BC Dairy Farmers

Five Big Retail Trends—Is the dairy industry ready?

Jeff Doucette of Field Agent led a thought-provoking session at the BC Dairy Industry Conference in Vancouver, November 2013. He outlined five major trends and asked if the dairy industry is positioned to take advantage of these trends.

1. Retailers are getting bigger and going global

Globally, the number one retailer is Walmart. Carrefour (based in France), Tesco (based in the UK), Metro Group (based in Germany) and Kroger (US) are the next big players. Costco takes the number six position. 

Walmart is way out in front. In fact, it is three times the size of Carrefour in spite of only being in 28 countries.

Though Canadian retailers don’t make the top ten list, we see that the consolidation trend is going on here too. Among food retailers, we have recently seen the merger between Sobey’s and Safeway and also between Loblaw’s and Shoppers Drug Mart. The latter gives shoppers 1100 touch points with one supply chain.

Canada is not the most innovative market and could probably learn lots from some of the European retailers.

2. Building Great Brands

Retailers are shifting from being in the distribution business to becoming great brands. This is done through a variety of strategies. 

  • Developing private labels
    Tesco is a very interesting example of this, with several private label brands ranging the gamut from good ‘value’ to ‘organic’ to ‘finest’. 
  • Variety of store formats
    warehouse style vs. full-serve retailer
  • added services
    a chance to buy insurance or telecom services along with groceries
  • corporate citizenship
    tying brand in to local sourcing, reducing carbon footprint or how employees are treated.

The little blue cow on private label brands is a good example of adding value to help a retailer build a great brand.

3. Understanding the individual shopper

Tesco is the leader here. They launched their loyalty card in 1995. The use of loyalty cards is a big data project, a way to understand each shopper.

There is no such thing as the average shopper. What kind of coupons are you getting? Does your supermarket know your daughter is pregnant before you? The flyer isn’t so important any more. What messages are you getting? Smart retailers do things like offering you an extra 500 points on the bread or shampoo you buy just to get you in their store.

4. Being consious of the footprint

Sustainability is a critical issue facing both retailers and shoppers. Walmart drove the change to concentrated laundry detergent. Sobey’s is taking the lead on sustainability in Canada. Cost is the major driver of these initiatives. What is the dairy industry doing about communicating environmental improvements to retailers?

5. Mobile retailing and e-commerce

There are some great ways retailers are taking advantage of e-commerce around the world. For example, in Korea, you can virtually shop in the subway by scanning QR codes for products on virtual grocery shelves. A delivery will await you at your home. Or how about ordering on line and then picking up your groceries at a drive-through, as is done by Auchon Drive in France?

Amazon sells just about everything except dairy products. How are they going to figure out fresh on line? Jeff Doucette challenged us to figure out how dairy will fit in with e-commerce. We need to be there so consumption doesn’t decline.

About BC Dairy

BC Dairy is a not-for-profit organization representing BC’s dairy farmers.