What does a value chain expert know about the future for the independent grocer? Not much when it comes to the front end other than service is key, my local grocer in London knew me by name, suggested new products for me to try, he was always smiling and guess what it worked.
I wonder in and out of independents on a regular basis, it always surprises me, whether it is pritt-stick or some obscure seasoning for cooking, two stores later there it is and normally at a regular price, when I was willing to pay ten times its price to avoid a delay or trip to a bigger retailer. I often wonder therefore how much analytics gets done on what sells and what to stock.
The smart things an independent can do is change SKU’s quickly and be far more responsive than a retailer, range reviews are not an annual event, there is no significant risk to delisting SKU’s that are not achieving expected sales. On the flip of that they need to be leading the charge on innovation, a product can be put on the shelf and trialled again with little risk, the independents should use the mantra win big or lose quick.
Supermarkets carry multiple brands, take milk where there are likely 20-30 variants of what is essentially milk from the same cow on the shelf with a different label, each carrying a risk of going out of life. Simplify the brand portfolio to minimise waste and maximise sales per unit could be how the independent can compete.
In addition to that independents should look at the supply chain they operate in and collaborate where it makes sense, big suppliers have no interest in working with just one independent and in term that independent has little interesting being part of a bigger group, but perhaps they could still collaborate with other local stores to minimise.
The independent needs to be a turbo charged supermarket, using its agile position to be all the things a retailer cannot, one of these attributes might be to be a chameleon, meaning perhaps collaboration could stretch a little further and the independents could partner with the big retailers to trial products for them and even stock their private label product, with the retailers own brand growing in trust, to compete the independent sources a cheap product international, but sales do not follow. It might be smart for both the retailers and independents to explore this relationship. Woolworths Macro brand would surely an ideal brand for the local wholesome grocer to be stocking. In Hong Kong, packnshop stock Waitrose essential products which retail at a 375% premium to the UK price.
By Paul Eastwood, CEO, Pollen Consulting Group and first published in Retail World – https://www.retailworldmagazine.com.au/emag/2017/RW-JUL-2017/html5forpc.html?page=28