best retailer for it can be a key determinant of success when entering a new market.  While there are dozens, even hundreds, of factors to consider when entering a new market, this post will focus on three key areas to consider once you have selected a market to enter:

  1. Evaluate the distribution landscape for your product
  2. Identify the strongest distribution channels for your business
  3. Prioritize potential retail partners

 

Step One: Evaluate the distribution landscape

No matter the product you want to sell, understanding different distribution options in your new market is an essential first step.  Think beyond which retail channels are the biggest or fastest growing – it’s more important to understand where consumers are going to buy your product. For example, if you are going to sell dishwashing detergent in Brazil, it is exciting to see internet retailing in Brazil has grown at an 18.9% CAGR over the past five years. It becomes less interesting when you learn 99.8% of all dishwashing products purchased in Brazil are store-based purchases. The other 0.2%, in case you’re wondering, is through direct sales.

Continue reading "Three Steps for Creating a Successful Route to Market Analysis " »

March 10, 2015

The Impact of Country Specific Demographic Factors on Consumer Behaviour in Africa

Ronald-MapiyeAnalyst Insight by Ronald Tinashe Mapiye - Research Analyst

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Customers are generally influenced by a series of issues when making purchasing decisions. This is true across the globe, and as such Sub-Saharan Africa consumer is no different. However, in Sub-Saharan Africa, one finds that some factors that influence consumers’ purchase decisions are unique to this region.

Demographics play an integral role in the decision making of the Sub-Saharan Africa consumer. In a market like Nigeria, there is little racial diversity as the black race makes up the majority of the population. This makes it relatively easy for food manufacturers to target consumers as a common food culture and consumption pattern can be easily identified. There are less ethical issues to address where there isn’t much diversity, although you find that there are also limited opportunities to diversify in a country that is not multi-racial. South Africa, on the other hand, has much more opportunities for retailers to diversify as the country has multiple races. Since people are exposed to many cultures, they are more open minded to trying out different foods and therefore it makes it relatively challenging to enter markets such as food retailing and apparel, as a clear understanding and knowledge of the market is needed.

Continue reading "The Impact of Country Specific Demographic Factors on Consumer Behaviour in Africa" »

March 6, 2015

Does Modern Grocery Expansion Lead to Industry Consolidation?

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Modern grocery retailers, such as supermarkets and hypermarkets, typically account for 70-90% of all grocery retail sales in developed countries. In this article, we have attempted to test whether there is a relationship between expansion of modern grocery chains and consolidation of industry sales among top companies in the industry, or if the opposite is true, and large FMCG companies in fact perform better in an environment where the retail channel is more fragmented.

Figure 1: Modern Grocery Retail and Country’s Development Level

Grocery-CAMI-1

Source: Euromonitor International (Retailing)

Continue reading "Does Modern Grocery Expansion Lead to Industry Consolidation?" »

March 4, 2015

The Rising Power of Female Consumers

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The global female population totalled an estimated 3.6 billion in 2014 and is expected to reach 4.2 billion by 2030. Average disposable income amongst women is the highest it's ever been, and women are living longer than men.

What are you doing to reach this growing market?

Recording
View now to learn:

  • The size and distribution of the female consumer market
  • Literacy and education rates
  • Labour participation
  • Purchasing power

 

Continue reading "The Rising Power of Female Consumers" »

March 3, 2015

The Colour of a Dress and Milan's Catwalks Illuminate Online/Real World Convergence

Daphne KasrielAnalyst Insight by Daphne Kasriel-Alexander - Consumer Trends Consultant

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Who would have thought that a posting on the colour of a dress worn to a wedding in Scotland, asking whether it was blue and black or white and gold, would spread like wildfire over social networks, engaging close to 30 million people within a matter of days. It polarized consumers and led to extended discussions on perception which broke traffic records on Buzzfeed and Tumblr and got twitterers tweeting with relish. Real world sales of the dress have soared.  Buoyed by simplicity and universality, this ‘debate’  “definitely felt like a special thing” said Buzzfeed’s editor in chief, Ben Smith. “It sort of erased the line between web culture and real culture”. Milan's Autumn/Winter 2015 catwalks too have been featuring symbols saluting the importance of things digital with fashion businesses switching their haute couture launches to the virtual world.

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February 28, 2015

What the Loss of the Costco Co-branding Partnership Means for American Express

Kendrick SandsAnalyst Insight by Kendrick Sands - Senior Consumer Finance Analyst

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American Express recently reported that its Costco exclusivity agreement that had been in place for 16 years would come to an end in 2016. Both Costco and American Express cited an impasse on terms that would make it “economical” as the justification for the termination. A similar agreement was cancelled in Canada last year between the two companies and could provide some insight into what the future relationships between Costco and American Express will look like going forward in the US. Co-branding presents a sizable opportunity for card networks and issuers beyond immediate revenue from payment volume. The loans and access to a particular consumer segment can provide an initial contact point for additional financial service cross-selling. However, in an increasingly competitive environment for co-branding partnerships among networks, the share of profit created from the programs may continue to shift toward retailers.

Continue reading "What the Loss of the Costco Co-branding Partnership Means for American Express" »

February 21, 2015

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Recent Posts

Unilateral Pricing Policy Sparks Debate on Future of Optical Goods Store Retailing

Why the Changing US Grocery Retail Market Underpins the Kraft and Heinz Merger

Hudl Tablet a Bright Spot for Tesco's Future

Three Steps for Creating a Successful Route to Market Analysis

The Impact of Country Specific Demographic Factors on Consumer Behaviour in Africa

Does Modern Grocery Expansion Lead to Industry Consolidation?

The Rising Power of Female Consumers

The Colour of a Dress and Milan's Catwalks Illuminate Online/Real World Convergence

What the Loss of the Costco Co-branding Partnership Means for American Express

Trendy kształtujące spożywczy handel detaliczny w Polsce