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10 headlines from the '22 Global Restaurant Leadership Conference

Barry Thomas, Senior Thought Leader
2 December 2022

Top restaurant brands, suppliers, and industry leaders gathered in Dubai last month for the 2022 Global Restaurant Leadership Conference to share knowledge and network with this high-value community.

The three-day conference is considered the top global learning event for the entire restaurant industry, and restaurants and suppliers from all over the world attend to help inform their growth plans.

Here are our 10 headlines from this year’s event.

1. International markets lead and will continue to lead industry growth.

Sales for US brands outside the US rose 24% in 2021, according to Technomic, the top food service data company. Yet, US restaurant sales in 2021 grew at a slower 16%. For 2022, US restaurant sales growth is expected to be approximately 11%, which is significantly lower than all international regions except for Asia-Pacific. Brands like KFC, Burger King, and Domino’s are now bigger internationally than they are in the US. For US-based food service firms, the high ground for growth is abroad.

2. Restaurants are diverging into either experience- or convenience-centric brands.

Guests increasingly prefer either the full sit-down dining experience or frictionless and fast meals enabled by technology. Guests looking to dine in want the whole package: quality meals, eye-catching environments, friendly service, and a broad selection of healthy options. But other restaurants are increasingly customizing their brands in response to the rise in delivery and convenience occasions. For these restaurants, their primary purpose is as a distribution node for off-premises occasions.

3. Winning restaurants are investing ahead of the curve in digital and technology solutions.

Food service companies like Inspire shared how they have been investing significantly in digital and technology and leveraging new solutions across their brands with superior results. Moreover, we learned how international markets often provide the most advanced technology learnings. More restaurants are gaining a competitive advantage by taking what they learn from advanced digital markets to other markets.

4. Effective loyalty marketing provides restaurant brands with a material competitive advantage.

Throughout the week, various restaurant brands and suppliers shared how loyalty marketing is providing potent results. We often hear how restaurant loyalty members spend three times more than the average guest. Brands with strong loyalty marketing have a sustainable advantage over other chains when it comes to customer lifetime value, profitability, traffic, and so much more. Consumers responding to loyalty marketing and personalized offers drive more sales, repeat visits, and brand love.

5. TikTok, WhatsApp, and other social players are reinventing restaurant marketing.

Nearly every marketing presentation or conversation centered partly on how consumers are steadily focused on these highly influential social media and connection platforms. As such, most restaurant brands are pivoting more investments and building more capabilities with these players. At the same time, restaurant brands are ramping up the marketing behind their own brand sites, given the value of the data capture and the direct marketing relationship opportunities.

6. The restaurant industry must become even more mobile-centric in everything it does.

In modern trade markets like North America, adults spend an average of five hours a day or more on their mobile phones. Multiple restaurant leaders said brands must spend more time learning to be mobile-centric and building the restaurant experience on mobile phones and apps like TikTok.

7. Salary and benefits for front-line employees need a major rethink.

Many restaurant brands believe they need a new compensation model for workers, especially with tighter labor markets and growing unionization efforts. Restaurants compete more often now with delivery aggregators, retailers, and other industries that are rethinking employee compensation. Moreover, some restaurant employees now function as micro-influencers while at work to help boost engagement and restaurant traffic. However, the legacy restaurant salary is not compensating employees for this new value they are creating. Expect food service brand winners to innovate front-line crew benefits, and watch for other brands to follow suit.

8. Suppliers are innovating rapidly to better support restaurant customers.
Best-in-class suppliers are integrating real-time customer data into their forecast models while becoming more flexible with delivery needs. Suppliers that haven’t kept pace with supply chain demands have forced restaurants to adopt a more diverse set of new suppliers. That’s drawn more business to local suppliers and helped restaurants stay in stock.

9. Health and wellness and indulgence remain essential to guests yet vary by market.

While we learned that guests in the UAE region often favor more indulgent foods, guests in markets like North America and Europe demand healthier menus. More nutritious menus, including the benefits of local food that is viewed as healthier and more sustainable, was a key theme throughout the week. Leaders also discussed how they are adopting more plant-based menu items for the growing number of flexitarians who can veto going to their restaurant without this option. Most restaurant brands said it was important to have more healthy menu options along with the tried-and-true indulgent signature dishes that guests expect.

10. Despite multiple challenges expected in 2023, all restaurant segments are projected to grow.

Technomic’s estimates for the first half of 2023 seemed optimistic, with growth forecasted across all segments:
  • Cafes: 18% 
  • Full-service restaurants: 16%
  • Retail food service: 9%
  • Limited-service restaurants: 8%
  • Street food vendors: 3%
  • Work cafeterias: 3%

The total global food service industry is forecasted to grow 9.3% in 2023 (or 4% subtracting for inflation). 
Overall, the 2023 context for restaurants will be turbulent and nonlinear. The most significant barriers for the industry will be labor; inflation; supply chain; and a more unstable global macro context with the ongoing pandemic, war in Ukraine, and other conditions.
Given this landscape with more disruptions looming, restaurant operators must make bigger, bolder bets on growth. Additionally, the idea of power partnerships, which was this year’s conference theme, seems spot on for what the industry needs more of in 2023. A critical recipe for restaurant growth next year will be stronger and strategic power partnerships that drive more collaboration, innovation, and profitable growth for restaurants, franchisees, and suppliers.

Want to keep the conversation going? Get in touch.

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Generative AI: The next powerful force in the future of commerce

Find out how generative AI could usher in a new era for communication and creative development for brands, retailers, and restaurants.

Barry Thomas, Senior Thought Leader
17 November 2022

Generative AI is an emerging technology that has the potential to change the way we think about and use computer systems. Generative AI helps generate artifacts that previously relied on humans, offering innovative results without any biases derived from human thoughts and experiences.

In contrast to today’s machine-learning algorithms that learn only from existing data and do not produce new information on their own, generative AI uses neural networks and models inspired by the structure of animal brains to create something completely new like original music, artwork, video, and sentences.

Synthetic data is also an example of generative AI, helping to augment scarce data or mitigate bias. Moreover, key features of the metaverse, including digital avatars, will rely on generative AI. As we can see, generative AI could influence nearly all aspects of human activity.

Here are some of Gartner’s key predictions about generative AI:

  • By 2025, generative AI will produce 10% of all data with 20% of all test data for consumer-facing use cases.
  • By 2025, generative AI will be used in 50% of drug discovery and development initiatives.
  • By 2027, 30% of manufacturers will use generative AI to enhance their product development effectiveness.

Startups Leading Generative AI

Stability AI is a London-based generative AI startup that describes itself as the “world’s first community-driving, open-source AI company.” It has just raised $101 million in an oversubscribed funding round that valued the company at $1 billion, according to Bloomberg. Stability AI is the company behind Stable Diffusion, an open-source text-to-image generator that launched this summer.

Adapt, Cresta, AI Labs, and Jasper are among the startups at the forefront of build applications for this new class of language model and have captured eye-popping valuations during an otherwise difficult time for tech startup funding. Sequoia Capital, Venture Group, and Madrona are among the companies funding generative AI.

How Generative AI Can Add Value to Brands, Retailers, and Restaurants

While it’s still quite early to capture exactly how companies will use generative AI, here are a few possibilities for brands, retailers, and restaurants to consider.

Automate and improve brand media assets: Imagine a CPG brand funneling its creative and copy assets into a generative AI tool to create completely new and improved versions of media content like ads, videos, and copy. This type of media asset automation frees up marketers to spend more time on brand strategy that can increase sales. Also, the generative AI-produced assets could bring new creative approaches to brand media assets while also reducing costs.

 

  • Accelerate personalization for retailers: Retailers must curate solutions to meet shopper needs and expectations for personalized products, services, and communications. We could see retailers use generative AI to create intelligent avatars for shoppers seeking personalized customer support. Retailers that develop lifelike AI-based avatars can help personify the retailer’s brand and provide next-level service.
  • Enhance restaurant menu creativity and innovation: Restaurants could use generative AI to develop new culinary products and menus. A food service brand could apply generative AI design to new signature dishes with specific nutritional and sustainability considerations and parameters unlike any capability available today. It’s fun to think about the first restaurant to develop an entire menu based on this technology and how guests would respond to this type of culinary innovation.
  • Help solve labor shortages: Recruiting and hiring high-performing human talent is still a major challenge for many businesses, especially in the retail and restaurant industries. Generative AI could be of immense value here since the technology can take over some creative tasks typically performed by human employees. For example, generative AI can be used for content creation and communications-related work that could help fill vacant roles.

 

Generative AI to Help Drive Human Amplification

Early indications suggest that generative AI could usher in a new era for communication and creative development for brands, retailers, and restaurants. Many companies will see this new technology as an indispensable partner and essentially a co-worker for existing human employees. Think of generative AI as a co-pilot for many commerce occupations, helping humans produce more and better outputs.

While all of this may sound startling, we must increasingly acclimate to a reality in which machines execute many functions more effectively, affordably, and reliably than humans. Companies should start experimenting now to understand both the disruption and value creation that generative AI will bring to their industries.

Want to keep the conversation going? Get in touch?

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Category in Context: Shopping for Halloween

Colombe Bommelaer, Senior Director, Category Insights
14 November 2022

Halloween has become bigger over the years due to the “Christmasification” of the holiday that results from the expansion of Halloween into non-traditional categories. Further, as the pandemic winds down, party-hosting categories are seen being put front and center, both in-store and online. However, this season, shoppers were spooked by inflationary prices and persisting supply chain issues.

Join us for the Shopping for Halloween webinar on November 17th, to better understand the trends impacting the season, the interplay of the different Halloween categories and how retailers and suppliers have adapted to the current inflationary environment. Explore with us opportunities to best capitalize on those trends and prepare for the holiday season that’s coming next.

Want to attend our upcoming Halloween webinar? Get in touch.

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10 headlines from the 2022 Paytronix Loyalty Report

Barry Thomas, Senior Retail Thought Leader
11 November 2022

Paytronix’s “Loyalty Report 2022: Exploring Your Brand’s Most Valuable Guests” reviews the latest in restaurant and c-store loyalty trends and is an excellent resource for understanding key loyalty metrics and brand opportunities in these channels.

Here are 10 learnings from the report.

1. Loyalty programs are responsible for an 18%-30% increase in spending and visits.

Beyond generating consistently high visits and transactions across industries, brands, segments, and business models, loyalty programs provide many other benefits. For example, the data from these programs, from member demographics to the most popular menu items, is critical to any c-store or restaurant seeking to understand its customers better. Importantly, brands that overlay their loyalty data with artificial intelligence can secure potent predictive insights to drive higher sales.

2. Loyalty members spent around $2 more per visit than nonmembers.

Even though they often receive more value offers than nonmembers, loyalty members still consistently spend more and remain critical to driving traffic to restaurants.

3. Top-tier loyalty customers account for 2%-3% of customers and 5%-17% of total restaurant sales.

The most loyal guests are the highest spenders and most frequent visitors and drive disproportionate restaurant brand value. This unique cohort of devoted customers spends two to three times more than the average guest and is responsible for more than 50% of loyalty spend.

4. More than half (55%) of restaurants report that loyalty check sizes have increased more than the price of their items.

Many guests have spent more since loyalty check sizes rose more than the prices of their items, which is helping restaurant margins. The data shows that restaurants offering extras like ice cream and coffee have some of the largest loyalty check sizes because guests still want their favorite treats with their meals.

5. Loyalty customers spent substantially less on menu items whose prices rose more than 10% since last year.

We are learning that every brand’s most loyal guests will no longer tolerate double-digital price increases. Food service brands should recognize that even their most loyal customers have limits to what they will spend.

6. From 2019 to 2021, Gen Z loyalty members at QSRs expanded by nearly a third.

Gen Z has the lowest restaurant loyalty membership by age group, yet given its growth and future lifetime value potential, this generation is a segment to invest in. Also, QSRs need to monitor Gen X since this cohort has substantial spending power and kids in the household.

7. Full-service restaurants welcomed back loyalty members with a 9% jump in annual visits from 2020.

Despite the higher traffic in 2020, visit frequency is still down 11% from 2019. In 2021, the average full-service restaurant loyalty member visited 7.3 times, down from 8.2 times in 2019, or one fewer trip since the pandemic.

8. The ice cream/snack/coffee segment had the highest annual spending increase per guest since 2019.

This segment proved an exception again as guests’ annual spending increased 30% in 2021 over 2019. This trend indicates that restaurant customers are eager to spend on indulgent treats, perhaps as a small reward in a more stressful environment.

9. C-store loyalty members decreased 16% in 2021 from 2019.

The decline in loyalty members was led by a generational shift of the oldest cohort whose members are 56 and older. Overall in 2021, c-store loyalty members bought less fuel per trip but more fuel in aggregate, showing they visited more often. Both their spending per check and spending per year increased across all categories.

10. C-store loyalty members spent nearly 40% more in 2021 than they did in 2020.

Inflation’s impact on c-store products, especially fuel, has reached levels not seen since the 1970s. For that reason, it’s easy to see why loyalty members prioritize value shopping and making fewer trips to save money. Some c-store loyalty programs like United Dairy Farmers’ app offer members a “price lock” savings program for fuel. These well-received programs help customers hedge against rising gas prices.

Loyalty Marketing Remains Paramount to Brand Vitality

The Paytronix data illustrates the opportunity for loyalty marketing to build relationships between consumers and their most-loved brands. Loyalty marketing has always been important. Operating in a challenging post-pandemic environment, restaurants and c-stores must depend on their most loyal customers to drive growth and brand value.

Subsequently, loyalty marketing spending is booming as brands look to improve the customer experience, engagement, and retention. Various studies show that a brand’s previous customers are nine times more likely to buy from it than a new customer. A high-functioning rewards marketing system is required to guarantee customer loyalty, increase customer lifetime value, and drive revenue through repeat purchases.

Learn From the Best Loyalty Programs

The best loyalty programs fully understand their target customers’ pain points and needs in large part from member data. From there, these programs build simple solutions that customers understand, value, and use often.

Restaurants and c-stores can learn from best-in-class loyalty programs that, based on various rankings, often include Delta, Sephora, Chick-fil-A, Starbucks, Panera, and REI. These elite loyalty programs deliver the transactional and experiential benefits to members that brands must provide.

The best loyalty programs often:

  • Build vibrant communities to connect more meaningfully with members.

  • Give members fun, emotional, and rewarding experiences.

  • Connect with members in ways that truly surprise and delight.

Winning brands must move beyond just transactional value with their loyalty marketing and toward providing emotional responses and connections that drive authentic and long-lasting loyalty.

Want to keep the conversation going? Get in touch.

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Post-midterm policy changes mean new macro reality for US retail

Doug Hermanson, Principal Economist
11 November 2022


The midterm election could mark a break from the previous three years when government spending as a share of the economy increased the most since World War II. Also lurking in the election’s wake is an emerging recession risk from surging inflation and interest rates.

The exact policy outlook is impossible to know partly because election results are still coming in, but future policy is likely to be characterized by outright brinkmanship or government spending cuts. Both are dramatic changes from the coordinated, high government support of the past three years.

Speculating on What We Know Now

Even as votes are still being counted from the Nov. 8 election, Republicans are almost certain to take control of the House but with a razor-thin majority.

Democrats have a narrow inside track to retain control of the Senate, but that may not be determined until races are called in Arizona and Nevada. If those results are split, we’ll have to wait until Dec. 6 when Georgia holds a runoff.

Assuming a split Congress, Republicans and Democrats will have to quickly compromise in 2023 to avoid a government shutdown. A continuing resolution passed in late September kept the government funded through Dec. 16. Democrats could pass another continuation before the new Congress is sworn in on Jan. 3, but after that, bipartisan action will be needed to avoid a government shutdown.

House Minority Leader Kevin McCarthy, who is bidding to become the next speaker, has suggested that Republicans will demand spending cuts in exchange for raising the debt ceiling. While McCarthy said nothing was predetermined, some changes to government transfer programs may be in the cards in 2023.

The change in political makeup and lower levels of COVID-19 will make for a starkly different policy environment in 2023 than the unprecedented government policies of the previous three years.

The robust bipartisan government support provided at the height of the pandemic in 2020 and again in 2021 after the Democrats took control of the House, Senate, and White House expedited direct payments to consumers at an unprecedented level. The three stimulus checks, expanded unemployment benefits, and doubling of food assistance, among other support programs, contributed to record retail spending in 2021 and played some part in fueling high inflation.

Looking at broader government spending, federal outlays have accounted for 25% of GDP in 2022 even after an 8% reduction in outlays this year. This share is still higher than the historical and pre-pandemic average of 21%.

Federal Revenues and Outlays, 1973-2022
(percentage of GDP)
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Sources: Congressional Budget Office, Department of the Treasury, Office of Management and Budget

What Will Be on the Chopping Block Affecting Retail?

Some pandemic-related spending still in place could change as Democrats look to compromise on budget cuts. Increased food assistance and expanded Medicaid benefits are tied to the declaration of a national health emergency that remains in place. While the declaration is under the discretion of the Biden administration, President Biden’s recent comment that the “pandemic was over” could set the table for removing it.

If the emergency declaration is not renewed, it would cause a reduction in Supplemental Nutrition Assistance Program (SNAP) benefits, which doubled during the pandemic to represent 10% of all food spending. Food assistance will remain well above pre-pandemic levels due to a methodology change in how the program is adjusted for inflation that went into effect last fall. The program received an even bigger boost in October when it was adjusted for the 12.5% food inflation consumers experienced over the past 12 months.

Drugstores and retail pharmacies may also be directly affected if some emergency measures are rolled back. The US Department of Health & Human Services estimates that 15 million people will lose Medicaid coverage without the national emergency declaration.

Broader reforms to Social Security and Medicare or defunding some parts of President Biden’s Inflation Reduction Act — all of which are thought to be on some Republicans’ wish lists — could have much bigger implications for the economy, but the implications for retail are more difficult to tease out.

Also, a slim House majority likely means that big spending cuts or changes to Social Security will be harder to pass, even among Republicans.

More details will be needed to understand the extent to which lower spending tames inflation. Fewer direct payments or loans to consumers and businesses will help reduce inflation by immediately shrinking demand. Other spending or regulatory changes would likely affect inflation only in 2024 or beyond.

The Return of Government Shutdowns

If the two sides can’t reach a compromise, government shutdowns are likely to make a comeback. The last one, which ran from Dec. 22, 2018, to Jan. 25, 2019, furloughed 380,000 workers and cost the economy at least $11 billion.

Another government shutdown would dampen retail sales, although past retail patterns indicate that retail sales recover quite quickly in the month after a shutdown. A months long shutdown, however, would have a much bigger impact because some government transfers, such as food assistance, may not be available for shoppers.

If Republicans take both the House and Senate, changes are likely to be bigger in scale, but government shutdowns less likely.

More to Come

There’s a lot more to talk about and that’s what Kantar will be doing in early December when we discuss the convergence of government policy and retail. Subscribers can tune in to get a deep dive on how food assistance programs, monetary policy, and tax policy affect retailers and shoppers.

Want to keep the conversation going? Get in touch.

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Connecting with Hispanic shoppers

Renata de Moura, Senior Director
26 October 2022

With Hispanics living in the US now accounting for 19% of the US population and growing, brands and retailers must understand their shopping preferences and behaviors and how to attract them.

While Hispanics in the US now number 62.5 million and are expected to grow to over 105 million by 2055, according to Statista, they are not a monolithic group. They come from a variety of backgrounds and countries. So how can retailers and brands appeal to these diverse shoppers? By focusing on the three key characteristics that all Hispanics have in common: values, culture, and tradition.

Hispanics are highly likely to choose brands that speak to and celebrate their values and culture:

  • More Hispanics than non-Hispanics shop at retailers and brands that reflect their values (54% of Hispanics versus 47% of non-Hispanics in 2022), according 2022 ShopperScape®. Data through August.

  • 57% of Hispanics seek brands that acknowledge their culture and unique tradition (versus 41% of non-Hispanics), according to Kantar Monitor 2021.

Retailers and brands can also target shoppers in stores. Hispanics overindex on using smartphones, retailer websites, and digital checkpoints in stores. In-store promotions advertised on a retailer app or QR codes would likely have high appeal since Hispanics are tightening their budgets as prices rise. In 2022, 66% of Hispanics say it is important for them to stick to a budget (versus 59% of non-Hispanics). Offering in-store digital tools that show an understanding and appreciation for their culture/values will also resonate with Hispanics and help gain their loyalty.

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ShopperScape is your direct connection to the shopper, tracking monthly shopper behavior and attitudes with 3,000 shoppers across 115 retailers and 30-plus product categories. We help you understand where shoppers shop, what matters to shoppers, and emerging and timely shopper trends. Note that ShopperScape research is conducted in English. To learn more contact kantarshopper@kantar.com.

Want to keep the conversation going? Get in touch.

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US inflation update: Disciplined spending takes center stage

Julie Craig, VP of Shopper Insights

As shoppers look ahead to the holidays with nearly a year of inflation fears under their belts, managing household finances is a top priority. September 2022 ShopperScape® data reveals that shoppers are leaning into disciplined spending to help make ends meet. 

Shoppers have used a variety of short-term strategies over the course of 2022 to navigate rising prices, but the increase in disciplined spending strategies indicates that shoppers are now making longer-term and more permanent changes in how they spend.  

Shoppers have found some relief in switching to discount retailers and private label brands, along with tried-and-true deal seeking. But as an inflationary period threatens to turn recessionary, shoppers have made fundamental changes to spending and saving behavior. 

Disciplined spending includes: 

  • Using a calculator while shopping to track spending 

  • Cutting back on nonessential purchases (even great deals) 

  • Minimizing fees by using pickup instead of delivery 

  • Purchasing used items instead of new 

  • Doing things themselves instead of spending money on services like housekeeping, pet grooming, salon services, and yardwork 

Older shoppers (boomers and matures) are more likely to lean into disciplined spending to manage fixed incomes and pensions and shrinking retirement accounts. 

Retail and Brand Implications  

This shift to disciplined spending means retailers and manufacturers will need to reframe value, particularly in categories where shoppers are more likely to trade down, skip a purchase, or even attempt to create their own version of a product or service to save money. Highlighting entry-level price points, money-back guarantees, price matches, and post-purchase support can help reduce purchase risks and make products accessible. 

Winning the trip is especially important for retailers as shoppers pare back spending. Offering payment alternatives — including buy now, pay later or other pay-over-time options — along with enhancing loyalty programs to allow shoppers to use and accumulate points rapidly can help retailers become a destination of choice.  

Supporting the DIY trend can also draw in shoppers and replace potentially lost purchase occasions. 

Shoppers are making behavioral shifts and creating long-term habits as inflation persists, but retailers and brands still have an opportunity to secure shoppers and trips as the holidays approach. 

Learn more by contacting kantarshopper@kantar.com

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12 food service trends to expect for 2023

Barry Thomas, Senior Thought Leader
14 October 2022

What’s ahead for food service next year? As we look to 2023, we see 12 trends that restaurants will want to tap into to differentiate themselves. But retailers should pay attention as well because these 12 areas indicate a fundamental reset of the CPG industrial food complex.

More guests will seek value

The rising cost of living is impacting restaurant consumers and the entire food service industry. The declining sales or traffic that many restaurants reported this year will likely continue in 2023. Chains like McDonald’s and Chipotle say their lower-income consumers are spending less, while their higher-income consumers visit more frequently as they trade down from higher-end full-service restaurants.

We can expect more restaurant consumers in 2023 to seek deals, use coupons, and leverage loyalty program rewards to help offset the cost of restaurant meals.

Clean eating will accelerate

Consumer demand for clean-label meals will keep growing as more people develop material concerns over ultra-processed foods.

Various studies show that about 10% of the conversations consumers have about plant-based or vegan food involve clean eating and refer to natural foods that are healthier, sustainable, and free of artificial ingredients. More consumers realize unprocessed foods are close to a natural state, unlike processed foods that alter food taste to drive sales.

Expect more restaurants to respond by promoting even more clean-label menus featuring food free from chemical additives and rich in nutrients that help support well-being.

Local food origins will matter more

More consumers are interested in getting their food from their own communities. Locally and regionally sourced foods are, in many cases, better for communities and the environment. In fact, more consumers want food and meals sourced directly from farmers. As such, we can expect four farmer routes to market to expand: mobile farmers markets, farmer food hubs, retail farmers marketplaces online, and direct-to-consumer farmers markets.

Millennials and especially Gen Z consumers prefer locally sourced food and drinks. Restaurants that rely exclusively on traditional industrial food supply chains could face headwinds if they don’t change some of their food sourcing strategies.

Flexitarians will gain more traction

Flexitarian diets are becoming more popular as consumers eat less meat less often and consume more plant-based foods. Eating red meat has been linked to various health and climate issues, and factory farming, combined with the overuse of antibiotics, has alarmed consumers in many countries. A new survey commissioned by Sprouts Farmers Market indicates that 47% of Americans ages 24-29 think of themselves as flexitarians.

We can expect more restaurants to offer more plant-based meat alternatives, which are more profitable because they are often cheaper to produce than meat. The halo effect these alternatives give to menus is an added boost.

Seafood alternatives will arrive

The need for seafood alternatives has become imperative. Fish consumption has doubled since 1998, and new research from Stanford projects that global fish consumption will increase another 80% by 2050. Spoonshot 2022 data shows that consumer interest in pescatarian diets more than doubled (117%) since 2016 and grew 9% in the 12 months to April 2022.

We will likely see plant-based seafood such as carrot-based salmon, pea-based tuna, and palm-based crab increase as seafood substitutes at restaurants.

Vertical farming will grow taller

Traditional farming requires heavy use of land and resources to grow crops, and even more resources to harvest and transport the crops sometimes thousands of miles to where consumers can buy them at retailers and restaurants.

To source crops more reliably, affordably, and sustainably, more restaurants and suppliers are turning to vertical farms. Many restaurant industry leaders expect operators to use on-site vertical farming pods like the one provided by Vertical Field, which partners with restaurants to place and grow local vertical farms near their locations. 

Vertical farms help promote more locally grown menus and more sustainable agriculture.

Mood foods will expand

Psychotropic mixtures are emerging as potential functional ingredients since consumers’ idea of health now encompasses emotional as well as physical attributes. For example, with the legalization of cannabis and the penetration of CBD in multiple food categories in parts of the world, consumers are more open to incorporating controlled substances into the wellness culture.

Mood foods and drinks that include cannabis and mushroom compounds are finding traction with consumers seeking to relax, reduce stress, or sleep better. Already THC has made its way into many different menu items and CPG goods. More restaurants will likely experiment with mood foods and beverages in 2023.

Solo dining will be more popular

In the context of the growing self-care movement, solo dining is growing, and so are the hashtags #diningalone and #solodate, which have generated over 150 million views on TikTok. According to a Resy report, one-third of guests dined alone this year, and food service outlets are making it easier to do so with counter seating becoming mainstream. More food service providers will reconfigure space for solo diners.

Restaurants will step up their marketing and storytelling

Ecommerce, social commerce, and influencers are creating new ways for brands, retailers, and restaurants to tell their brand stories. Already more restaurants are leveraging their physical outlets as content engines for more social media activations and livestreams. More restaurants will likely livestream from their restaurants and kitchens to promote culinary innovations and specials, which consumers often want to learn more about.

Also, look for more restaurants to partner with employees who have the skills and passion to become micro-influencers. This is already happening at Dunkin' and Walmart and will continue in 2023. 

Digital behaviors will stick

You could argue that restaurants were slower than retailers to embrace technology. Yet the pandemic helped restaurants — and restaurant consumers — mature quickly in the digital realm.

Using digital menus, digital platforms like OpenTable, and QR codes are now permanent behaviors for restaurant consumers. Recent PYMNTS.com research shows that compared with 2019, 36% of consumers use mobile apps to order ahead more often, 32% order from restaurant websites more often, and 28% use food delivery aggregators like DoorDash more often.

We can expect digital ordering to increase in 2023, along with the need for restaurants to have solid online-to-offline capabilities to thrive.

Apps and loyalty marketing will increase

According to a Bluedot 2022 restaurant study, nearly 70% of restaurant consumers use apps and loyalty programs to find deals and earn free food. More consumers are downloading apps, with high-income households preferring apps to other methods of finding discounts. Coupons for dinner are the most popular followed by lunch, with breakfast and snacks showing minimal demand.

We will see more restaurants amp up their loyalty marketing and investments. The Delta-Starbucks loyalty partnership is one example of big brands working together to drive more value for their users. More restaurants will invest more capital and talent into apps and loyalty marketing to drive brand value and equity.

Data, AI, and automation will advance

More chains are leveraging AI especially at the front of house to automate drive-thru orders. Checkers and Rally’s are expanding their AI-based voice assistant given the positive test results. At the same time, we see more back-of-house automation with various chains piloting automated kitchen robotics. Finally, we are starting to see fully automated restaurants in other markets like Baskin-Robbins in South Korea and Pizza Hut in Israel. These are early steps for these brands yet show promising signals for more unmanned restaurants.

To capitalize on these emerging trends, restaurants should allocate more time and capital to future-back strategies where they can experiment with these emerging trends. Many of these restaurant pilots will fail, yet other tests will work and can be scaled across the enterprise today.

Given the pace of change in the restaurant industry, winning food service brands must develop a growth marketing mindset and an ongoing entrepreneurial culture to capture accretive growth. Lastly, successful restaurants will need to continue upskilling their digital intelligence at both the corporate office and perhaps, more importantly, at the franchisee outlet level.

Want to keep the conversation going? Get in touch.

Ross Cloyd

Kroger, Albertsons to merge in $25 billion deal

Ross Cloyd, Director, Grocery
14 October 2022

Speculation has swirled about a possible Kroger-Albertsons merger, and today that speculation became reality when the top two US grocery retailers announced that they have agreed to merge for nearly $25 billion. The joint company will have a national footprint with an expanded customer reach of about 85 million households. 

Kroger will acquire all the outstanding shares of Albertsons Companies’ common and preferred stock for an estimated $34.10 per share. This values Albertsons at about $24.6 billion, including the assumption of about $4.7 billion in debt. 

If the deal goes through, Kroger-Albertsons would become the No. 1 grocery retailer in the US with a presence in 48 states and the District of Columbia. The transaction is expected to close in early 2024, subject to the required regulatory clearance and other customary closing conditions. 

Earlier this year, Albertsons Companies announced that it was launching a strategic review as the 24-month IPO lock-up was set to end in June 2022. At that time, Albertsons and Ahold Delhaize USA were rumored to be in discussions, but no other details were announced. 

Store Plans 

Together, Kroger and Albertsons employ more than 710,000 and operate 4,996 stores, 66 distribution centers, 52 manufacturing plants, 3,972 pharmacies, and 2,015 fuel centers.  

To complete this transaction, Kroger and Albertsons expect to divest stores since the two retailers overlap in certain markets.  

Albertsons is prepared to create a subsidiary called SpinCo that would be spun off to Albertsons’ shareholders before the merger closes and operate as a stand-alone public company. Kroger and Albertsons will decide together which stores will make up SpinCo as well as the pro forma capitalization of SpinCo. This new company will have an estimated 100 to 375 stores. 

Kroger currently operates in 35 states and is rapidly expanding its Ocado-powered customer fulfillment centers (CFCs) nationally to increase reach and gain additional Boost memberships. Before this merger was announced, Kroger had planned to expand its Ocado CFCs in the Northeast where it currently does not have a presence. With the Albertsons merger, Kroger will have brick-and-mortar stores to expand its footprint further. 

Investment Plans 

Kroger plans to invest in lower prices for customers and expects to reinvest about $500 million of cost savings from synergies to reduce prices. 

Another $1.3 billion will be invested in Albertsons stores. Kroger also plans to build on its recent investment in wages, training, and benefits. The combined company expects to invest $1 billion to continue raising wages and comprehensive benefits after the close. 

The merger creates a private label business of approximately $43 billion with a combined portfolio of approximately 34,000 private label items. That scale will make Kroger-Albertsons one of the largest CPG companies in the US. 

During the call announcing the merger, executives also said the merged entity will focus on delivering quality, value, and choice through strategic initiatives:  

  • Fresh: Serve America with fresher food, faster 

  • Our Brands: Broaden selection of Our Brands products to offer customers higher quality and better value 

  • Personalization: Best-in-class personalized experience 

  • Seamless: Deliver an enhanced and seamless customer experience requiring zero compromise 

Stay tuned for our comprehensive point of view on this merger’s implications for both retailers and the retail industry. 

Want to keep the conversation going? Get in touch.

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10 headlines from Kantar's new impulse study

Barry Thomas, Senior Retail Thought Leader
6 October 2022

Kantar’s Retail in Transformation: Impulse study focuses on shopper behavior and in-the-moment triggers in store, online, at curbside, in ambient environments, and at home.

The study intercepted 700 shoppers across in-store, online, pickup, and delivery experiences. The impulse study used a geofenced shopping methodology to assess behaviors in store and online during the shopping journey. Participants were asked to record photos and details of the impulse moment to answer the following questions:

  • What was the trigger?
  • Why did they select the impulse item?
  • What hot spots or fixtures were involved?
  • What sentiment did they feel?
  • What shelf and promotional conditions existed at the time of the impulse purchase?

Here are 10 headlines from the study:

1. Nearly 80% of shoppers made an impulse purchase across store-based retailers, with more than two-thirds buying multiple impulse items.

2. Within the store, the aisle is the primary location for impulse purchases. More shoppers bought from the aisle than from any other in-store location.

3. Most impulse purchases had no special pricing or promotional condition.

4. About one-third of in-store participants reported feeling hungry as they began shopping, reinforcing the strong correlation between hunger (and thirst) and immediate-consumption purchasing.

5. CPGs should dial up in-store sensory cues to interrupt shoppers’ pathways and spark emotions (including hunger and thirst) to foster impulse moments.

6. Physical stores are the primary location for impulse buys but are only one part of the shopping ecosystem. Layer impulse opportunities throughout the online-to-offline journey.

7. Kantar’s framework of impulse shopper personas can provide a new playbook for how different shoppers approach impulse opportunities.

8. Click-and-collect remains a massive opportunity to drive more convenient impulse sales among online shoppers. Cracking the code on click-and-collect impulse sales requires physical and digital solutions.

9. Beyond traditional retail environments, ambient impulse white space is everywhere. Brands are winning the ambient impulse moment with new business models and breakthrough experiments that go beyond the store.

10. Perhaps no channel is more important to retailers and FMCG brands for impulse than the home, where far more impulse occasions happen. More CPG brands, retailers, and even restaurants are pivoting to shoppers’ homes to capture snack and drink experiences that previously occurred in restaurants, bars, and convenience stores.

Kantar’s impulse study outlines new insights and growth opportunities across all four growth paths the industry should pursue: stores, online, ambient environments, and the home. Kantar’s research and work with clients indicate that impulse success now and in the future requires us all to be impulse entrepreneurs, where we use a growth marketing approach to capture accretive opportunities.

As such, the new post-pandemic impulse landscape means that we all need to unlearn many less effective impulse approaches of the past and move toward new impulse strategies, experiments, and growth hacks to accelerate successful solutions.

Learn more about Kantar’s Retail in Transformation: Impulse study. This new research focuses on the behavior and triggers of impulse moments during shopping with shoppers across many types of impulse occasions.

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Tiffany Hogan

Target's holiday timeline: Key dates to be holiday-ready

Tiffany Hogan, Director
27 September 2022

Everyone has that one friend who puts on a chunky sweater and boots to get the first pumpkin spice latte of the season and erects their Christmas tree on the very first 60-degree day of the fall – even if you haven’t finished the Labor Day grilling leftovers. Maybe that person is you? This year, that person is definitely Target.

A flurry of news releases in the last few weeks tells us that Target is ready for the holidays and wants shoppers to be, too. With shoppers’ concerns for inflation rising consistently, Target, like its competitors, wants to grab shopper spending early before it runs out.

Here is a look at Target’s holiday prep timeline and what it means for your holiday planning.

End of Q2 2022: Holiday inventory is already here

Despite slashing lots of slow-moving inventory, Target ended its second quarter with more inventory than it started with, mostly driven by early receipts to guarantee that key items will be available for the holidays. Until it sells, holiday merch is sitting at the ports, costing Target margin but giving the retailer flexibility to put it on shelves exactly when it’s needed.

Takeaway: Target is setting up for a strong start to the holiday season but will look to suppliers to help it finish the season with relevant merchandise from open-to-buy.

Sept. 12: Target releases its 2022 Top Toys List

This announcement actually came a full two weeks later this year than it did in 2021. But the bigger difference is a multiyear exclusive deal with FAO Schwarz whose toys will get the “Disney” treatment in stores, with dedicated space and interactive experiences throughout the season.

Takeaway: Target will continue to lean on these exclusives to drive traffic, but the additional space will have to come from somewhere. Toy and adjacent categories could see a shift in shelf space to accommodate this new experience.

Sept. 18: Circle Week begins

While not a holiday-specific promotion, it is notable that this semiannual event designed to drive broader loyalty engagement and adoption comes just after key holiday merchandise hits shelves.

Takeaway: Circle Week signals that personalized offers for highly engaged members are coming next and that Target is likely to focus on basket-building strategies and gaining early share of holiday spending.

Oct. 6: Target Deal Days begin

Target is attempting to get ahead of Amazon’s “not-Prime Day” deals this year by launching Deal Days a full week earlier. While savings are available to all shoppers, additional incentives to spend more like Target Circle Bonus offers will also crop up for loyalty members. This also marks the start date of Target’s Price Match Guarantee.

Takeaway: Deal Days are just the beginning of Target’s holiday campaign since the retailer is looking to gain share in more than just gift categories. Look for Target to keep up its focus on grocery and essentials with deals that drive bigger baskets for both.

To the holiday and beyond

While the holidays are no doubt an extremely important time for Target, its bigger focus is on winning a greater share of frequency trips and categories. Once the holiday dust settles, Target wants those same shoppers who came for family pajamas and gingerbread houses to return for milk, bread, shampoo, and vitamins. Target will look to use its strength in holiday and seasonal merchandising to engage shoppers all year round.

For a much deeper dive into what Target’s long-term strategies and challenges could mean for your brand, please join us Oct. 11 and 12 for Kantar’s Target Virtual Workshop. Our jam-packed agenda is sure to help you ask and answer the right questions to grow your business with Target.

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Why more micro markets are on the horizon

Barry Thomas, Senior Thought Leader
31 August 2022

Micro markets are becoming one of the fastest- growing segments in commerce driven by their more favorable shopper attributes than traditional vending machines.

Micro markets are unattended retail and food service environments. They are a hybrid form of food service, vending, and convenience retail stores that provide a better customer experience and healthier assortment than a typical vending station.

Despite being physically bigger and offering more comprehensive selections, micro markets are not more complicated to use than vending machines. At a micro market, shoppers choose products off the shelf and scan them at a kiosk or use walk-out technology for quicker, frictionless shopping.

Micro Market Attributes

Micro markets go beyond the traditional vending machine model with these key attributes:

  • Micro markets can sell 200 or more products, far more than the 40 or so that vending machines typically offer.
  • Micro markets provide healthier options — think fresh salads, wraps, and soups — than vending machines whose offerings are typically loaded with carbs and sugar.
  • Micro markets usually employ cashless payment systems (e.g., credit cards, mobile wallets, and newer checkout-free technology) that rely on the honor system, where shopper are expected to pay without human intervention or supervision.
  • Micro markets are commonly found in various environments, such as co-working offices, multifamily residential complexes, schools, hospitals, restaurants, and hotel lobbies.
  • Shoppers often describe micro markets as a 24/7 convenience store at the office or in their apartment building, where they can access and purchase healthy snacks and beverages throughout the day.
Recent Micro Market Examples

Entertainment company Dave & Buster’s partnered with Coca-Cola this year to launch The Game & Go micro market in partnership with Zippin, the checkout-free technology company.

The Game & Go store, located in the middle of Dave & Buster’s near all the games, offers packaged snacks and drinks, including cans of beer and wine (with the latter two requiring consumers to show an ID to purchase). The micro market is perfect for customers who want to grab a snack and a Coke and then return to their games.

Given the Zippin technology, the store operates much like an Amazon Go store, where shoppers pick up their products and are charged when they walk out.

Hospitality company Sodexo, in partnership with technology provider Yo-Kai Express, is launching micro markets on college campuses similar to its new format at New Mexico State University.

The Yo-Kai Express kiosks let customers order and pay on touch screens. With this technology, Sodexo provides students with 24/7 access to healthy and delicious meals late at night when demand is often high and meal options limited.

At the Denver Broncos home stadium, Empower Field at Mile High, fans can purchase from nine micro market stores equipped with Zippin’s checkout-free technology. Analysis from the stores indicates that since the checkout-free technology rolled out, the average transaction time declined from 2 minutes to 37 seconds, with 30% of transactions taking place in 15 seconds or less. The micro markets have also shown an overall sales increase per game and a 42% increase in transactions during peak concession periods.

More micro market operators are looking to expand into stadiums, universities, and restaurants. Micro markets are also growing in government buildings, hospitals, health clubs, hotels, museums, and art galleries.

Micro Markets Are Profit Makers

Micro markets are major profit growth multipliers. According to various industry reports, the old-school vending model generates an average profit margin of approximately 15%, while micro markets generate profit margins of at least 17%.

Three factors account for micro markets’ higher profits:

  • Micro market operators can charge more for the same products because buyers are willing to pay more for a higher-quality experience and the healthier products that micro markets provide.
  • With cashless self-checkout, customers are not restricted by the amount of cash they have on hand, so they almost always end up buying more than one product at a micro market kiosk.
  • Healthier products, frictionless payments, and a better shopping experience all drive more visits. Numerous research studies have proved that while a traditional vending kiosk receives 1.9 daily visits from a customer, a micro market enjoys 2.3 daily visits.
More Opportunities Ahead

Retail, food service, and FMCG brands should look at more scalable self-service options that provide a convenient, one-stop shopping experience.

Given the innovations that power self-service commerce, almost anything you can think of can be dispensed by machines and robotics, meaning that vending and micro market operators don’t have to focus on just food and beverages.

Micro markets have a bright future. Various industry estimates indicate up to 32,000 micro markets will be up and running by the end of 2022. Micro market operators that stay knowledgeable on trends and technology innovations are in a position to capitalize on this growth with customers who value a frictionless shopping experience across more categories and locations in the future.

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Amazon UK Fresh store pause is part of a larger Fresh slowdown

Celia Van Wickel, Senior Director
24 August 2022

Amazon is pausing its Fresh stores rollout in the UK due to the macroeconomic environment and revenue performance.

Only within the past month, Amazon was still focused on Amazon Fresh in the UK with its Tesco Price Match, but if you look at the details, the price match offer is online only. Amazon has struggled with Whole Foods outside the US, with seven UK locations since 2018.

Amazon has opened four Fresh stores in the UK and 18 in the US in 2022 to date but has pursued different strategies in the two countries:

In the UK, store openings focus on London.

In the US, Amazon has focused its larger-format Fresh stores in the suburbs. Amazon is using Southern California as a testing ground for how much it can penetrate physical grocery in a market.

Even in the US, signs point to a Fresh store slowdown amid the recent restructuring of the physical stores division. When you restructure, you pause as you re-evaluate strategy.

When looking at active US store openings from April to July 2022, Amazon had about 17 new locations that were hiring, an indication of opening soon. While two new Fresh stores opened in early August, most of the 17 locations removed job postings and do not have an opening date (Figure 1). Job listings for the Philadelphia; Eatontown, N.J.; and Tinley Park, lll., stores have been removed. The Tinley Park store had been expected to open soon.

Figure1. Hiring on Hold at US Amazon Fresh Stores

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Source: Kantar, Amazon job listings

Amazon has paused some openings due to supply chain issues. That appears to be the case with the Brookfield, Conn., location, which was expected to open in June. Supply chain issues have been evident in newly opened US stores with shelves not fully stocked.

Most stores have taken at least 14 months to open to include the expensive Just Walk Out technology. A store in Plainview, N.Y., was secured in July 2021 with no signs of opening at this time.

Unrealistic Growth Goals

According to the Q2 2022 ShopperScape® Grocery Deep Dive study, only 0.5% of US grocery shoppers had shopped Amazon Fresh. The stores cover only a small percentage of households to become sizable in grocery at this time.

In spring 2022, Kantar forecasted that at the current pace of store openings Amazon Fresh may have only 155 stores in the US by 2027.

For the US, Amazon has a stated goal of thousands of Amazon Go and other store formats. I believe those goals are unrealistic in the short term and may represent only 1,000-plus stores among the three primary physical banners of Fresh, Go, and Whole Foods in the US. Whole Foods already contributes over half of that goal. Amazon needs to scale well above 1,000 stores to gain significant share of the grocery market.

It was noted that macroeconomic issues are part of the reason Amazon is pausing the Fresh store rollout in the UK, which puts greater pressure on succeeding with new stores. Amazon has aimed to be price competitive with Amazon Fresh stores, but locations have opened in more affluent areas. Earlier this year, Placer.ai saw Amazon Fresh shoppers in the US cross-shopping grocery stores, and at more affluent Trader Joe’s and Whole Foods.

Amazon’s store strategy is evidently in flux, and the retailer has convened a new team to refocus its efforts. Stores are part of its long-term micro-fulfillment goals to speed pickup and delivery.

Things Are Shifting for Amazon

Just Walk Out technology clearly has value, given its leadership shift to the AWS division. If Amazon could solve for a retrofit solution for Just Walk Out, it could scale the technology to Whole Foods, maximizing its Store Analytics offer for advertisers. The data is too valuable. While small relative to Amazon’s total net sales, physical store sales have been growing in the low double-digit range in 2022, a caution for Amazon. Amazon is a test and learn company and will pivot as it learns, refocusing store strategy.

Want to see more food service related content? Check out our brand new offer, Kantar's Food Service Insights.

Join our upcoming webinar: Kantar’s new foodservice coverage and the retail opportunity.

Date: Thursday, August 25, 2022

Time: 01:00 PM Eastern Daylight Time

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Power Up: Building brand value during disruptions

Barry Thomas, Senior Retail Commerce Thought Leader
J. Walker Smith, Chief Knowledge Officer, Brand & Marketing
Niels Neudecker, Head of Brand Guidance Solutions, Insights, Kantar North America
Barry Thomas, Senior Thought Leader, Consulting Retail Kantar

 

Disruptions

This is a moment of disruption, a spirited moment of change. Oftentimes, the instinct during disruptions is to pull back on brand building: to take value out, rather than build more in. But Kantar BrandZ shows that high-growth brands embrace disruption and lean into building brand value. They power up. This is the critical imperative for an age in which disruption is the new normal. The trifecta of the continuing pandemic, the rise of inflation, and the Ukraine war has unseated any expectation of a return to pre-March 2020 “old normal.” More than that, though, these events solidify the notion that we are living through an era — and perhaps even a century — that is characterized by an unusually high frequency of disruptive events, both bad and good.

Brands should remember that with volatility, comes dynamism: disruptions always stir up new opportunities for change. Businesses that power up in the face of marketplace disruptions can ride the surge of positive change that often follows volatility. Why are volatility and dynamism so linked? Change, turnover, and realignment put pressure on incumbent models and processes. Critical mass appears in new places. Shifting lifestyles create new needs out of new habits and new routines, such as those created by the hybrid workstyles ushered in by the pandemic.

Everything is unsettled by disruptions. And that means value building opportunities for forward-looking brands: brands that are willing to invest in reinventing categories, breaking rules, and redefining expectations.

The period from the mid-1980s to the start of the global financial crisis is known to economists as the Great Moderation. That was a time when disruptions were less frequent and market swings less volatile. This relative stability meant a more forgiving time for brand planning and business investment. Globalism was the aspirational framework of exchange. Technology supplied the infrastructure of efficiency. Progress was benchmarked against shared international commitments to reducing global poverty, forestalling environmental degradation, safeguarding the global peace, and keeping inflation at bay.

With the turn of the century, volatility has returned, particularly after the financial crisis. Looking ahead, a plethora of structural disruptions, both ongoing and imminent, will weaken the underpinnings of the previous global regime. The key dynamic here isn’t the emergence of any one, individual disruption. Rather, it’s that we’re entering a macro environment of accumulating disruptions, all piling up and amplifying volatility and uncertainty. The current triple threat of the pandemic, inflation, and war in Ukraine is a foretaste of this future.

Dynamism

Disruptions can also be thought of as discontinuities: they interrupt business as usual and set off a virtuous cycle of dynamism. A cascade of changes large and small ensues. This volatility creates a dynamic moment of new possibilities, which in turn creates even more disruptions that keep the cycle turning. But brands must power up to lean into dynamism, or the window of opportunity will close on them. In crisis after crisis, BrandZ tracking has shown that brands that sustain value-added marketing during disruptions overperform compared to those who cut back or suspend their brand-building activities. Expect the same to be true going forward.

Disruptions come in many forms. Perhaps the biggest disruption of this century has been the iPhone, which triggered the mainstream adoption of smart, handheld digital devices. The effect on commerce has been profound, and it has piled up with other disruptions to utterly reinvent how consumers live, work, shop and manage their lives. The dynamism unleashed by the iPhone installed bold new brands as the next generation of dominant enterprises. This is reflected in Apple’s number one position in the 2022 Kantar BrandZ Top 10 — as well as in the next three positions of Google, Amazon and Microsoft, respectively, followed by Facebook/Meta in the number seven position and Nvidia at number eight.

Kantar BrandZ shows that brands building strong equity perform better both during and after economic disruptions. The next four most valuable North American brands — McDonald’s, Visa, Mastercard and Nike — are further evidence of this.

Value Add

To navigate this journey from disruption to dynamism, brands must be more thoughtful and more creative. This suggests three things in particular.

First, brands must widen their field of view with a more expansive understanding of context and scale. For example, Apple’s network of products ranges across an ever-widening array of hardware, payments, and pricing, which opens up applications and crossover opportunities, and safeguards affordability in the face of inflation.

In this same vein, brands need tracking metrics tied to new perceptions and behaviors. Going forward, emotional security will be more and more important to building brand equity. Greater relevance in local communities will be critical for big global brands. And shifting the architecture of brand operations from systems built for stability, to systems built for volatility, will be essential.

Second, brands must lock down trust if they are to be a haven of stability and safety during disruptive times. More than in the past, brands today must build trust on the basis of societal performance, not just product performance. The pressure on brands to go beyond government sanctions during the Ukraine War is a reminder that consumers are holding brands accountable to a set of responsibilities and expectations that are greater than the commercial sphere alone. Sometimes, this means a social purpose that is integrated into the entire organization. Nike is a good example with its ongoing commitment to inspiration and innovation for everyone, not just high-performance athletes, but particularly girls and minority communities.

Finally, brands must bring along the entire ecosystem of demand. Brands must de-risk disruption for consumers. Brands must become more imaginative in the structures, processes and practices that inform the vision and decisions of senior leaders. And brands must layer in foresights and futures thinking on top of traditional methods of extrapolation and linear thinking. The tried-and-true mechanics of marketing that worked well during the era of stability that is now in the rearview mirror will not suffice for the era of disruption and volatility that lies ahead.

Brands must power up and lean into building brand value during disruptions and dynamism. Consumers want something better, not a cheaper version of the same old thing. Brands must deliver greater value, not less, by powering up for the challenges and opportunities ahead.

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Ross Cloyd

Kroger's hunger for meal occasions accelerates QSR implications

Ross Cloyd, Director
Barry Thomas, Senior Thought Leader

Supermarkets and food service brands are both co-operating and competing more than ever these days to capture more on-demand meals. With consumers’ more active lives and more eating occasions sourced online, traditional grocers and restaurants are seeking to capture more ready-to-eat meal occasions.

While food away from home declined during the peak of the pandemic, it has since rebounded and is forecasted to have a 45% share of total food and alcohol consumption by 2027, according to Kantar estimates.

As such, retailers are compelled to compete more effectively for meals away from home. At the same time, restaurants need to compete for meals at home to grow their businesses, which is spurring new types of meal kits and other offerings. Not surprisingly, January 2022 ShopperScape® data shows that shoppers are spending more on prepared foods from retailers than a year ago.

Kroger is one retailer with a potent strategy to grow its share of on-demand meals. The supermarket chain has vastly ramped up its prepared meals strategy with new partnerships and innovations that the industry is watching closely.

Kroger’s comprehensive meals strategy includes:

  • Private label meal options: Kroger purchased Home Chef to develop meal kits and continues to expand in this area with its owned-brand heat-and-eat meals.
  • Grocerants: Kroger is testing a variety of grocerant formats focused on localized partnerships, including ClusterTruck and Burns Bistro.

  • Dark kitchens: Kroger is partnering with Kitchen United in markets where it offers several local and national restaurant brand meals. Shoppers can bundle food from multiple brands into one pickup or delivery order.

  • Instacart meals: The supermarket has launched a new line of ready-made meals on Instacart’s Ready Meals Hub site. The affordable and nutritious meals offer Kroger shoppers several different cuisines, and they’re easier and quicker to get than restaurant takeout.

  • Plant-based options: Kroger has partnered with Impossible Foods through Home Chef to develop plant-based protein products. This new offer is on trend with the growing number flexitarians who opt for more plant-based meals.

  • B2B food service expansion: Kroger’s Dallas business unit now offers assortments and next-day delivery for restaurants in the Dallas-Fort Worth area. Kroger’s new Restaurant Supply service leverages the supermarket’s fresh assortments, value prices, and wider product availability to help restaurants that often struggle with out-of-stocks.

Kroger’s aggressive and innovative meals strategy will continue to evolve. Kroger is clearly driving fresh, new solutions for on-demand meals that can accelerate its growth as an elite and omnicentric meals provider.

QSR Response

Restaurants, and especially QSRs, are the target for grocers like Kroger that are looking to capture a greater share of meals. In response, QSR chains are stepping up their strategies to compete with supermarkets and other QSRs.

QSR chains are embracing five growth strategies in this more competitive context:

  • Drive-thru and pickup innovation: QSRs are adding drive-thru lanes and piloting mobile-only lanes to serve customers quicker. They are also building drive-thru-only and pickup-only locations to serve off-premises to-go occasions, their fastest-growth area. More QSR and fast-casual chains are also expanding their pickup areas, often with lockers, to provide for faster and safer pickups.

  • Special access for app users: QSRs are using their own digital platforms to build their digital audiences and compete more effectively with third-party delivery apps like Uber Eats and Grubhub. More QSRs and fast-casual chains offer app-only menu exclusives that help drive app downloads. Shake Shack has even created an exclusive curbside pickup lane just for customers who used the Shack app to order.

  • Omni ordering options: More QSR brands are making their brand omnipresent so consumers can order using their website, app, or third-party delivery apps. Panera, a pioneer in omnicentric branding, just partnered with Google Maps to create a seamless order strategy. Consumers can now order from Panera within Google Maps after searching for the brand’s location.

  • Retail expansion: Another off-premises path that restaurant brands are pursuing is moving into the retail channel and acting like FMCG brands. These days you can find many food service brands in your local supermarket aisles and freezers, including Chick-fil-A sauces, Panera soups, White Castle sliders, and California Pizza Kitchen pizza.

  • Healthier menus: Most QSR chains are making ongoing efforts to offer healthier menu items as more consumers seek better-for-you meals and foods with immunity-boosting qualities. More chains are also testing plant-based menu items to appeal to the growing number of flexitarians.

Kroger’s meals on-demand strategy targets restaurants, and especially QSRs, which must keep innovating to fend off Kroger and respond to new customer behaviors.

Its size and scale give Kroger a competitive advantage when it comes to logistics and delivery. In addition, Kroger can leverage its supplier relationships to keep prices low. QSRs face several challenges in the current market, including saturation, more competition from grocers, and health-conscious consumers.

In many ways, the real winner in this highly competitive and dynamic meals solution environment is the shopper. Shoppers have an abundant — and constantly growing — list of innovative on-demand meal options from Kroger, QSRs, and others. With all these choices, they don’t have to compromise on meal freshness, quality, selection, pricing, or speed.

Want to see more food service related content? Check out our brand new offer, Kantar's Food Service Insights.

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Amazon Q2 2022 earnings sing a different tune than competitors

Celia Van Wickel, Senior Director, Digital Commerce
1 August 2022

Amazon is bucking the trend of a negative outlook and inventory pressures on its business.

Amazon topped estimates by reporting second-quarter revenue growth of 7% despite swinging to a net loss of USD2 billion from Rivian losses. Wall Street took kindly to Amazon’s rosy outlook and confidence in the shopper and its services, rewarding its stock 12% in after-hours trading (Figure 1).

Earlier in the week, Walmart issued a profit warning for the remainder of the year, which caused Amazon stock to decline 5%, an early warning for Amazon and its outlook. Shopify reported weak merchant GMV based on over assumptions of shopper ecommerce spending, which also impacted Amazon.

Figure 1. Amazon Stock Performance After Earnings Announcement

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A Rosy Outlook

Amazon reinforced the fact that growth accelerated to over 40% from May 2020 to May 2021. While demand has remained strong, the lapping of this high-growth period depressed its revenue growth rate for the following 12 months that ended in May 2022. Amazon growth rates will no longer require this historical explanation.

This, along with Prime Day in July this year, had Amazon providing a rosy Q3 outlook of 13% to 17% growth. Q3 operating income is expected to be flat to $3.5 billion, compared with $4.9 billion in the third quarter of 2021.

The guidance assumes no additional business acquisitions, restructurings, or legal settlements, which suggests that Amazon’s reported acquisition of One Medical may take some time to close. Antitrust is a consideration with the One Medical acquisition, but because of Amazon’s low penetration in healthcare, the deal is expected to move forward. The MGM acquisition took about 10 months to close.

It’s About Services Once Again

Worldwide net sales of $121.2 billion exceeded Amazon’s revenue guidance range and represented an increase of 7% year over year (10% excluding foreign exchange rates).

Services contributed to the net sales growth, rising 17% year over year as product sales posted a 2% year-over-year decline. Once again, net sales growth was supported by AWS and Advertising to lift the ship.

North America is a large chunk of this growth with a 10% net sales growth overall. International sales declined, which is why Amazon needs to ramp up growth areas abroad.

Amazon ad revenue climbed 18% in Q2 2022. Facebook, meanwhile, recorded its first-ever drop in revenue. Industry reports indicate advertisers are shifting ad budgets away from Facebook and Google and over to Amazon.

Inflation, Yes! Inventory Pressure, No!

Amazon was very clear that its issue is inflation, not inventory. Inflationary pressures remained elevated in Q2, similar to Q1, and include higher fuel, trucking, air, and ocean shipping rates, which Amazon expects will continue into Q3. The strong emphasis toward inflation rather than inventory may be to offset the impact that other retailers such as Walmart and Target have had with excess inventory hurting profit outlooks.

Amazon CFO Brian Olsavsky stated that Amazon is not expecting deep discounting to offset merchandise margin. However, some indications suggest that some of its categories, such as apparel, do need offloading, but not necessarily enough categories worth mentioning. All of this could support a fall Prime event, which was not mentioned at all. In Q1, Amazon announced Prime Day would occur in July.

“Our macroeconomic issues are principally on inflation, and we’ve been pretty transparent on that,” Olsavsky said. “I think the new thing this quarter is additional pressure on the energy electricity rates in our data centers because of the ramp up in natural gas prices if you’ve seen that. So that’s probably the new information. And then the other inflationary factors, well, some of them are coming down slightly.”

Prime Membership Balanced on Strong Consumer Demand

Prime membership retention is above expectations. ShopperScape® data, January 2022 through June 2022, shows that Amazon has retained Prime members in the US since the membership fee increased at the end of March for existing Prime members. Therefore, the recently announced Prime fee increase in Europe of approximately 1 euro per month (and lower fees than the US) may not be that big of a deal.

Amazon is getting more productivity out of its fulfillment network with higher in-stock levels, faster delivery, and stepped-up shopper demand. According to The Wall Street Journal, Grubhub added 2 million subscribers to its delivery program in the two weeks since it inked a deal with Amazon.

“We’re also seeing revenue accelerate as we continue to make Prime even better for members, both investing in faster shipping speeds, and adding unique benefits such as free delivery from Grubhub for a year, exclusive access to NFL Thursday Night Football games starting Sept. 15, and releasing the highly anticipated series ‘The Lord of the Rings: The Rings of Power’ on Sept 2,” said Amazon CEO Andy Jassy.

Third Party Balances Weak First-Party Sales

Amazon noted that third-party sellers represented 57% of all units sold on Amazon in Q2, the highest percentage ever. That happens when you have no first-party sales growth (online stores), which were down 4% in the second quarter. Online stores, first-party lack of growth for Amazon does not mean no first-party brands see growth. As example, Reckitt is seeing 10% growth on marketplaces globally in the first of this year.

And it’s important to note that Prime Day 2021 was in Q2, an area where brands invest. As noted, Amazon is confident the accelerated shopper demand from the pandemic and stimulus, which brought down the first half of 2022, dissipated after May 2022. Comping a slower period may help balance out first party in the second half of the year.

One of Amazon’s growth engines for third party is its new Buy With Prime program that lets Amazon FBA (Fulfilled By Amazon) sellers support Amazon-fulfilled Prime services on their owned websites. Amazon danced around a question about Buy With Prime engagement by not disclosing actual engagement. There is evidence of Shopify sellers embracing Buy With Prime, but the question is at what scale. Buy With Prime was leveraged in Prime Day promotion on sellers’ websites.

In April, Amazon implemented a 5% seller fuel and inflation surcharge that it is not ready to remove at this time.

Physical Stores Offer Growth, but Quiet

Amazon disclosed that it has opened 12 new Amazon Fresh stores in the US and UK this year. Physical stores grew once again in the second quarter at a not-too-shabby 12%, but at a growth rate the same as US grocery inflation. Most stores are grocery and in the US.

This was the first quarter to include 66 closed Amazon 4-Star, Books, and Pop Up stores. With the continued growth in physical stores, these closed formats clearly were negligible to physical store sales, supporting the role as test-and-learn stores.

In our assessments at Kantar, Amazon Fresh has numerous new stores in the US actively recruiting, with many planned between 2022 and 2023. Amazon Fresh store openings are likely to increase heavily in the second half of the year. Amazon Fresh stores, which will all include Just Walk Out technology, are important in Amazon’s new data platform for physical stores, which also supports brand advertising investments. Analysts failed to ask Amazon executives about physical store plans in the past quarterly earnings calls.

Kantar forecasts Amazon US 2022E retail sales at 13.8% growth. This estimate assumes stronger retail sales in the second half of the year with Prime Day, Prime membership value, and shoppers looking for good holiday deals to offset inflation. Forecasts will continue to be balanced with guidance by Amazon, competitor performance, and watching the macroeconomic conditions.

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Kroger's hunger for meal occasions accelerates QSR implications

Barry Thomas, Senior Thought Leader
Ross Cloyd, Director, Grocery Insights
27 July 2022

Supermarkets and food service brands are both co-operating and competing more than ever these days to capture more on-demand meals. With consumers’ more active lives and more eating occasions sourced online, traditional grocers and restaurants are seeking to capture more ready-to-eat meal occasions.

While food away from home declined during the peak of the pandemic, it has since rebounded and is forecasted to have a 45% share of total food and alcohol consumption by 2027, according to Kantar estimates.

As such, retailers are compelled to compete more effectively for meals away from home. At the same time, restaurants need to compete for meals at home to grow their businesses, which is spurring new types of meal kits and other offerings. Not surprisingly, January 2022 ShopperScape® data shows that shoppers are spending more on prepared foods from retailers than a year ago.

Kroger is one retailer with a potent strategy to grow its share of on-demand meals. The supermarket chain has vastly ramped up its prepared meals strategy with new partnerships and innovations that the industry is watching closely.

Kroger’s comprehensive meals strategy includes:

Private label meal options: Kroger purchased Home Chef to develop meal kits and continues to expand in this area with its owned-brand heat-and-eat meals.

Grocerants: Kroger is testing a variety of grocerant formats focused on localized partnerships, including ClusterTruck and Burns Bistro.

Dark kitchens: Kroger is partnering with Kitchen United in markets where it offers several local and national restaurant brand meals. Shoppers can bundle food from multiple brands into one pickup or delivery order.

Instacart meals: The supermarket has launched a new line of ready-made meals on Instacart’s Ready Meals Hub site. The affordable and nutritious meals offer Kroger shoppers several different cuisines, and they’re easier and quicker to get than restaurant takeout.

Plant-based options: Kroger has partnered with Impossible Foods through Home Chef to develop plant-based protein products. This new offer is on trend with the growing number flexitarians who opt for more plant-based meals.

B2B food service expansion: Kroger’s Dallas business unit now offers assortments and next-day delivery for restaurants in the Dallas-Fort Worth area. Kroger’s new Restaurant Supply service leverages the supermarket’s fresh assortments, value prices, and wider product availability to help restaurants that often struggle with out-of-stocks.

Kroger’s aggressive and innovative meals strategy will continue to evolve. Kroger is clearly driving fresh, new solutions for on-demand meals that can accelerate its growth as an elite and omnicentric meals provider.

QSR Response

Restaurants, and especially QSRs, are the target for grocers like Kroger that are looking to capture a greater share of meals. In response, QSR chains are stepping up their strategies to compete with supermarkets and other QSRs.

QSR chains are embracing five growth strategies in this more competitive context:

Drive-thru and pickup innovation: QSRs are adding drive-thru lanes and piloting mobile-only lanes to serve customers quicker. They are also building drive-thru-only and pickup-only locations to serve off-premises to-go occasions, their fastest-growth area. More QSR and fast-casual chains are also expanding their pickup areas, often with lockers, to provide for faster and safer pickups.

Special access for app users: QSRs are using their own digital platforms to build their digital audiences and compete more effectively with third-party delivery apps like Uber Eats and Grubhub. More QSRs and fast-casual chains offer app-only menu exclusives that help drive app downloads. Shake Shack has even created an exclusive curbside pickup lane just for customers who used the Shack app to order.

Omni ordering options: More QSR brands are making their brand omnipresent so consumers can order using their website, app, or third-party delivery apps. Panera, a pioneer in omnicentric branding, just partnered with Google Maps to create a seamless order strategy. Consumers can now order from Panera within Google Maps after searching for the brand’s location.

Retail expansion: Another off-premises path that restaurant brands are pursuing is moving into the retail channel and acting like FMCG brands. These days you can find many food service brands in your local supermarket aisles and freezers, including Chick-fil-A sauces, Panera soups, White Castle sliders, and California Pizza Kitchen pizza.

Healthier menus: Most QSR chains are making ongoing efforts to offer healthier menu items as more consumers seek better-for-you meals and foods with immunity-boosting qualities. More chains are also testing plant-based menu items to appeal to the growing number of flexitarians.

Kroger’s meals on-demand strategy targets restaurants, and especially QSRs, which must keep innovating to fend off Kroger and respond to new customer behaviors.

Its size and scale give Kroger a competitive advantage when it comes to logistics and delivery. In addition, Kroger can leverage its supplier relationships to keep prices low. QSRs face several challenges in the current market, including saturation, more competition from grocers, and health-conscious consumers.

In many ways, the real winner in this highly competitive and dynamic meals solution environment is the shopper. Shoppers have an abundant — and constantly growing — list of innovative on-demand meal options from Kroger, QSRs, and others. With all these choices, they don’t have to compromise on meal freshness, quality, selection, pricing, or speed.

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Date: Thursday, August 25, 2022

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The growth and innovations of farmers markets with learnings for the industry

Farmers markets: learnings for brands, retailers, and restaurants

Barry Thomas, Senior Thought Leader
7/22/2022

Farmers markets have exploded in popularity throughout the US. According to the USDA Farmers Market Directory, the number of markets grew from around 2,000 in 1994 to approximately 9,000 today.

The appeal for many shoppers is connecting directly with the farmers who grow and harvest the products they will consume. Farmers market shoppers know they can often find the freshest foods at a local farmers market rather than at a large supermarket chain. Shoppers also value knowing that the money they spend at a farmers market goes directly back into their communities.

Small farmers are no longer relegated to selling at neighborhood markets or roadside stands. Today, more family farmers are leveraging technology to reach new markets and shoppers and stay competitive despite being minor players. In addition, the pandemic has caused many farmers to adopt new tech stacks and online skills to sell their products.

Here are four ways farmers are innovating to access new markets and shoppers:

Retailer Farmers Marketplaces Online

Kroger’s Atlanta division recently launched Kroger Farmers Market, a digital platform offering a wide range of fresh, local products typically found at local farmers markets, but with the convenience of online ordering and delivery.
This partnership is powered by Market Wagon, which operates an online farmers marketplace intended for food producers to thrive in their local and regional markets.

Besides reinforcing the importance of buying local, the Kroger-farmer partnership is a win-win for farmers and the retailer alike. The Atlanta-area farmers who belong to the program get access to Kroger shoppers, while Kroger captures a new shopping occasion and channel.

Direct-to-Consumer Farmers Markets

Barn2Door is a platform that has emerged to support online farmer direct-to-consumer (DTC) sales.

Barn2Door grew out of the idea that farmers should profit more from the products they sell without a middleman taking a cut. The company provides software and digital services to help farmers grow and manage their businesses. Barn2Door powers the experience shoppers expect when purchasing from farmers online, including one-click access to orders anytime, anywhere across the web, social, mobile, and email. Farmers are responsible for fulfillment and delivery
.
DTC farm platforms like Barn2Door can provide learnings for FMCG firms and possibly new partnership opportunities for brands.

Mobile Farmers Markets

Mobile markets are unique because they deliver local fresh fruits and vegetables to underserved communities where options to purchase such food are limited or nonexistent. Many of these players accept government subsidy programs like SNAP.

Urban Growers Collective is one such farm. This Black- and woman-led nonprofit farm in Chicago is working to build a more just and equitable local food system. In addition to growing food, the nonprofit aims to cultivate environments that support health, healing, creativity, and economic development through urban agriculture.

The team cultivates 8 urban farms on 11 acres predominantly on Chicago’s South Side. While these farms are oriented around production, they also offer staff-led education, training, and leadership development opportunities.

Urban Growers Collective’s Fresh Moves bus runs five days a week and makes several stops for at least an hour at locations across the city's South and West sides.

Farmers Food Hubs

Many farmers are thinking about selling their products beyond their local neighborhoods and moving toward a regional sales strategy via food hubs.

Food hubs are firms that aggregate, store, process, advertise, and distribute farm products. Food hub examples include The Common Market, Farm Fresh Rhode Island, and Seal the Seasons, which all work with farmers in various US regions to distribute their products to local grocery stores.

Of course, working with food hubs and cooperatives reduces a farm’s profit margins. However, these distribution networks can help farmers build a deeper regional supply chain that can help develop their farm brand and provide more long-term financial stability.

Planting the Seeds
We should also overtly recognize that farmers markets provide essential opportunities and learnings for brand marketers, retailers, and restaurants.

Here are four ways farmers markets can help our industry.

A roadshow for growth: The popularity of farmers markets creates many avenues for new product exposure, awareness, and trial. Selling and experimenting with fresh products at these locations can help startup brands ignite.

Brand buzz and communities: As startup brands sell their products regularly at farmers markets, they build loyalty and communities to fuel sales as well as online audiences that can create a potent social media presence. Farmers markets can be perfect for helping new brands drive grassroots and person-to-person marketing connections.

Unique and high-value insights: Entrepreneurs and FMCG leaders can pick up new learnings from direct interactions with these markets and in-the-moment engagements between farmers and shoppers. Farmers markets provide authentic and unfiltered feedback on how fresh products should smell and taste.

Also, excellent learnings come from seeing how these local farmers present their product storefronts with often innovative packaging, pricing, and merchandising that you’ll never see at a supermarket. Yet, this creativity is what so many shoppers value at their local market.

Partnership potential: Larger grocers, restaurants, and farmers markets have an opportunity to partner to reach new audiences. Many shoppers would value seeing a supermarket or national restaurant chain support the local farmers market. Also, supermarket chains and restaurants could host a farmers market, giving those who might not be farmers market shoppers an incentive to stop by.

Farmers markets are undoubtedly innovating and growing. The markets can provide new insights, inspiration, and potential opportunities for FMCG brands, retailers, and restaurants.

Take time one weekend to visit one or two farmers markets in your area and see the compelling fresh vegetables, fruits, and other products on offer. Also be sure to notice the robust local ecosystem that many consumers prefer shopping, one that promotes the local economy, health and wellness, and bringing local people together.

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Date: Thursday, August 25, 2022

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Amazon private label news is likely misleading, implications arise for third-party future  

Celia Van Wickel, Senior Director, Digital Commerce
20 July 2022

Wall Street Journal wrote an article circulating about Amazon eliminating private label brands to help with anti-trust scrutiny. To me, the anti-trust scrutiny is simply an added outcome of what Amazon is aiming to do, which is private label rationalization. The word on the street is that Amazon is not alone in needing to offload inventory. They are likely too deep in private label brands and SKUs, having them reassesses the strategy and value of private label brands. It is noted that Amazon has at least 88 confirmed private brands, but some sources state there are 400 or more than 1000 Amazon private brands. They recently launched Amazon Aware, a new carbon neutral and climate-friendly pledge brand, also available at the new Style store.

 
“We continue to invest in this area, just as our many retail competitors have done for decades and continue to do today,” an Amazon spokesperson said.
 
I do believe Amazon will likely reduce private label SKUs and consolidate brands, but they will use them where they play a strategic role. Solimo, Happy Belly, Amazon Basics, and Amazon Essentials, I don’t believe in essence are going away. Amazon Basics currently is a standalone category selection on the top bar of the Amazon home page next to “Today’s Deals”. I do believe they are evaluating strategy as noted towards Target’s private label strategy.
 
In an article I posted yesterday from The Grocer, a comment noted an opportunity for Amazon to leverage Deliveroo for delivery from Fresh stores. Yesterday, Deliveroo expanded its partnership with Waitrose for its rapid delivery service Hop. This is an interesting thought. Amazon does have its own delivery for Amazon Fresh in the US, which includes stores. Amazon could trial incremental rapid delivery through a third-party, namely Deliveroo. Grubhub in the US could test third-party strategy, and perhaps rapid delivery, but that would have to be built. Many retailers continue to partner with third parties simply for the incremental reach and quick delivery, despite having their own operations.

US grocer Albertsons has a third-party diversification strategy for same-day and 30-minute delivery, partnering with DoorDash and Uber. The goal is to be accessible to shoppers wherever they choose to shop. However, while Amazon has a stake in Deliveroo and Grubhub companies, I think they would be more interested in owning these companies and leveraging the full retail partnership network. They could use them as a test (always Day 1) to evaluate rapid delivery operations. The UK may be a more open ground for Amazon to try a third-party, rapid delivery strategy.

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Date: Thursday, August 25, 2022

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How H-E-B beat Amazon for top spot in ecommerce grocery

Chris Miles, Analyst

Dunnhumby, a customer data science firm, recently ranked Texas-based grocer H-E-B as the No. 1 retailer for ecommerce grocery shopping.

In its inaugural Ecommerce Retail Preference Index (RPI), dunnhumby highlighted five primary drivers that influence where people prefer to shop online:

  • Operation of owned digital assets

  • Ease and reliability of service

  • Order substitution

  • Product quality

  • Pricing

Dunnhumby reported that H-E-B edged out Amazon as the best retailer for online grocery orders by focusing on these primary drivers and creating strong emotional ties to H-E-B’s online shopping tools.

2022_07_HEB_beats_Amz_ecomm_grocery_figure

Source: Business Wire

How did H-E-B get here?

Having launched curbside pickup in 2015, H-E-B steadily grew its omnichannel ecosystem and was fully prepared when COVID-19 accelerated the shift to online shopping.

In 2019, H-E-B launched its My H-E-B app with curbside and delivery services that built on its 2018 acquisition of delivery company Favor. Since then, H-E-B has continued to improve its ecommerce presence.

According to dunnhumby, approximately 40% of all shoppers are omnichannel shoppers. Of these omnichannel shoppers, 38% are between 25 and 54 with at least two children. Thus, ease and reliability of service rank higher with these shoppers who have busy lives and look to save time any way they can.

H-E-B has kept its app focused on making omnichannel shopping simple and easy. For instance, the app lets shoppers quickly add products to online baskets by scanning bar codes on their phones.

How Did Amazon Compare?

Amazon is currently expanding its ecommerce grocery market share, offering Prime members free delivery and in-store pickup options. Amazon ranked second in dunnhumby’s RPI primarily due to its ease and reliability. However, unlike traditional grocery retailers such as H-E-B, Amazon lacks an extensive network of brick-and-mortar stores to fulfill pickup orders. What’s more, Amazon’s limited selection of grocery SKUs means shoppers must spend more time visiting other stores to get everything they need.

H-E-B has proved that midsize, regional retailers can compete with global ecommerce giants like Amazon and large national grocers. How so? By meeting the unique needs of omnichannel shoppers with easy, time-saving online basket-building features and reliable delivery and curbside services. By catering to these needs with easy and reliable omnichannel tools and services, retailers can drive more online sales and create strong emotional ties that build shopper loyalty.

What’s Next?

The next competitive frontier for H-E-B is likely to be fulfillment membership/subscription programs. In 2023, more shoppers will shop based on loyalty, and retailers will want to retain the shoppers they gained during the pandemic as well as improve their online profitability.

Walmart and Kroger, ranked fourth and sixth, respectively, on dunnhumby’s RPI, have expanded their subscription capabilities. Walmart+ members can get free delivery on orders over USD35, while Kroger offers free next-day delivery to lower-tier members of its Boost program and free two-hour delivery for higher-tier members.

H-E-B is a great case study in how retailers can incentivize the use of online grocery to maintain and retain shoppers. As retailers look to capitalize on the rise in grocery ecommerce, they should study how H-E-B has created omnichannel solutions that focus on primary drivers for shopping online and that cater to the specific needs of the omnichannel shopper demographic.

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Kantar's PRIMED UP for Amazon Prime Day 2022

Celia Van Wickel, Senior Director, Digital Commerce

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Why Kroger is investing in a new aseptic dairy line

Chris Miles, Analyst

Kroger is investing $70 million to expand its Tamarack Farms Dairy facilities in Newark, Ohio, to accommodate a new line of aseptic dairy products, including half and half, coffee creamers, and heavy whipping creams with an extended shelf life.

The state-of-the-art facility utilizes ultra-high temperatures to pasteurize dairy products, a process that kills harmful bacteria and eliminates the need for refrigeration. Think of your favorite flavored Nesquik milk that sits on a shelf.

Serving nearly 160 stores in Ohio and West Virginia, as well as ecommerce orders, the Tamarack Farms Dairy expansion opens a new market for the dairy industry, one that reduces the cost to ship products in refrigerated units and reduces the amount of spoiled product that cannot be sold.

Kroger’s new line of dairy products comes during a year when the Ohio-based grocer has made significant strides to expand its Our Brands private label business. In Q1 2022, Kroger launched 279 new seasonal items, including fresh products, under its Our Brands label.

It is no surprise these strides have occurred at a time of double-digit inflation for products like milk whose prices are up nearly 15% since last year.

Given that aseptic dairy products require no refrigeration and have monthlong shelf lives, Kroger’s dairy innovation aims to offset rising prices, increase the number of dairy units sold, and decrease the number of units that perish.

Additionally, the lack of refrigeration needed to transport aseptic dairy products lets Kroger reduce the amount of gas used by inefficient refrigerated trucks, helping the grocer save on fuel costs that have risen about 66% since last year.

As the price of goods continues to rise, retailers should look to Kroger and its innovative product developments that reduce transportation costs and extend the shelf life of perishable products. We’ll be watching to see how Kroger expands these innovations to other perishable products, including fresh produce and meat.

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Walmart to launch augmented reality online and in store

Karen Kelso, VP, Mass and Club
27 June 2022

Walmart shoppers will soon be able to use augmented reality (AR) to visualize how furniture and home décor will fit into their existing spaces.

Beginning in early July, a new feature in the Walmart app will let shoppers “place” approximately 300 home items in their spaces by clicking the “View in your space” banner on AR-enabled items. The app will walk shoppers through placing an item, viewing item dimensions, and using a camera to see exactly how an item will look in the shoppers’ own environment (Figure 1).

 Figure 1. Walmart’s AR Functionality

2022_06_Kantar_Walmart_AR_Example

 

Source: Walmart corporate website

Walmart plans to expand the AR capabilities to dorm room furniture in the coming weeks. Initially the AR feature will be available only on iOS but Walmart plans to roll it out to Android and the mobile web.

AR for Personalized Customer Experiences

Walmart is adapting these AR capabilities to other parts of the stores. The AR app will allow shoppers to scan shelves and immediately identify items that meet specific parameters. For example, shoppers can easily find items that are gluten-free, kosher, or nut-free, or that meet other dietary requirements. They will also be able to set up specific filters, such as highlighting items on Rollback or that have instant redeemable coupons.

AR for Store Inventory Location and Management

For store associates, AR is mapping and tracking every case in the backroom (about 15,000 of them). Associates can scan product cartons on backroom risers to quickly identify which product is low or out on the shelves. Store associates won’t need to move, sort, and shift through boxes to find the product they’re looking to replenish. These AR features are currently in about 3,500 stores. Plans call for rolling them out to all stores over the summer.

AR is also a component of the Merchandising Movement Engine (MME) developed by Walmart Global Tech. The MME uses machine learning to aggregate data on product movement and predict inventory trends at the store level and throughout the chain, automatically determining when merchandise should be shipped to stores rather than waiting for a store to order.

Why Should You Care?

Walmart is moving toward personalization in its digital delivery programs, with significant implications for marketing and promotions.

The AR functionality will improve shoppers’ ability to assess whether and how specific items fit a purpose. For suppliers, it’s an opportunity to interact with shoppers at multiple points along the purchase funnel, from item consideration to point of purchase. What will the shopper need to know about your products to make a purchase decision? What are the key attributes that provide value and/or differentiation from its competitive set? What other item features are important to converting shoppers to purchasers?

Walmart is moving quickly toward automation, digitalization, and machine learning across operations and supply chain. From an inventory management standpoint, be sure you understand the algorithms Walmart is using to determine product reorder points. Visibility to when, where, and how often POs will be cut is necessary to successfully deliver product on time and in full. What factors influence these machine-learning orders? Are there seasonal or other disruptions in the ordering process that can be predicted? What will machine learning miss?

No system is foolproof and having a perspective on potential gaps in the system’s capabilities will help your business proactively manage your inventory position at Walmart.

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10 headlines from the 2022 Paytronix Order and Delivery Report

Barry Thomas, Senior Thought Leader
24 June 2022

If you’re looking to understand critical trends for restaurants and c-stores in the areas of sales, fulfillment, guest experience, and guest retention, Paytronix’s annual Order and Delivery Report is a good place to start. The report reviews industry trends from large multiunit restaurant brands, independent restaurants, and convenience stores.

Here are 10 learnings from this year’s report, titled “Navigating the Digital New Normal.”

1. Digital orders are now one-third of restaurant and c-store transactions.

Digital orders had risen to one-third of total restaurant and convenience store food orders as of March 2022, nearly triple the 12% pre-pandemic rate. The report also found that 55% of all digital orders were for takeout in March 2022, and that dine-in sales dropped 42% in January 2022 from January 2020.

2. Digital orders have remained elevated while in-store orders remain down.

While restaurant and c-store on-premises orders are resuming, they are still below pre-pandemic levels, with digital orders now far higher, as expected. The study looked at 25 restaurant and c-store brands that operated throughout the pandemic, which showed that in-store sales remained down 42% from their peak in January 2020, while digital orders were up 113% during the same time.

3. Takeout is more dominant than delivery when it comes to online orders.

The nature of digital orders has changed as well. While delivery was king before and during the height of the pandemic, more recent data indicates that takeout orders now dominate and are higher than they were before the pandemic. Takeout jumped from approximately 35% of online orders in January 2020 to a majority in March 2022.

4. Delivery customers remain significant, spending more per transaction.

While customers are pivoting more to takeout, delivery customers remain strategically important. Both takeout and delivery spending increased during the pandemic, and delivery transactions have remained approximately 13% higher than before the pandemic, helping restaurant and c-store profitability.

5. Delivery customers tip better and more often than takeout customers.

The report shows that for most of 2021, the average delivery tip was approximately 13%, more than double the takeout order tip. Also, 2021 takeout customers included a tip 37% of the time, while delivery customers tipped 73% of the time. These are two fundamental differences between the order types and customers.

6. Delivery customers are more loyal than takeout customers.

Approximately one-third of delivery orders are from customers who order multiple times a month. Takeout customers order more sporadically. The study found that delivery guests are more loyal and repeat orders from the places they enjoy.

7. Food, service, and value indicate whether customers will return.

The best indicators of whether customers return is if they receive outstanding food, service, and value. Customers who give 5-star reviews in these areas are the most likely to revisit, and the three categories correlate with the likelihood of returning almost precisely.

8. Coupons work to recover customers.

The study shows that the difference in lifetime spending after offering a coupon to a customer who left a 1-star review is $10.08. By executing a customer-recovery coupon strategy for online ordering, restaurants and c-stores can win back up to 13% of customers who left a 1-star review. Companies don’t want to see 1-star reviews for many reasons. Yet an intelligent coupon strategy and the right technology can give front-line managers more control. Managers armed with coupons can help turn negative reviews into profitable customers and experiences.

9. AI intelligent menu recommendations drive high check orders.

Paytronix has been working with Uno Pizzeria & Grill to offer AI-led intelligent menu recommendations versus human suggestions. Uno found that guests were twice as likely to accept AI-generated recommendations over human ones. These AI suggestion pilots have produced incremental sales lifts of 1% to 3% on average check transactions, helping increase each restaurant’s orders up to $150 each month.

10. AI-enabled smart menu designs produce potent results.

Data science continues to make its way into retail and restaurant chains, and this study included a use case on how AI is helping customers choose what to order with smart menu designs. The study included a multivariant menu test pilot with National Coney Island, which has an extensive menu. The new AI-designed menu led to improved results, with conversion rates up 3.5%, which translates into a sales lift of $300 per store per month.

The pandemic has fundamentally changed how restaurants and convenience stores engage and serve customers. Customer behaviors shifted swiftly to online ordering, establishing a new normal for off-premises channels. This study validates the impact and importance of digital orders and transactions to restaurants and c-stores.

Expect to see more restaurants and c-stores adapt to the customer experience of the future, which requires more digital-centric and data science capabilities for the enterprise, including the front-line staff.

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Walmart launches new home goods line with Miranda Lambert

Karen Kelso, VP, Mass and Club Channels
6/23/2022

Walmart announced last week that country music superstar Miranda Lambert would join the pantheon of successful, charming women (Paula Deen, Drew Barrymore, and Ree Drummond AKA “The Pioneer Woman”) bringing their signature style and aesthetic to Walmart customers.

“Wanda June Home” is a nod to the most influential women in Lambert’s life, her mother Wanda June and grandmother Wanda Louise. The line of home décor and entertaining essentials will be available only on Walmart.com, with product offers varying seasonally.

Our take: Miranda Lambert is an incredibly popular and highly talented singer-songwriter. Her unapologetic and cheeky take on Southern life will undoubtedly resonate with a large swath of Walmart shoppers. The product line offers colorful and coordinated designs to “help create a warm, comfortable, casual gathering place where everyone can feel at home,” which we could all use more of after two-plus years of the pandemic (Figure 1).

Figure 1. Wanda June Home by Miranda Lambert

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Source: Walmart corporate website

Unfortunately for Walmart and Lambert, the timing is poor and the kitchen is crowded. Due to COVID-19 demand swings, Walmart’s Q1 2022 overall inventory is up 30% from a year ago, with general merchandise (including home goods) accounting for a large portion of that inventory. Walmart and other retailers are facing a glut of merchandise even as more is in transit from China, making this a less-than-ideal time to launch new products. Walmart shoppers are also feeling the pinch from rising inflation and are less likely to feel compelled to buy discretionary, “nice-to-have” products.

And while we are huge fans of Lambert’s, the “Southwestern retro farm kitchen”-inspired line looks a lot like the line from The Pioneer Woman. Lack of brand differentiation is typically the kiss of death.

Will Lambert’s Wanda June line defy this fate? As Lambert sings in “Pushin’ Time”: “And they say only time can tell, you already know me well. If it has to end in tears, I hope it’s in sixty years.”

We’ll check back in a few years before then and let you know how Wanda June is tracking at Walmart.  

Interested in learning more about Walmart’s strategy to connect more deeply with existing and new shoppers? Join us June 28 and 29 at Kantar’s Walmart & Sam's Club Spring Virtual Event.

Want to keep the conversation going? Get in touch.

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Retail's newest micro-influencer stars: Store employees

Barry Thomas, Senior Thought Leader
17 June 2022

Retail store associates can be a potent part of the retail media network ecosystem to boost store and brand sales. Store associates, more than anyone, understand the shoppers walking into their stores every day and provide a measure of authenticity and trust.

Notably, while traditional social media influencers are still important, they generally do not connect with and help shoppers at a local level. Retail store associates often have actual authenticity instead of stylized studio selfies. They’re real people talking about actual products with real shoppers.

Not all store associates will embrace selling retail products as social influencers or livestreamers. Yet, some associates are naturally good at it, offering some fantastic possibilities for retailers, restaurants, and CPGs. Retail associates who do embrace social and digital media can expand their audience beyond the store and value proposition beyond their typical front-line retail duties.

Expect more retailers to embrace store associates as digital sellers, providing a real human face and local authentic touchpoint for retail sales. Some, but not all, front-line retail associates can engage digital audiences due to their product knowledge and communication skills. While these associates can become brilliant brand ambassadors for retailers and CPG brands, they need to be compensated fairly for the value for their sales results.

These associates must have stellar selling skills — it takes a certain kind of person to engage shoppers over video and social media — but as long as they believe in the brand and product, social media is a great platform.

Here are two retailers and one restaurant chain embracing store associates as brand ambassadors and digital sellers.

Tiffany Workers Take to Social Media

Tiffany is embracing employees as influencers to build digital and social audiences to sell its products.

A number of Tiffany employees have accounts on Instagram, WhatsApp, and Facebook where they post photos and videos of jewelry and other product categories. These workers, who are paid on commission, have become social media personalities to boost sales.

Many employees post pictures featuring the newest products, their personal views on the brands, and how they can help shoppers. Tiffany shoppers click over to that sales associate’s specific area on the Tiffany website. They can then schedule a consultation or styling discussion, ask for a product recommendation, or discuss another topic.

Tiffany, like other retailers, has supplied employees with tips on leveraging social media more effectively, given the rise in this trend.

Walmart Associates in the Spotlight

Walmart is also paving the way for a new generation of retail micro-influencers as it supports associates who promote the brand on social media as influencers.

Walmart has more than 500 employees enrolled in its Spotlight program, a new initiative helping associates engage digital audiences as micro-influencers. Walmart began piloting the Spotlight program last year, and the retailer wants to expand it to 1.5 million US associates in the years ahead. This seems like a natural move for Walmart to become the world’s most extensive associate-influencer program in the industry.

The Spotlight program is represented on Facebook, Instagram, and TikTok. The retailer has said that the program’s goal is to help humanize stores while providing authentic, genuine content of value to shoppers.

Walmart’s micro-influencers could potentially use Spotlight as a platform to promote products on social media and leverage the store as a content engine where associates go live to sell CPG brands via livestreams.

An open question is how Walmart will compensate its associate micro-influencers beyond their hourly rate as the Spotlight program progresses. The answer could set a new standard for many retailers.

Dunkin’ Employees Brew Content While They Work

Dunkin’ is also embracing the employee influencer space, and more restaurants are likely to follow its example.

Dunkin’ has worked with many famous TikTok influencers and is now encouraging its employees to create video content while they’re working and share it on their TikTok accounts. In this case, Dunkin’ gains exposure from the employees who create and post content while working in the restaurant.

Also, encouraging employees to be Dunkin’ social brand ambassadors can result in them making better food and drinks and selling more items. Since food content is one of the most consumed content categories on TikTok, restaurant brands have a tremendous opportunity to create a win-win social communication and selling context with restaurant associates.

New Front for Retail Employees

The era of front-line retail employees becoming meaningful content engines and sellers for retailers and restaurants is upon us.

Thinking of retail associates as part of a retail media network can provide many new ideas to drive engagement and meaning with store personnel while creating value for local shoppers, stores, restaurants, retailers, and CPG brands.

This new era of retail micro-influencers provides a powerful opportunity for CPG companies to lean in with their retail and restaurant partners to create a new strategic marketing playbook for the industry in collaboration with their front-line associates.

The question is which CPG firm will step up to lead this new type of marketing, working with retailers, restaurants, and store associates to create new marketing value across the industry.

Want to keep the conversation going? Get in touch.

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10 headlines from the 2022 National Restaurant Association Show

Barry Thomas, Senior Thought Leader
03 June 2022

This year’s National Restaurant Association Show provided a potent four-day learning opportunity for what we can expect to see more of in the restaurant industry this year and in the near future.

Here are our 10 headline topics from this year’s event.

1. Automation is accelerating across restaurants.

Robots for the back and front of the house were on full display. Server robots that take meals to tables can offset rising labor costs. Other robotic options can help cook food in back-of-the-house roles. A truly innovative example of drink innovation is Botrista Technology’s DrinkBot, which is an autopilot beverage station used with prepackaged ingredients to create teas, lattes, flavored lemonades, iced coffees, and more.

These robots indicate that many manual and repetitive restaurant activities are material opportunities for automation.

2. Flexitarians are driving plant momentum.

With US consumers, especially younger adults, eating more plant-based meals, flexitarianism is becoming more accepted across the restaurant industry. Many suppliers had plant-based chicken, sausage, and beef on center stage at the show. Other features included plant-based ice cream and animal-free dairy. The addressable market for plant-based foods and beverages is expanding for restaurants and supermarkets, especially as more consumers seek healthy, sustainable, and transparent meals.

3. Boba beverages are breaking through.

Boba drinks were another feature at the show, and we can expect to see more of them. Boba tea, which has been popular in Asia since the 1980s, has since gained enormous popularity in Australia, Europe, and the US, with boba drinks popping up at more restaurants.

Boba drinks offer a variety of colors, flavors, and textures, which are especially grabbing the attention of teens and young adults in the US. Del Taco, Dunkin', and Sonic already offer boba-type drinks. Expect more chains and retailers to follow suit with ready-to-drink (RTD) boba brands.

4. More off-premises occasions are driving RTD options.

Traditional fountain drinks are taking a backseat as takeout and delivery fuel restaurant sales. These occasions call for more RTD beverages instead of ice-diluted fountain beverages. In addition, consumers looking for alternatives to typical fountain beverages are embracing new RTD options like cold-brew coffees. Also, packaged RTD brands offer better quality and a more sanitary option than fountain drinks. Expect more food service operators to provide more RTD beverages to pair with guest meals.

5. Takeout and delivery spawn more packaging options.

Container options at the show were abundant, given the growth in off-premises occasions. Many package suppliers displayed tremendous innovations with packaging materials made from various sources. Many packaging options centered on biodegradable materials because more food service brands have meaningful sustainability goals and want to provide more environmentally friendly packaging.

6. Food lockers are on the scene.

The food locker industry is a crowded space, with many companies offering various solutions. The concept is straightforward. When a restaurant completes a food delivery/pickup order, it places the order in a locker to keep it safe and warm. The consumer or delivery person then arrives, scans a bar code to unlock the door, and takes out the food package. If you’re wary of delivering cold food or the wrong order, then you’ll appreciate the expansion of food lockers across the food service industry.

7. Restaurants are adopting to-go formats.

As off-premises occasions grow, so do physical format innovations to support these consumers. Indeed, a lot of products were on display for to-go meals like food lockers and new meal packaging. At the same time, casual dining brands like Applebee’s and Smokey Bones discussed how they’re installing new full-service drive-thrus and drive-up pickup windows to facilitate off-premises orders. More restaurants are adopting these physical formats now that less dining space is available inside restaurants as delivery and pickup orders accelerate.

8. QR codes continue full steam ahead.

QR codes were all over the show and the topic of many discussions at the event. Restaurant operators are high on QR codes because they save labor, eliminate the need for printed menus, and collect customer data.

Yet QR codes don't always work effectively, so food service brands need to test the codes before rolling them out nationally and conduct regular quality checks once the codes are executed. We can expect to see more widespread use of QR codes as the industry comes up with more innovative ways to apply them.

9. Restaurants expand ways to reduce inflation.

With food and labor costs rising, battling inflation was a central theme at the show. Increasing inflation has affected customers’ discretionary spending, leading to fewer restaurant visits, so restaurants are getting creative to solve this problem.

Solutions offered at the show to curb inflationary pressures included technology programs to streamline menu ingredients and IoT sensors on large restaurant kitchen equipment and even new napkin dispensers to help monitor and lower costs.

10. Data and advanced analytics are moving forward.

Data was a key feature across the supplier show areas with more restaurant operators highly interested in gathering data about their customers and staff to optimize operations and enhance the customer experience.

Many restaurant brands still use legacy technology built 10 to 15 years ago, which does not equip them to win in today's market. The show displayed many technologies from software, hardware, and the cloud to advanced analytics platforms that can help restaurant brands improve operations and the guest experience in real time. There’s no question that modern POS systems can help restaurants reduce costs and improve profits, so we’ll see more capital allocated to better strategies that can leverage data and analytics.

The National Restaurant Association Show is a truly iconic event for the industry but other retail channels should pay attention as well. The restaurant industry — and the learnings from this event — are often leading indicators of what will influence other retail channels and suppliers in the near future.

Want to keep the conversation going? Get in touch.

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Kroger’s Florida entry heats up home delivery battle with Publix

Ross Cloyd, Director
26 May 2022


Kroger has officially entered Florida but not in the traditional way by opening brick-and-mortar stores. Instead, Kroger is implementing a home delivery service — and taking on Publix and Walmart in the bargain.

Kroger is betting on its customer fulfillment center partnership with Ocado to grab market share from Publix and Walmart, the market share leaders in Florida at 37% and 26%, respectively, according to IRI.

In 2021, Kroger opened a $55 million customer fulfillment center in Groveland, Fla., about 30 miles west of Orlando. The Groveland customer fulfillment center is a centralized hub that services shoppers within a 90-mile radius. Smaller fulfillment facilities, which Kroger refers to as spoke facilities, are in Tampa and Jacksonville. Kroger’s third spoke location opened in South Florida two weeks ago.

With its 37% market share are stake, Publix announced a partnership with Instacart to optimize ecommerce fulfillment and fend off Kroger’s competitive threat. Instacart’s micro-fulfillment warehouse will bring thousands of Publix items to South Florida. Publix shoppers will be able to order a wide assortment of products and have their orders delivered in as little as 15 minutes (Figure 1).

Figure 1. Ad for New Publix-Instacart Home Delivery Service in South Florida

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Source: Instacart

Publix also plans to launch an Instacart partnership in Atlanta, where Kroger launched a customer fulfillment center hub in February 2022.

Kroger’s nontraditional Florida entry and Publix’s lofty 15-minute delivery goal will be interesting to monitor over the coming months. As shoppers grow accustomed to 15-minute home delivery, retailers will be even more challenged to accelerate their ecommerce fulfillment, and suppliers will need to ensure product is available and delivered to the retailers on time.

Want to keep the conversation going? Get in touch.

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C3's recipe for omni restaurant innovation

Barry Thomas, Senior Retail Consultant
20 May 2022

C3, or Creating Culinary Communities, claims to be the fastest-growing food tech platform today. It may also be one of the most innovative restaurant industry companies going, yet one you’ve probably never heard of.


Founded in 2019, the firm is led by entrepreneur Sam Nazarian who is also the founder and CEO of SBE, a Los Angeles-based luxury hospitality, real estate development, and lifestyle company that includes hotel, restaurant, nightlife, and real estate divisions.

Nazarian and his C3 leadership team are completely rethinking the restaurant industry by creating a first-of-its-kind omni restaurant ecosystem. This ecosystem brings together brilliant culinary talent, modern digital food service brands, contemporary brand marketing, advanced analytics, and physical restaurants. Also in the mix are C3’s portfolio of 40-plus culinary brands, C3-owned and partner virtual kitchens, and mobile delivery.

C3’s partner restaurants act as virtual kitchens cooking up food for delivery from C3 brands like Umami Burger, Kumi, Krispy Rice, and Morimoto’s Sa’Moto; lunch from Dani García’s El Pollo Verde; and breakfast and dinner food service brands. Other company brands target specific cohorts like millennials and Gen Z.

C3’s commitment to brick-and-mortar restaurants separates it from rivals like Nextbite and Virtual Dining Concepts. C3 focuses on licensing its brands as add-ons to existing food service operators while also building and operating restaurants. C3’s physical food service footprint includes two Citizens food halls (in Manhattan and Miami). Moreover, it’ is planning new physical locations for some of its restaurant brands like EllaMia bakery, which has 40 outlets in development.

Menu of Innovation
The C3 restaurant ecosystem is innovating in many ways the restaurant industry has never seen before. Here are some of them:

  • It’s building new modern-day physical restaurant brands while also licensing restaurant brands to food service operators whose kitchens have excess capacity. C3 restaurant partners often have available kitchen capacity of 50% that partner restaurants can use to generate new revenue.
  • C3 can put up to 15 brands into one kitchen, leveraging its advanced data and culinary insights to determine the right brand for the right restaurant outlet.
  • The company focuses heavily on partner training to ensure its brands are easy to execute regardless of the city or kitchen size.
  • The company doesn’t consider itself a virtual kitchen firm but a brand-centric company with technology as a core competency.
  • The company plans to be in urban malls and tier-two and tier-three cities to capture growth beyond city centers.
  • Its virtual kitchen partnership includes food halls, colleges, hotels, workplaces, and restaurants.
  • The culinary brands are primarily high-quality fast-casual and QSR-type cuisines.
  • To ensure the company understands and connects to Gen Z, the company is located in 45 college towns in the US, which provides tremendous insight, marketing, and culinary learnings that can benefit the entire C3 brand ecosystem.
  • The company partners with famous gamers, YouTubers, and celebrities to drive brand equity and traffic for its various restaurant brands via its content creators and influencer strategy.
  • A critical asset unique to C3 is its Go By Citizens mobile app, where customers can order from more than a dozen of its brands in a single transaction with no delivery fee The app is now available in San Francisco; Los Angeles; Austin, Texas; Portland, Ore; and New York. Other cities are on the way.
  • C3 is partnering with virtual restaurant provider Reef to open 800 virtual kitchens across the US that will serve as production hubs for an assortment of C3 brands.
  • The company continues to sign top chefs and restaurant industry executives. For example, Pasha Mehran, Uber Eats’ former head of virtual kitchens, recently joined C3 as chief strategy officer.
Outlook and Implications

C3 currently has more than 3,500 US employees and plans to hire another 5,000 domestically and internationally. The company is on a rapid expansion push, with plans to reach 12,000 virtual kitchens and physical locations by 2023.

The C3 omni restaurant ecosystem is clearly one of the most innovative in the industry and should be on the radar of food and beverage consumer brands.

FMCGs could see many benefits from partnering with C3 especially given the culinary, digital, marketing, data, virtual branding, and restaurant outlet access it can provide.

At the same time, C3 could be a strategic partnership opportunity for supermarkets looking for new culinary brands and innovations to help them capture more on-demand meal occasions.

Want to keep the conversation going? Get in touch.

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Is private label missing an opportunity?

Renata de Moura, Senior Director, Shopper and Category Insights
18 May 2022

With soaring inflation rates and supply chain issues, brand and retailer loyalty is taking a hit. Shoppers are trading down, switching brands and retailers, and doing what they can to manage their lists when they encounter stock-outs and minimize the impact of rising prices. Now, more than in previous years, shoppers are feeling the need to purchase other brands, and private brands have a chance to increase their share.  

But are private labels missing this chance? Private labels are experiencing dollar sales gains, but unit sales across categories are declining. Kantar ShopperScape® data indicates that 28% of shoppers concerned with inflation are choosing private labels instead of name brands. While this number is significant, there is a strong likelihood it will grow as inflation continues.  The perception of lower quality remains a barrier even as shoppers are demanding more affordable options.   

Enhanced private brand innovation, with healthier/organic and sustainable offerings, helps not only to create differentiation, but is also an entry point for shoppers who already share these values but are looking for more affordable alternatives.  

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Excerpted from: Kantar ShopperScape Untap the potential of private labels May 2022

ShopperScape® is your direct connection to the shopper, tracking monthly shopper behavior and attitudes with 3,000 shoppers, across 115 retailers and over 30 product categories. We help you understand where shoppers shop, what matters to shoppers, and emerging and timely shopper trends.  To learn more contact kantarshopper@kantar.com.  

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What's in store for Instacart's long-term health?

Celia Van Wickel, Senior Director, Digital Commerce
16 May 2022

I have had a couple of people ask me my opinion of Instacart’s health. While I enjoy Instacart as a shopper, I tell people that the company is at a tipping point and that many factors threaten its long-term health.

Losing Kroger Would Be a Big Loss

According to 1010 Data, five retailers make up 50% of Instacart’s sales: Publix, Aldi, Costco, Wegmans, and Kroger.

Publix and Aldi have strong relationships with Instacart. Publix will test almost anything with Instacart, including nano-fulfillment centers dressed as simple dark stores with Instacart’s simple picking software. There is no visible sophisticated AI software or automation that makes these unique.

Costco has no desire to build its grocery delivery right now, and I don’t see Wegmans as much of a threat.

The one that is a threat to Instacart is Kroger with over 3,000 stores across banners.
Losing a major retailer is not a new threat for Instacart. In late 2018, it lost Whole Foods, which was its largest retailer. The difference then was that Instacart was in growth mode, gaining more partnerships that quickly turned the lost sales around. It would not be in the same boat this time.

Kroger is building its capabilities so that it can cut the Instacart cord one day. Instacart saved its Kroger relationship with 30-minute delivery. To keep it, Instacart would have to stay one step ahead. This is likely the reason for the battle in Miami with Publix where Kroger will start 30-minute delivery in South Florida. With Kroger’s ambitions but still building its network, Instacart has maybe a year to find new plans.

Kroger is still leaning on Instacart in Ocado CFC delivery zones to fill time slots since the CFC needs to span a 90-mile radius. Customer service (more white glove) is a major focus of its owned delivery, which is the priority over speed at the moment. Kroger’s spokes initiatives should close the radius and time-slot gaps, but the retailer may need a third party to deliver and close the last mile. Walmart still needs a third party.

Instacart’s Acquired Assets Are Not Retail Leaders

Instacart has made some acquisitions aimed to reposition itself, but the companies it acquired are not leaders in the retail market.

Both Kroger and Albertsons are using Vevee for smart carts. Caper is not making its way to retailers but trying to compete with AiFi and Amazon’s Just Walk Out. Caper made it to Fenway Park, but it cannot play ball with Just Walk Out.

At the end of last year, I wrote how Instacart needed to gain dark warehouses and become a player in rapid grocery delivery immediately. Instacart must turn to its Micro-fulfillment as a Solution. I noted that Instacart needed to acquire a couple of players in micro fulfillment to build an ecosystem offering. It has not used its Fabric relationship or looked to build an ecosystem offering for its nano fulfillment.

I also noted that if Instacart goes the dark store route, it should offer its own grocery, which seems intuitive, but one thing it’s not doing is creating a true store marketplace. Orders are still siloed by retailer rather than aggregated so that shoppers can get all their needs met across Publix, Sephora, Petco, and Costco in one online basket. I noted stand-alone MFCs are key there. I thought it could build dark store micro fulfillment for retailers to expand its entry into other markets, creating digital-only offerings similar to what Kroger is doing with Ocado in Florida.

The IPO May Be PR Buzz With Looming Effects

While I’m eager to see Instacart roll out new services, which seems likely in light of some visible reaction from employees, the timing of its IPO filing is quite odd given that tech stocks are tanking.

Instacart connected the IPO filing to its 10th anniversary. Was this simple PR buzz? Because the IPO was filed confidentially, Instacart might not end up going ahead with it and doesn’t want the competition knowing its exact plans. It’s also unsure if its cutdown valuation is low enough given the current market and its overdependent retailer network.

Given this climate, replicable model, and nonleader assets, it is unclear if companies will risk the acquisition. Talks with DoorDash and Uber failed. Both Walmart and Amazon are already offering delivery services to other retailers and getting bites.

Watch Consumer Engagement

I suggest watching consumer demand for Instacart. The retailer recently reported softening sales but that’s not unique. Few retailers last year saw stellar digital growth and did not see digital sales boom in Q1 of this year either, although more will be known when Walmart, Target, and Kroger report their Q1 2022 earnings.

I also want to watch Instacart Express subscriber rates. Instacart is still a top platform in online grocery. Instacart is aiming for Canada to offset US losses. If it loses Kroger, it may fall fast. If DoorDash moves faster on retail partnerships, that will accelerate the burn.
Will all these factors be the ones to push Instacart over the cliff?

Want to keep the conversation going? Get in touch.

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Walmart doubles down on easing pain at the pump

Karen Kelso, Vice President, Mass and Club
13 May 2022

Just in time for the summer travel season, Walmart+ announced that it is doubling its members-only fuel discount from 5 cents per gallon to 10 cents per gallon.

Along with the lower price, an additional 12,000 participating Exxon and Mobil gas stations will also honor the discount. The expansion brings the total number of available fuel stations to 14,000, including 500 Sam’s Club locations and 2,000 Walmart and Murphy’s Oil filling stations.

As the average national price of a gallon of gas hit a record high of $4.37 this week, Walmart recognizes the outsize impact of lower fuel prices on families. “Ninety-one percent of our customers are aware of the increased prices at the pump and nearly half of those told us they are changing behaviors because of them,” said Chris Cracchiolo, senior vice president & general manager of Walmart+.

The newest fuel discounts reflect Walmart’s commitment to strengthening the benefits of Walmart+ membership to build long-term customer loyalty. It also signals that Walmart is willing to invest in sustaining its low-price leadership position while reinforcing its flywheel strategy, particularly its “lower cost” and “customer and member value” segments.

Want to keep the conversation going? Get in touch.

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Top 10 learnings from annual NACDS meetings

By: Rachel Dalton, Head of Retail Insights, and Barry Thomas, Senior Thought Leader

29 April, 2022

 We just spent nearly a week in Palm Beach, Fla., attending the National Association of Chain Drug Stores (NACDS) annual meeting where attendees were enormously excited to reconnect live at the nation’s most important drug chain event.

Throughout the week it was clear how important retail pharmacies are to consumers and the healthcare system. We heard many times how the retail pharmacy is the most accessible segment of healthcare in the country. The nation’s pharmacists and their teams played a vital role during the pandemic in helping to vaccinate people in record time, for which we are all grateful.

Yet enormous challenges hang over the country’s overall healthcare system, which could see incredible change as new solutions and entrants emerge. Regardless, NACDS plays a strategic role and is a powerful catalyst for healthcare transformation.

We’ve captured the top 10 learnings from the event from talking directly to CPGs, retailers, and other industry attendees and from attending the conference sessions.

  1.  America’s healthcare system needs reinvention across critical areas and will see continued disruption.
    • We spend $4 trillion on healthcare, approximately 50% more per person than other nations, with lower outcomes.
    • Prescription drug prices are far too high so they can provide profit margins for many stakeholders.
    • More disrupters like Mark Cuban Cost Plus Drugs, Amazon, and digital pharmacies are moving into prescription drugs to provide consumers with access to lower-priced drugs.
    • Many we spoke with said that holding the NACDS meeting at the opulent Breakers resort in Palm Beach conveyed the wrong optics, especially to the millions of consumers who can’t afford their drugs.
    • The “pandemic era” will expose more of America’s healthcare issues. “America’s healthcare system is a mystery in many ways and lacks transparency,” said Dr. Sanjay Gupta, one of the conference speakers. He added that, at the same time, “the pace of medical innovation has accelerated,” which is goods news for everyone.
  1. The future of the pharmacist and the Rx industry is changing rapidly.
    • Traditional retail pharmacies will see lower margins as intense competition increases across the industry.
    • The majority of retail pharmacy sales are low-margin generic scripts, more of which are entering the market.
    • Over the next five years, high-margin specialty pharmacies will account for approximately 50% of total prescription sales. Some retail pharmacy brands are moving toward this growth opportunity.
    • More automation is surfacing to fill scripts, and centralized script dispensing fulfillment centers will increase.
    • Pharmacy labor in retail stores remains a considerable challenge.
  1. Drugstore chains are reallocating working capital and talent to grow yet are behind where consumers are.
    • Consumers are moving faster than drug chains can move capital to growth opportunities. Pace and agility create both pain points and opportunities for suppliers and the chains. Agility in this industry is a clear differentiator.
    • Most chains are investing in elevating front-end execution and experience with digital and physical solutions.
    • Expanding digital reach and a more personalized experience is a shared priority.
    • Chains are optimizing assortments with more private label brands, healthy ranges, and exclusives.
    • Chains are transforming their merchandising strategy with better predictive insights and supplier collaborations.
    • Investing more in the digital shelf and buy online, pick up in store (BOPIS) is a top initiative across most chains.
    • Chains are expected to expand further with retail media and marketplaces.
    • These changes require investments in tech, change management, supply chain, people, and more.
  1. Inflation came up in every meeting.
    • Inflation is an area of uncertainty for many in the industry.
    • Both retailers and CPGs are interested in solving for price increases and managing through inflation.
    • Many brands asked how they can grow margin and share while not raising their retail prices too much.
    • Retailers especially are concerned about “shrink-flation” and understanding the best price points for categories.
  1. The idea of the growing “homebody” economy resonated with many CPGs and retailers.
    • The fastest growth channel in this country is the home.
    • Most agreed that their companies embrace work from home, and it’s something most of us are doing.
    • More CPG occasions are taking place at home, so brand, marketing, and commercial plans must be adjusted accordingly.
    • Some brands are moving fast and seeing success by rethinking impulse occasions. Some leading CPGs are treating the home refrigerator and pantry as a convenience store with compelling use cases and growth outcomes.
    • Attendees were in considerable agreement on how telehealth will continue and how healthcare equals home care. 
  1. Ecommerce remains a drug channel priority, and many CPGs are making bigger investments in the digital shelf.
    • Ecommerce remains nascent in the drug channel, yet brands expect more growth with drugstore chains.
    • CPGs want to create differentiation with their digital shelf and are interested in tools and learnings.
    • Going bigger on digital ecommerce is as important as BOPIS. How can suppliers help deliver a better shopper experience and drive transaction size (plus one and/or impulse sales)?
  1. Smaller and micro HBA brands are experiencing robust growth and driving disproportionate growth for drug chain categories.
    • Several challenger brands are outpacing legacy brand growth with more inclusive and humanized marketing and innovating much faster than traditional billion-dollar legacy brands.
    • These small firms and micro brands are lean, move fast, and have other advantages that will help them proliferate.
    • More retailers are working with smaller HBA firms to create private label and exclusive brands.
  1. CPGs acknowledge that they need a barbell strategy to capture channel growth at the high and low end.
    • Most firms agreed that they need to capture growth with ecommerce/clubs and discount/dollar stores.
    • Yet balancing these spectrums is a gap, and many brands are struggling with how to grow with discount/dollar stores.
    • CPGs are looking for brand, revenue growth management, pricing, and channel management innovations to solve this dilemma.
  1. CPGs are focused on their current plans while also thinking about the future of commerce.
    • Retailers expect brands to deliver on plans for this year, yet they need a clear point of view on the future of commerce.
    • Most retailers are going through a dual transformation centered on today’s plans while also looking to 2030 and how they can future-proof their enterprises.
    • Suppliers that can deliver today and bring thought leadership on the future of their category and commerce are poised to win more.
  1. Drug chains want suppliers to be even more proactive about proposing new growth solutions.
    • Chains are directing suppliers to share their best insights and recommended products to improve consumers’ lives.
    • Support retailers by connecting with their consumers, participating in their loyalty programs, and driving more product innovation.
    • These customers want suppliers to bring new growth opportunities to drive store traffic, digital traffic, and category growth. Suppliers that can offer a bold category vision supported by aggressive category innovation ideas are in position to capture more value.
    • Suppliers must bring better ecommerce metrics and a vastly improved digital shelf (e.g., copy, creative, user-generated content, digital assets, video, etc.).

As we emerge from the pandemic, many drug chains are riding real momentum from the surge in traffic and sales over the past two years. Moreover, most drug chains learned many lessons from the pandemic and greatly accelerated their capabilities during this time.

However, consumers still seem ahead of the industry, and the winning retailers will be the ones that quickly reallocate capital and talent to growth areas, such as digital and a more convenient, contemporary drugstore experience.

Both NACDS and suppliers can play a pivotal role by permanently redefining how to better serve retail drugstore customers. One key to success for everyone will be moving urgently to make the needed changes.

Download our complimentary NACDS Guide

Taylre Stumpf

Rising commodity prices pose increased threat for retailers

Taylre Stumpf, Analyst, Retail Insights
22 April 2022

Global conflicts are having an immediate and dramatic effect on commodity prices. In the upcoming months, shoppers will see their favorite products at significantly higher prices. What does this trend mean for retailers and shoppers?

Download your complimentary infographic to find out three commodities to watch.

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Five opportunities for significant drugstore chain growth

Barry Thomas, Senior Thought Leader
21 April 2022

The pandemic has brought massive changes to the pharmacy industry and drugstore chains. Year 3 of the pandemic has surfaced new obstacles and uncertainties that have only added to drugstore chains’ existing challenges.

Yet the pandemic demonstrated the resiliency of the industry, pharmacists, and their staff. Witness the approximately 200 million COVID-19 vaccines administered by pharmacies in the Federal Retail Pharmacy Partnership program. Clearly, drugstore chains and their pharmacy teams have demonstrated that they are an effective and lifesaving force.

However, drug chains will continue to experience challenges on many fronts, including shopper concerns about prescription costs and health insurance complexities that seem to grow more each year. Moreover, drugstore chain shoppers increasingly demand that the pharmacy and in-store shopping experience mirror their other retail experiences, which are omnichannel and convenient.

With the pandemic stabilizing, chains like CVS, Walgreens, and others will have to carve out a new position to convince shoppers to visit their stores. We know that more chain drug shoppers are turning to online pharmacies like Amazon or telehealth startups like Hims to have prescriptions delivered directly to the fastest-growing channel in the world — the home.

For that reason, traditional drugstore shoppers may make fewer trips to local drugstores, which would also mean shoppers are less likely to buy essential household goods from these stores since they can often get better deals at Amazon, Target, and other retailers. As such, drugstore chains will have to make material shifts in strategy to remain viable and competitive in the years ahead.

Here are five opportunities that drugstores and their supplier partners should experiment with to drive more growth and relevance with shoppers.

In-Store Experience

A trip to a local chain drugstore is often like visiting a typical convenience store in the 1980s, which (as some of us remember) was not a best-in-class experience.

Since then, Wawa, RaceTrac, QuikTrip, and other c-store chains have reinvented their stores to provide a better experience. These retailers and others are capturing more breakfast occasions with quality coffee and offering variety and fresh meals for all dayparts, including new assortments of produce and healthy snacks.

While front-end sales for a typical drug chain may represent only 25% of total sales, the in-store shopping experience represents nearly 100% of the store’s image, which is problematic. Disciplined capital investment into store remodels to improve the experience can help draw shoppers back to drug chains, which would have the added upside of boosting the back-end pharmacy business as well.

Drive-Thrus

Drug chains have an enormous asset in their convenient store locations. However, many drugstores have another possible asset — their drive-thrus — that seem severely underutilized.

As we saw with the restaurant industry over the past two years, QSRs thrived during the pandemic on the strength of their drive-thrus, which allowed for safer and more convenient transactions.

Drug chains should follow the QSR drive-thru playbook to modernize and fully leverage this capability to drive more retail category transactions and make the drugstore more convenient for shoppers. Vastly improved drive-thrus could serve as a moat for the chain that figures this out first.

Meal Occasions

More shoppers are looking for on-demand meals for key dayparts like lunch and dinner, and drugstores can help meet that need. Shoppers visit drugstores to pick up prescriptions, OTC brands, and healthcare products daily, so why not provide them with easy solutions for breakfast, lunch, dinner, and snacks while they’re there?

Progressive drug chains could partner with meal-kit providers, FMCG companies, and others to build more fresh meals and healthy solutions for busy shoppers. Chains that modernize their drive-thrus and expand their contemporary meal offerings would give shoppers another reason to visit their stores. Even if a chain targeted just one daypart and meal occasion in a pilot, this seems like a plausible growth opportunity to test.

Ecommerce

The growing ecommerce sales of both pharmaceutical and healthcare products are expected to continue as more shoppers migrate online. Yet, drugstores’ single-digit ecommerce penetration is much lower than that of other industries.

Given the proximity advantage of drugstores, combined with the growth of click-and-collect and the drive-thru potential, this channel’s vast physical store assets remain underutilized for ecommerce growth.

Furthermore, other drug chains like Superdrug in the UK are launching ecommerce marketplaces to capture long-tail SKUs and provide health technology wearables and premium beauty assortments. It would seem that shoppers, who are more omni-centric than ever, would welcome drug chains making a more decisive shift to ecommerce.

Obesity

Drugstores have a strategic opportunity to play a bigger role in one of America’s biggest health problems: obesity.

According to the Centers for Disease Control, approximately 40% of adults are considered obese in this country. Moreover, more Americans are worried about the pounds they gained during the pandemic, and nearly 2 in 3 US adults plan to change their diet this year to lose weight, according to a new Harris Poll Health Day survey.

The good news is that CVS has a MinuteClinic Weight Loss Program designed to help shoppers with this problem. Other chains should launch similar programs and market them aggressively to play a more visible leadership role in an area more shoppers are struggling with today.

Ultimately, the chain drug sector is facing many structural changes while still dealing with the effects of the pandemic. Yet, as always, crisis brings opportunities, and drug chains have the opportunity to reallocate capital and talent to these five areas with more test-and-learn initiatives. These growth vectors include the pharmacy and retail front store that establish the image for so much of the entire drugstore shopper journey.

We see many reasons to be bullish about this channel and the greater role drugstores can play in shoppers’ lives. Now is the time for more test-and-learn drug chain initiatives that we can all help support.

Download our complimentary NACDS Success Guide

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Record retail inflation expected in 2022

Doug Hermanson, Principal Economist
21 April 2022

Kantar’s annual macroeconomic retail forecast projects record inflation in 2022, even doubling up on 2021’s high inflation. Continued supply chain disruptions and a big step up in commodity prices will pressure retailers and suppliers even more this year than last year to raise prices.

 

There was a glimmer of hope early in 2022 that the global and domestic supply chain was finding some breathing room after it was completely overwhelmed in the fall of 2021 by high demand that had persisted since spring 2020.

 

That hope is mostly gone given the recent COVID lockdown in China and ongoing signs that ports and truck drivers can’t keep up with the amount of goods needed. These disruptions will not only snarl supplies of summer products but will also likely keep the system out of sync and struggling through the holiday.

 

Additionally, the cost of producing and transporting retail goods will go from bad to worse in 2022. The war in Ukraine has exacerbated already high energy and agriculture commodity prices. Higher commodity prices will affect consumers directly at the pump and eventually in the grocery aisle. They’ll feel the pain indirectly once businesses pass along some of these higher costs to shoppers in the second half of 2022 and 2023.

 

Amazon is one example of how this dynamic is trickling down to consumers when it announced that it will increase fees on third-party online sellers whose orders it fulfills. Traditional suppliers and retailers will also face higher delivery fees that they will at least partially pass on to consumers in the form of higher prices.

 

The higher wages many consumers are earning are a mixed bag for the inflation outlook. They may help consumers absorb some price increases but will also stoke inflation as businesses look to recoup some of the money they’ve doled out to employees by raising prices.

 

Even with higher wages and some inflation adjustments to government programs such as Social Security, less government support in 2022 will cause more shoppers to struggle with affordability and pull back on discretionary spending.

 

The baseline inflation outlook calls for prices to level off in 2023 and then start to decrease in 2024 for an unwelcome reason — an eventual decrease in consumer demand. Higher interest rates and prices outpacing recent wage increases will cool the economy in 2023 and 2024.

 

A prolonged period of high inflation or “stagflation” is unlikely, unless monetary policy is more passive than expected or a continued string of unpredictable and unprecedented global events occurs. Both were large parts of the inflation crisis in the 1970s and likely contributed to a vicious cycle of self-fulfilling inflation expectations from consumers and businesses.

 

Kantar Retail IQ clients can view all the retail sales, inflation, and demand forecasts on the macro data page.

 

Inflation Forecasts

The current forecast projects retail inflation in 2022 to reach 5.5%, widely outpacing inflation in any year since the government began tracking retail in 1992.

 

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Exceptional inflation will be broad based, led by home goods retailers that are being most squeezed from supply chain woes. Still, apparel and consumables retailers will also struggle to keep inventories at healthy levels in 2022, which will trigger prices increases and out-of-stocks.

 

Food and some durable goods retailers, such as appliance retailers, will raise prices due to higher commodity prices by the end of 2022 and into 2023.

 

The expected decline in demand in most retail channels will eventually put a cap on price increases in most goods by early 2023 both by giving the supply chain more breathing room and pressuring retailers to invest in prices to attract or keep shopper loyalty.

 

For more information, please contact:

 

Doug Hermanson, Principal Economist
doug.hermanson@kantar.com

 

Want to keep the conversation going? Get in touch.

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Many shoppers looking to cut back on streaming services

Julie Craig, Vice President, Shopper Insights
20 April 2022

On April 19, Netflix reported its first ever loss in subscriptions and hinted at a crackdown on password sharing. This drop reflects how shoppers have been assessing the number and value of the streaming and subscription plans they currently have.

Download your complimentary infographic to learn more.

Download your complimentary infographic.

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B2E is expanding across industries, including supermarkets

Barry Thomas, Senior Thought Leader
8 April 2022

More retailers and CPG brands are moving to a B2E (business to everyone) approach to reach new markets and increase sales. Typically, B2B and B2C models have been separate with well-established differences between the two. Yet, given the rise of new tech stacks and digital transformation sped up by the pandemic, the boundary between B2B and B2C is disappearing.

For example, more native direct-to-consumer (DTC) brands like Allbirds, Bark, and Caraway are moving to B2B to expand their brand reach while capturing more profitable sales from larger wholesale order sizes. Therefore, the number of pure DTC brands is dwindling given the profitability challenges arising from higher digital marketing costs and slower sales growth.

At the same time, established B2C retail grocers are expanding into the B2B sector to expand their brand and sales. As we all know, the grocery channel is a low-margin business. B2C grocers incur higher costs due to ecommerce growth with profit margins under pressure. B2C retailers can use their online operations to secure incremental revenue with the wholesale vertical. As such, a growing number of supermarkets are moving into the B2B space.

Woolworths in Australia expanded into the B2B sector in 2020 when it offered business customers a new solution for everyday supplies. Woolworths provides 10,000 products, plus easy reordering shopping lists, online and live phone support, and a nationwide delivery network with multiple delivery choices. The retailer has a dedicated B2B site to capture new sales from restaurants, cafés, hotels, gas stations, c-stores, hospitals, and schools.

Kroger announced this week that it is launching a restaurant supply business offering next-day delivery to companies in the Dallas area. The new Kroger Restaurant Supply B2B brand offers competitive wholesale pricing by the case to restaurants seven days a week. Many small independent restaurants will welcome this new offer as another way to cope with the supply chain challenges most operators face. Kroger will fulfill orders from its stores and provide free next-day delivery on orders of $250 or more.

Many supermarkets like Woolworths and Kroger have built sophisticated ecommerce sites, fulfillment networks, and digital capabilities, so grocers are looking for new ways to boost demand by leveraging existing capital and digital infrastructure.

While supermarkets moving into the B2B vertical is a logical step for the industry, the move presents new challenges for CPG firms. Many supermarket suppliers are concerned that they could miss out on higher margins from their existing wholesale customers who will lose business to Kroger, for example. Many suppliers will need to review, adjust, and develop new trading terms now that B2C grocers are moving into the wholesale business.

For their part, supermarkets expanding into B2B would be wise to hold proactive discussions with their trading partners to ensure this new channel expansion provides value for new wholesale customers along with its supplier base.

Ultimately, B2E presents new growth and challenges for supermarkets and CPGs, adding an increasingly dynamic and exciting context for the industry.

Want to keep the conversation going? Get in touch.

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Instacart announced expanded retailer services called Carrot Ads, Carrot Insights, and Carrot Warehouses.

Celia Van Wickel, Senior Director, Digital Commerce
25 March 2022

First, let’s introduce these new services.

Carrot Ads: Provides retailers digital ad network capabilities. Instacart advertising technology, products, engineering and sales talent, and data insights are offered to retailers owned and operated e-commerce sites. Participating retailers have digital storefronts powered by Instacart. Currently piloting with small and regional grocers, Schnuck Markets Inc., Good Food Holdings, Plum Market, among others. Expanding later in 2022.

Carrot Insights: Gives all Instacart Platform customers near real-time insights dashboards to track key performance and operational metrics such as order volumes and out of stocks across Instacart Platform and retailers’ own Instacart App storefronts. Instacart’s new data analytics software helps retailers better understand geographic sales, out of stocks, and customer buying trends.

Carrot Warehouses: Instacart will work with retailers to enable end-to-end fast delivery solutions, with 15-minute ultrafast delivery capabilities. This includes supporting retailers to build new nano-fulfillment centers (NFCs), devising floor plans, establishing automation services, and running ongoing operations. Carrot Warehouses will power 15-minute ultrafast delivery for Publix customers in Atlanta and Miami over the coming months.

Instacart's extended platform offerings

Extended Instacart retailer services were to start with micro-fulfillment

In February 2021, it was first speculated that Instacart would get into micro-fulfillment. I had thought a of couple paths they would consider were:
1. Create warehouse model and white label to retail partners
2. Partner with micro-fulfillment companies to integrate with retail partners' evolving operations.

Let’s start with Carrot Warehouse.

At the end of last year, it was clear that Instacart would need to gain dark warehouses to become a player in rapid grocery delivery immediately, and Instacart must turn to its Micro-fulfillment as a Solution (MaaS). While Fabric was announced eight months ago to partner for these solutions, now there is a new nano fulfillment strategy that appears not to include Fabric.

Carrot Ads and Carrot Insights

Instacart is a major player in retail media revenue. Because of their vast retailer network, their contribution to CPG digital sales is quite large. Ad networks are a huge growth area, and Instacart has pivoted the model to offer it as a service competing with companies such as Criteo. Smaller, regional grocers need this help if they can consolidate services with Instacart and make incremental revenue, that is a win.

The important part of maintaining these retailer relationships is data sharing, a goal of Carrot Insights. Data sharing will be a way to keep these smaller retailers happy.

It is important to think about the CPG data connection. These small retailers may capture different budgets and will need to offer CPG advertisers data value in ad exchanges.

Carrot services opportunities and threats

For now, the new Carrot services are focused on large-to-small regional grocery retailers. As Instacart learns how to smoothly integrate these services and optimize for success, down the road, it is very likely Instacart would expand these services to non-grocery retail partners. I wonder if they will compete further with Criteo’s and CitrusAd’s retail media solutions and offer the services as an API to retailers who do not power their sites through Instacart. GoPuff uses CitrusAd to power its retail media.

GoPuff could be poised to bring this service to the US. DoorDash has many last-mile partnerships, and a big one is Walmart delivery. DoorDash already noted entering the 15-minute delivery space and could offer this to their partners.

Overall, the new Carrot services are a bold, aggressive, and impressive move by Instacart. This will be a catalyst for further change in retailer services and acceleration of retailers moving deeper into retail media and rapid delivery.

 

Want to keep the conversation going? Get in touch.

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Inflation in March 2022

Barry Thomas, Senior Thought Leader
J Walker Smith, Senior Vice President
Julie Craig, Vice President, Shopper Insights
Doug Hermanson, Principal Economist

In our latest video miniseries, our industry experts walk through the latest inflation-related news.

In part 1, Kantar leaders J. Walker Smith, Doug Hermanson, and Julie Craig analyze the global, regional, and local effects of inflation on retailers and consumers. Shoppers' decision-making and store loyalty, supply chain disruptions, and increasing costs are also discussed. Part 2 discusses the industries that have been the highest sources of inflation. Part 3 explains how brands can remain innovative in a disrupted economy.

Want to keep the conversation going? Get in touch.

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Kantar retail welcomes Karen Kelso as VP, Mass and Club

17 March 2022

Karen leads Kantar’s insights into Walmart and big-box retail. She has developed and implemented data insights at and for global retailers for more than 20 years. As a buyer she managed large and diverse categories at Walmart and Sam’s Club and as a director of category insights helped create innovative strategic marketing plans for Walmart’s $24 billion consumables division. Karen built category marketing expertise during the turnaround of Coles Australia and led Kmart Australia’s marketing team in its conversion from high-low pricing to everyday low-price leadership. More recently, Karen supported IRI’s syndicated data and advanced analytic offers to help CPG clients develop and use data and insights. Karen holds a B.S.F.S. in international relations from Georgetown University and an MBA from the University of Virginia.  

Want to keep the conversation going? Get in touch.

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Crisis spurs companies to support Ukraine and exit Russia

Barry Thomas, Senior Thought Leader
11 March 2022

The conflict in Ukraine has led some of the world’s best-known companies to rapidly exit Russia, a country that’s become a global outsider and seen as a detriment to humanity. While companies must comply with government sanctions against Russia, they are well aware of the potential reputational risk if they continue to do business there. Also, many companies are leaving Russia simply due to their own corporate responsibility standards.

Nations and businesses are increasingly concerned about the plight of Ukrainians as the crisis takes a tragic toll on innocent civilians, turning millions into refugees. Subsequently, countries have been imposing sanctions against Russia, with punitive measures coming from the US, the European Union, Great Britain, Japan, Switzerland, Australia, and others.

Sanctions imposed after Russia occupied Crimea in 2014 had already weakened the Russian economy. As such, many international companies leaving Russia won’t see material impacts to their global business. Even so, the mass exodus of brands from Russia combined with punitive sanctions by a growing number of countries will increase the country’s isolation and likely lead to long-term economic hardship.

Here are just some of the industries and companies suspending business with Russia:

  •  Technology: Apple, Facebook (parent Meta), Twitter, Netflix, Twitter, Roku, YouTube, Google, Airbnb, Intel, Microsoft, Mastercard, Visa, American Express, and other smaller technology firms
  • CPG, retail, and restaurants: H&M, Ikea, Zara, Puma, Adidas, Coca-Cola, PepsiCo, Starbucks, McDonald’s, Hermes, Lego; many other brands may suspend operations
  • Auto and aviation: Ford, General Motors, Toyota, Volkswagen, Boeing, Airbus
  • Shipping: Maersk, Mediterranean Shipping Company, UPS, FedEx
  • Energy: BP, Equinor, Exxon, Shell, Total Energies
  • Media and entertainment: DirecTV, Disney, Warner Media

Restaurants are also finding ways to boycott Russian products while supporting the Ukrainian people. Restaurants across North America and Europe have stopped selling Russian-made vodka and signature Russian meals.

Beyond companies boycotting and suspending business in Russia, brands, retailers, and organizations are stepping up in meaningful ways to support Ukraine:

  • EU rail transportation companies like Germany’s national rail carrier, Deutsche Bahn, are allowing Ukrainians to ride their trains at no charge as they travel to safer locations.
  • Etsy is waiving fees for Ukrainian sellers to help support their Ukraine seller base.
  • The Female Company is shipping free menstrual products to the country and border areas.
  • Airbnb is offering free housing to 100,000 refugees fleeing Ukraine.
  • Tesco has launched a retail operation for Ukraine, donating funds to the Red Cross and supporting food and water donations to the country using its trucks and distribution centers.
  • Many other retailers in Europe are making sizeable monetary donations to the Ukraine relief efforts, including Aldi, Lidl, Morrisons, Amazon, Burberry, Waitrose, Sainsbury, and Marks & Spencer.

Importantly back home, a growing number of US-based supermarkets like Kroger, SpartanNash, Southeastern Grocers, Publix, and National Co+op Grocers are no longer selling Russian-made products while also donating funds to support Ukraine relief efforts.

To date, over 300 companies have stopped doing business in Russia. The rising tide of companies boycotting Russia and supporting Ukraine is unlike anything we’ve seen in global commerce in our lifetime. You can find an ongoing list of companies boycotting Russia on the Yale School of Management site.

The near-term and long-term impact of these actions are still unclear.

Want to keep the conversation going? Keep in touch.

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Gopuff and Gorillas: An ultrafast delivery inside experience

Celia Van Wickel, Senior Director, Digital Commerce
10 March 2022

Ultrafast delivery has penetrated New York City. These companies have aggressive customer acquisition campaigns. Ultrafast couriers are seen all around the city. City officials are pressuring to block dark stores and eliminate 15-minute messages in advertising. According to YipitData, Gopuff is reported to have the largest share of the New York City rapid delivery market. Kantar tried Gopuff and Gorillas and found a couple of surprises.

Download your complimentary infographic today.

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Target announces partnership with black-owned Bridgeforth Farms

Taylre Stumpfe, Analyst
10 March 2022

Retailers are being placed under the spotlight as shoppers hold them accountable with higher expectations that support values. Target does a great job at understanding its shoppers and goes beyond in order to create product selections that reflect its values. Target recently forged a new partnership with Black-owned Bridgeforth (cotton) Farms. The cotton farm partnership aligns with Target’s diversity efforts its REACH initiative and sustainability goals through Forward. Want to know more? Download your complimentary infographic below.

Download your complimentary infographic today.

Craig_Julie_Kantar

Shoppers brace for inflation impact

Shoppers find themselves juggling multiple layers of stress as the pandemic nears its two-year anniversary in the US. In addition to ongoing health and wellness concerns, shoppers have been navigating saving and spending in a tumultuous economy, made even more uncertain by the rise in prices due to inflation. Shoppers began feeling the impact of inflationary pricing in late 2021/early 2022, and Kantar ShopperScape® data indicates shoppers are most concerned about inflation impacting their everyday grocery shopping and gasoline.    

As shoppers begin the process of finding room in pandemic-stretched budgets for inflationary prices, Kantar data indicates that they may add channel/brand shifting and more disciplined spending to their money-saving toolkits, along with the deal-seeking and delayed purchasing they employed throughout 2020 and 2021.

Most recently, shoppers have had to grapple with the unexpected stress of the ongoing Russia-Ukraine conflict. While the future impact on the supply chain and prices is still unclear, shoppers will no doubt reach back into their money-saving toolkits in the short-term, stocking up on essential household items and leveraging different fulfillment methods to find the right products in the right quantities – and at the right price.

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Source: Kantar, “Shoppers brace for inflation impact”, March 2022

ShopperScape® is your direct connection to the shopper, tracking monthly shopper behavior and attitudes with 3,000 shoppers, across 115 retailers and over 30 product categories.   We help you understand where shoppers shop, what matters to shoppers, and emerging and timely shopper trends.

Want to keep the conversation going? Get in touch.

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Six ways restaurants are reinventing themselves 

Barry Thomas, Senior Thought Leader
4 March 2022

Recovering from the pandemic will continue to be challenging for the restaurant industry in 2022. As we reflect on the past two years, it's clear that the foodservice industry has addressed many complex issues with innovative strategies and a growth mindset. 

Restaurants that have survived the pandemic have done so by embracing robust innovations to reinvent their business models and economics. We have seen that successful foodservice brands are futureproofing themselves through digital investments, flexibility, new partnerships, imagination, and new revenue pools. 

Restaurants emerging stronger from the pandemic have innovated with new revenue acceleration initiatives and business practices. We have identified six emerging growth platforms that restaurants have pivoted to and will continue with this year and ahead: 

  1. Reinvent on-premises operations to reflect new consumer behaviors
  2. Develop a restaurant version of DTC to drive new data capture and brand value 
  3. Accelerate new meal access points (dark kitchens, vending, and food trucks) 
  4. Reward loyalty and attract price-conscious consumers with subscription models 
  5. Adopting artificial intelligence and automation to futureproof the business 
  6. Re-create the restaurant brand experience within homes to build the brand and new revenue pools 

While foodservice brands will remember the pandemic for the monumental challenges it created, they will also regard it as a time of incredible innovation for restaurants and their suppliers. We have built out detailed slideware content for Kantar clients on the six restaurant business models you can access here. Not yet a subscriber? We’d love to talk to you about Retail IQ, the hub for retailer, channel, and market growth. 

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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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Nishant Shrikhande

The ever-changing last mile delivery landscape

Nishant Shrikhande, Senior Analyst, Digital Commerce
1 March 2022

Last mile delivery has long been a challenge for retailers and suppliers alike. Getting the product into the hands of the shopper in a cost effective and efficient manner requires a comprehensive fulfillment strategy, often involving partnerships in the last mile. The evolution of the last mile space has brought about several last mile delivery providers along with last mile services from major retailers (Walmart, Amazon, Kroger, etc.). Channels like Grocery and Drug have found last mile delivery particularly important in their omnichannel strategies. The COVID-19 pandemic fast tracked the online grocery sector, and many more shoppers began using grocery delivery services in 2020 and 2021. The Drug channel found last mile delivery helped get products to shoppers without them having to come into stores while sick.

Quick commerce players like Gopuff, Gorillas, and Getir have also entered the market in the last few years. These players promise delivery in under 30 minutes and drive impulse purchase behavior from shoppers. Quick commerce is already a massive business in Europe and is making inroads in the U.S., specifically in New York City. These players have led other last mile delivery providers like DoorDash and Uber Eats to move into the convenience and grocery delivery market as well, as these last mile delivery providers see massive revenue opportunities in both. Quick commerce players will become a bigger part of omnichannel retail in the U.S. over the next five years. They cannot be ignored or pushed off for later.

With so much going on in the last mile delivery space the challenge for suppliers becomes, “which partnerships do I pursue?” and “How should I pursue them?” Suppliers need to understand how the shopper is engaging with last mile delivery providers. This can help a supplier determine how much of their assortment, marketing spend, and overall budget to allocate to each player. It is difficult to determine which last mile providers and retailer services will prevail and which will be acquired or fail to achieve long term profitability. Suppliers must keep tabs on the changes in the last mile delivery market and update strategies accordingly. Meanwhile, on the retailer side, it is difficult to determine whether a partnership with a player like Instacart is sufficient, or whether an in-house last mile delivery service may be a worthwhile addition, or even alternative. Retailers must weigh the tradeoffs here and ensure they are taking advantage of revenue streams that the last mile delivery providers offer.

If you would like a more in-depth look at the impact of last mile and hear thoughts from my knowledgeable colleagues and myself, please attend the Kantar Last-Mile Evolution virtual event on March 3, 2022.

Full agenda and registration here: https://retailiq.kantar.com/2022fulfillment

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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
 

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Dave_Marcotte

What does the Russia-Ukraine conflict mean for retail? pt. 3

Dave Marcotte, Senior Vice President, Global Retail Insights
28 February 2022

The recent developments in Ukraine will have immediate and potentially lasting effects on global retail. From distribution industries, including fuel, plastics, and packaging to an already disrupted supply chain, we expect far-reaching implications.  

In this three-part series, our industry experts Rachel Dalton, David Marcotte, and Amar Singh discuss retail ramifications and implications for shoppers. Part 3 exposes the potential logistical impacts on the retail industry. 

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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
pexels-photo-262391.jpg
09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
 

Dave_Marcotte

What does the Russia-Ukraine conflict mean for retail? pt. 2

Dave Marcotte, Senior Vice President, Global Retail Insights
28 February 2022

The recent developments in Ukraine will have immediate and potentially lasting effects on global retail. From distribution industries, including fuel, plastics, and packaging to an already disrupted supply chain, we expect far-reaching implications.  

In this three-part series, our industry experts Rachel Dalton, David Marcotte, and Amar Singh discuss retail ramifications and implications for shoppers. Parts 1 and 2 discuss pricing and inflation concerns.

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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
 

Tiffany Hogan

Target enhances drive up services to include Starbucks

Tiffany Hogan, Director, Retail Insights
25 February 2022

Target made waves this week when it announced that guests will soon be able to add Starbucks orders to their Drive Up orders and complete returns without leaving their car. Additionally, Target is expanding its “backup item” functionality to serve a broader range of categories, including beauty and household essentials. All of this is notably available with “no time slots or membership fees required,” a not-so-subtle jab at competitors Walmart and Amazon.

So What?

Target is bringing the Target experience to your car, eliminating current pain points with returns and unfulfilled items and bringing unbridled joy to Starbucks fans (in select cities) who can now drive up and caff up at the same time. Beyond these customer-level improvements could be hints at struggles Target is looking to solve:

  • Impulse may have taken hit along Drive Up’s wild rise to fame. While plenty of shoppers still enjoy a good sip and stroll in Tar-zhay, trips and dwell time may have dropped during the pandemic, driving Starbucks — and potentially other impulse brands and categories — to look for new ways to get into shoppers’ last-minute baskets.
  • More Drive Up may have brought more problems. The average rate of return for online purchases in 2021 was approximately 21%, according to the NRF. Target’s same-day services (read: online purchases) have grown 400% since 2019, indicating an influx of returns that most shoppers look to execute in stores. Processing returns in the parking lot drives perceived efficiency and a high level of personalization to the process.
  • Back that (mud) mask up. While backup items were a welcome addition to grocery, beauty and essentials are historically the largest single department for Target, representing 26% of total sales in 2020, and are the focus of big assortment investments, including the Ulta Beauty partnership. The expansion into new categories presents a huge opportunity for more brands to get into shoppers’ digital baskets without being on their original list.
Now What?

Drive Up is here to stay, and Target is leaning into it by catering to its every need. These additional services aim to bring all stress-free processes and perks of the store to your car, a win for guests and new challenge and opportunity for brands to connect with shoppers. Here are key questions brands should be asking:

  • How can impulse items participate in the add-on ordering that will power Starbucks pickups?
  • How can product description pages be improved or modified to give shoppers the tools and information they need to make better purchases and fewer returns?
  • How can beauty brands participate in backup item generation to get in front of a new and highly targeted shopper segment?
  • Will these new tasks add to or streamline team members’ responsibilities, and how will that affect the time they spend elsewhere in store?


Kantar POV

These initiatives align with where we expect Target to continue investing to drive not just trips or purchases, but loyalty and engagement, the core tenants of Target’s strategy. We expect Target to report on its 2021 performance within the next several days. With these initiatives in mind, here’s what we’ll be listening for:

  • How was your holiday? Target’s holiday performance notably received no off-cadence update this year, suggesting that performance was lower than expected or that it at least requires deeper explanation than a press release can offer.
  • How about your year? Coming off two years of extraordinary growth, we’ll keep our socks on if Target reports annual sales growth below that of 2020 ( approximately 20%). With competition reheating across many of Target’s core categories, we expect growth to continue but potentially moderate.
  • Where’s all your stuff? The industry at large has suffered from supply chain issues. How did Target handle this in Q4 and how is it set up to do so going forward? Key metric: inventory versus 2020 and turnover.
  • Anything else? We expect Target to announce more enhancements like these throughout the year. Look for Target to leave more breadcrumbs for investors, especially if results are relatively lower than expected.
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
 

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Dave_Marcotte

What does the Russia-Ukraine conflict mean for retail?

Join David Marcotte, Amar Singh, and Rachel Dalton as they discuss the lasting implications in this 3 part mini series.

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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
 

Dave_Marcotte

Retail's new threat: Collateral damage from cyberwarfare

Dave Marcotte, Senior Vice President
22 February 2022
 

The pandemic exposed just how tightly the US is integrated into the global economy given the huge level of products, support services, and investments that come from overseas. But that integration is highly vulnerable to the growing proliferation of global cyber threats, meaning that cybersecurity should be a top industry concern.

Cybersecurity became critical for all industries in 2020 with the rise of ransomware that directly impacted just revenue but also future profits. According to a 2021 report from cybersecurity firm Bitsight, ransomware attacks exploded from 13% of reported cybercrimes in 2014 to 54% in 2019. These attacks have evolved from single-tier demands for payments to release data to second-tier threats of releasing sensitive data in increments while waiting for payment and even third-tier attempts to extort individuals associated with the data.

Most of these attacks were directed at stressed and poorly defended healthcare companies in 2020 that clearly could not afford to be offline for even a few hours during the pandemic. Since then, the attacks have expanded to the equally stressed and fragmented logistics industry.

However, the real threat now is the high potential for collateral damage from cyberwarfare that has already escalated in Eastern Europe. Russia has a long history of actively using these weapons in the region, but so does Ukraine though arguably more so in self-defense.

History Lesson

It’s worth reviewing the last time one of these attacks occurred and caused widespread damage to retail-related industries.

On June 27, 2017, malware was activated on multiple government and financial systems in Ukraine. First thought to be Petya ransomware, it turned out to be a weaponized version called NotPetya that prevented users from accessing their hard drives and offered no way of recovery, effectively destroying the data.

Directly aimed at Ukraine to severely disrupt IT support infrastructure, it rapidly spread to other connected systems, which was likely part of the intended disruption. Within a day, more than 1,500 businesses, airports, power grids, and financial management systems were damaged.

Global data integration meant the destruction did not stop at national borders. By the second day, international companies, including Mondelez, Moller-Maersk, TNT Express, Saint-Gobain construction, hospitals in the UK and US, a global marketing firm, and a pharmaceutical company, were infected.

Most companies cut access to common communication trunks to isolate themselves from infection, but that meant cutting themselves off from business as well. The infected organizations spent weeks in test-and-recovery mode, further limiting their return to productivity.

“Asymmetrical warfare” is waging undeclared war by means of proxies, independent agents, and professionals so that there is no clear line of responsibility or “plausible deniability.” Even though warfare is as old as nations, the emergence of digital warfare is a 21st-century occurrence. Attacking IT systems and infrastructure offers a far higher ROI with considerably less risk to the original aggressor. Moving armies, engineers, or equipment is expensive. Software is decidedly cheaper and already has an extensive landscape dedicated to concealing identities while ensuring results.

This landscape is a competitive matrix of experts for hire, mostly based in Russia and Eastern Europe. The early internet marketing (via spam) of gray market pharmaceuticals created a loose infrastructure of specialists. One group found and stored working email addresses. Another managed payment. Still another managed messaging, while others captured computers for use and delivered the product.

Their success drove others to improve their craft. It also attracted the funding and attention of criminal gangs tied to governments in the 1990s. A gray cooperative of profitable mischief makers — the Spam Nation of coders, finance, gangs, and often compromised security agencies — emerged.

Turning Point

At the same time, nations started leveraging the internet and digital devices to build espionage capabilities. Implementing keystroke readers, monitoring communications, and tracking users were the basics. The big leap came in 2010 with Stuxnet, a software worm designed to damage Iran’s nuclear program.

Its success led to an international arms race to create better, more effective, and harder-to-detect code. The Spam Nation was often the ideal conduit to expand into the serious criminal activities of stealing financial information and selling credit data. Ransomware emerged around 2014 for criminals to drive illegal income. However, due to lack of predictable results and ransom payments, it was not very cost effective.

That changed in 2016 when the US National Security Agency (NSA) lost control of a suite of software tools. The NSA leak, combined with an effective Stuxnet reverse-coding, made ransomware far easier to build and execute on a large scale. But it also meant that governments could outsource coding and execution of weapons to relatively unknown groups. Resulting attacks were not as narrowly targeted as they were with NotPetya, which is the code developed from that NSA leak.

Collateral Damage Risk

Retailers live with daily cyberattacks, such as spear-phishing, distributed denial-of-service attacks, and active and passive monitor taps within supposedly secure systems. Those in the C-suite understand that a breach can cost them their leadership positions. Even large and previously immune social media companies have discovered the financial impact of sharing users’ data without their consent. But it is decidedly harder to measure the collateral damage to processes and procedures that is a byproduct of this new form of warfare.

It is difficult to overstate how integrated retail and the surrounding ecosystem is today, resulting in reduced costs and improved customer engagement, inventory, and financial technology, all of which are competitive requirements. Retailers invest to protect the integrity of their systems from hackers, blackmail, and wandering viruses. Data and process hygiene are essential to integrate with third parties. Risk mitigation is a mature planning tool for all of retail, including IT.

However, asymmetrical warfare is not a normal part of that planning, which makes future collateral damage to a retailer likely. IT must be more aware of new threats not aimed at the industry, but that can easily damage it. This means it must have a high degree of threat awareness and work with security firms that specialize in identifying these threats in real time. And it means reassessing current preventive tools that have performed well to date, but that can often be altered into weapons as a means of stealth access.

Interested in learning more about our take on global impacts to the US market? Join us on March 16 for our virtual event that will cover everything from “Establishing supply chain-import resilience for 2023” to “International retailing in the US: A new age of disruption.” Reserve your spot today.

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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
 

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barry_headshot_white-2

metaverse opportunities for brands, retailers, and restaurants

Barry Thomas, Senior Thought Leader
Celia Van Wickel, Senior Director, Digital Commerce
18 February 2022

 

The primary objective of the metaverse and Web 3.0 is to create immersive 3D virtual worlds that provide near-real experiences. A mass-market platform like the 3.0 real-time web is an opportunity for brands and channels to experiment with innovative virtual experiences and physical products as a new way to build brands and shopper engagement.

 

In 2022, metaverse building blocks will continue to emerge for an immersive future from games, business applications such as logistics, and, ultimately, shopping and dining.

 

Nike has led the charge with patents and acquisitions to have virtual goods and build virtual retail environments to sell those goods. Other brands moving boldly into the metaverse include Gucci, Roblox, Tafi, Coca-Cola, and Louis Vuitton. Miller Lite hosted a virtual bar in Decentraland during this year’s Super Bowl. Walmart and McDonald’s have also secured patents to have their trademarks and brands sell in the metaverse.

 

Think of the metaverse like the early stages of online shopping. It won’t produce big sales immediately, but it will be a test-and-learn environment that leads to the next evolution of the web. The metaverse won’t necessarily be the sci-fi adventure it appears. Still, it will be a place where continued improvements in augmented reality (AR), virtual reality (VR), nonfungible tokens (NFTs), and cryptocurrency will lead to virtually immersive environments that will change online experiences and commerce. According to eMarketer, the US was expected to reach 85 million AR users and 57 million VR users in 2021.

 

This emerging context has considerations for how brands, retailers, and restaurants enter the metaverse.

 

How Brands Can Enter the Metaverse

 

Here’s a five-step road map for brands that want to establish a foothold in metaverse.

 

Learn from other brands. Create metaverse learning circles within your organization and among noncompeting brands to generate insights and learnings within your company and with an outside-in lens. Document winning use cases and catalog the lateral learnings for your metaverse marketing.

 

Some companies are already moving assertively in this direction. Disney recently appointed a dedicated leader to guide the brand’s metaverse strategy. Some organizations may want to appoint someone part time to lead the initial metaverse marketing phase if a full-time role isn’t optimal.

 

Identify your target cohort. Who is the target consumer? Gen Z will be an early adopter and should be a prime demographic to recruit to your brand.

 

Start with e-gaming and virtual ecommerce. Gaming is the most mature platform for metaverse immersion, with Fortnite offering the closest experience to the metaverse. Of gamers between 12 and 42, 56% spent their own money on in-app purchases in a video game in the past year, according to the Kantar 2021 US Monitor. Launching new marketing campaigns, extending brand engagements, and connecting to in-app purchases support the capabilities you need before you dive into the metaverse.

 

Launch and learn. Leverage your metaverse learning circles, key agencies, and Gen Z consumer insights to develop a launch plan for your brand.

 

Keep calm and market in the metaverse. New areas present risks and rewards, especially with few standards and rules in the early adoption cycle. But taking a wait-and-see approach is the bigger threat to brands since marketing in the metaverse likely carries a first-mover advantage, especially with the No. 1 target you want to recruit — Gen Z.

 

How Retailers Can Enter the Metaverse

 

Retailers need to consider stores, goods, categories, marketing, and more to get up and running in the metaverse.

 

Build experiential virtual stores. Walmart is securing terms such as “Verse to Home,” “Verse to Curb,” and “Verse to Store,” signaling its intention to build an end-to-end selling experience in the metaverse. If Walmart US can shift 1% of its total expected online sales to the metaverse, this new “channel” could account for over USD1 billion in sales for the retailer by 2026.

 

Online shopping can’t match the experience in stores, with their more straightforward navigation of brands, packages, and displays that capture shoppers’ impulse and attention. Consider using AR/VR to offer experiences within virtual stores or experiment with shopping features that are difficult to embed in a traditional online shopping experience. The metaverse can immerse shoppers in a live room where they can interact with or learn how to use products or simply see actual store shelves as a replica of their local store.

 

The metaverse can enable infotainment through disruptive, pop-up displays and long-term use of AR/VR to provide richer shopper experiences, offering shoppers real-time personalized help and consultations. Connect immersive experiences to nutrition or sustainability themes to help shoppers navigate product options.

 

Consider the business meeting conducted in a video clip released by 8i and 8th Wall where the presenters appeared live in the room through AR, similar to a hologram but livestreamed. Now imagine associates or experts directly in the room with your shopper. A business application like this may pave the way for general shopper adoption of the metaverse.

 

Enable virtual goods and brand connection. Provide a platform for physical goods connected to NFTs to offer digital equivalents within the shopper’s metaverse. Digital goods may also be an additional revenue stream or added to marketplaces. Consider using NFTs or similar to enhance brand experiences, unlocking exclusive content in the metaverse. These brand experiences could be offered as solutions within retail media. Use NFTs to entice new brand trials, aligning exclusive offers or content to drive awareness and engagement.

 

Connect to the store. Retailers have used stores to differentiate experiences and are testing new tools such as AR and livestreaming. Experiential elements should be transformed and stretched into a metaverse-led immersive in-store shopping experience. The metaverse is an opportunity for more immersive AR- or VR-assisted advice on what you already have at home, product information, reviews, and store navigation. For instance, shoppers can see how that pair of sneakers might look through their screen or headset before heading to checkout.

 

AR is the way many people first step into the metaverse, with many not even realizing it. Retail shoppers have been slow to adopt AR, but as the technology and hardware mature, AR could create a seamless opportunity for the experiential (rather than the guided) use of apps and QR codes today.

 

Transform social commerce experiences with relevant categories. As a Jan. 3, 2022, Harvard Business Review article noted, “The social media landscape is keen to capitalize on the intersection of where people connect … but also in a 3D, immersive metaverse. Virtual showrooms, fashion shows, and dressing rooms suddenly have the potential to shift from fringe experimentation to mass adoption.”

 

Retailers should be mindful of the incremental value of the metaverse platform versus simply replicating existing social media experiences. For example, a livestreamed shopping experience in the metaverse may feel like you’re next to the livestreamer and virtually trying on the clothes with their consultation.

 

When it comes to social commerce, consider either experimenting with China or looking to China to establish a test foundation in the US. As eMarketer, noted, the ecosystem in place in China offers:

 

  • A supportive regulatory environment for emerging tech
  • Expansive 5G networks
  • Advances in affordable consumer-ready AR and VR hardware and software

 

Internet users in China have warmed to avatar-based social platforms, NFTs, AR try-on, and virtual celebrities. Experts believe metaverse adoption in South Korea will come by way of K-pop whose intense fandom will draw high attendance to metaverse-led concerts and purchases of NFTs and digital token goods.

 

Retailers are experimenting on TikTok and through Livestream to reach Gen Z shoppers. Similarly, reaching Gen Z will require more metaverse experiments. Like social and livestreaming, the early days of metaverse activation may work best with similar early adopter categories on these platforms, such as fashion, beauty, health, cooking, and celebrity events. Consider categories where experience adds a lot of value. We already see apparel and beauty brands buying land in the metaverse, with Gen Z already comfortable purchasing virtual goods in games like Fortnite and Roblox. Whether you’re targeting Gen Z or older generations, tailor the metaverse experience to themes and products relevant to the age group.

 

Grocery retailers in the metaverse should think how they can help shoppers understand more about products, nutrition, sustainability, meal solutions, recipes, and freshness. In the metaverse, you could host a cooking class with Gordon Ramsay and feel like you are there with him in person.

 

And voice shopping may have an actual application in the metaverse. While Amazon’s Alexa has entered living rooms across the US, using voice to shop has been slow to take off though some experts still believe adoption will grow. The metaverse offers a community and live interaction where you could talk to someone across the globe. In a virtual world, real voice and conversational language may be necessary to sell in these immersive environments.

 

Enable loyalty and digital wallets. Loyalty programs, a staple for most retailers, are evolving to create new value and benefits for shoppers, especially monetizing value with new subscription models. Retailers could encourage shoppers to use cryptocurrency, bitcoin, or other blockchain-connected currency to help them earn points and rewards and to store earned NFTs or digital tokens in their crypto wallet. You could also connect metaverse experiences to exclusive opportunities for your most loyal shoppers.

 

Most metaverse platforms have their own crypto tokens that users can buy and use online. Companies are exploring their own virtual currency and digital tokens so shoppers can make purchases in the metaverse. With mobile pay gaining wider adoption, retailers have an opportunity to enable their crypto wallets across the digital and physical and enable universal cross-border payments. Digital currency may also be an option for lower-income shoppers, the unbanked, and younger shoppers. Retailers could provide a cash payment for digital currency to spend in their ecosystems, like a prepaid card or offer as an extension of their credit card.

 

Some retailers will try to tie these solutions to their fintech initiatives. Walmart is reportedly building a fintech super app. But watch out for regulations as when China broke up Alibaba and its fintech arm, Ant Group. The space is evolving and is meant to be decentralized — JPMorgan Chase entered the metaverse and sees a decentralized opportunity worth a USD1 trillion a year — but regulators could put the brakes on such a model.

 

How Restaurants Can Enter the Metaverse

 

Restaurants can now develop marketing skills in the metaverse rather than waiting a couple of years or more. Restaurant brands like Chipotle are already experimenting in this new landscape with new virtual promotional mechanics on platforms like Roblox.

 

The next restaurant consumers could discover their favorite new signature dish from virtual experiences similar to Roblox and Facebook. In February, McDonald’s made a bold move by filing 10 trademarks to enter the metaverse. The trademarks highlight McDonald’s plans to:

 

  • Operate a virtual restaurant featuring physical and virtual products
  • Run a virtual restaurant online with home delivery
  • Provide virtual meals
  • Leverage NFTs and other downloadable assets

 

Here are six experimental moves for restaurant brands to ponder:

 

Build your virtual restaurant. Develop your new restaurant and consumer journey with the knowledge that your mobile app may not be the primary way people order once they’re in the metaverse. Restaurants have a powerful opportunity to re-create their brand in the virtual world, which provides lateral learnings back to your physical locations.

 

Sell a meta franchise. Restaurants should consider what the franchise model will look like in the metaverse. The franchiser that has built the virtual restaurant with all the brand assets would sell these meta restaurants to franchisees similar to physical outlets today. Consumers would order their meals from the virtual drive-thru or kiosk as they sit at home and have the food delivered from an actual last-mile provider.

 

Work out reservations. Restaurant guests will want to check out virtual restaurants first before placing an order. Since you have the virtual restaurant now built, partner with leading reservation brands like OpenTable to build learnings and capabilities for how bookings will work best.

 

Build out delivery. Expect dark kitchens to be crucial to solo and group ordering in the metaverse. Restaurants will want to build virtual delivery capabilities that give them ownership of the consumer journey, data, and experience while still partnering with last-mile providers.

 

Adapt your loyalty marketing. The metaverse provides a compelling opportunity to build out members-only restaurant experiences where your branded NFT is the entry mechanic. Restaurants will provide different tiers of NFTs to members, providing incentives to move up the consumption scale for better metaverse rewards.

 

Establish digital twins. With a 5G cloud-connected metaverse, more restaurant brands will use digital twin technology. For example, a restaurant’s intelligent kitchen could cause real-time issues for the restaurant and guests. With a digital twin virtual restaurant of the actual physical location in the metaverse, staff can leverage the twin to fix the problem immediately.

 

Opening a Door to the Metaverse

 

The metaverse could be like the early days of online shopping. The dot-com bubble burst in the early 2000s, but online shopping still evolved. Many metaverse initiatives will come and go, but they may lay the groundwork for new evolution. A company could build its identity on the blockchain. Simply scanning the logo would take you to information or even experiences.

 

Super Bowl 2022 was coined the Crypto Bowl, given the numerous cryptocurrency companies that advertised during the game. The Crypto Bowl could be like the early 2000s when website firms spent big on advertising then disappeared shortly thereafter. While this example may be a word of caution for these emerging crypto brands, it signals the trend rather than the companies themselves.

 

And a trend did emerge during the game. Cryptocurrency Super Bowl advertiser Coinbase garnered 20 million downloads from a 60-second ad featuring a lone QR code. Now 20 million people have a doorway to using digital currency and to entering the metaverse.

 

Today, companies are taking baby steps into the metaverse.

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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
 

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Alexa Bowman

Seasonal retail pulse: Valentine's Day 2022

Alexa Bowman, Lead Analyst, Drug
15 February 2022
 

Valentine’s Day promotions took an interesting approach leveraging loyalty and cost-conscious shoppers. Our findings include:

  • Retailers used Valentine’s Day products to promote their private label products as a lower-cost option
  • Valentine’s Day promotions in online, DTC, and store models highlighted many omnichannel abilities
  • Initiated as a COVID response, the pick-up in store model is an important new way to shop

Download your complimentary infographic of our Valentine's Day retail findings below.

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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
 

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Kate Hohenstatt

Season retail pulse: Super Bowl 2022

Kate Hohenstatt, Senior Analyst
14 February 2022
 

Retailers used many different avenues to promote the Super Bowl outside of traditional in-store displays. To learn more about this year's overarching trends, competition over space, supplier implications, and more, download your complimentary Super Bowl 2022 infographic today.

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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
 

Download your complimentary infographic today.


barry_headshot_white-2

As pickup grows in US, France's DELiPOP is one to watch

Barry Thomas, Senior Thought Leader
11 February 2022
 

We will await Amazon’s guidance on the next quarter and year and listen closely for the initiatives highlighted here with these thoughts in mind. Ecommerce fulfillment in the US tends to focus on store pickup and delivery, yet a third option is worth keeping an eye on: pickup lockers.

Ecommerce pickup lockers benefit both shoppers and retailers. For shoppers, pickup lockers are contactless, efficient, and can be more conveniently located than stores. For retailers, pickup lockers and kiosks:

  • Help them reach shoppers beyond store locations
  • Require less labor than in-store and curbside pickup, which can have high idle times
  • Provide another point for returns
  • Lower fulfillment costs and benefit the environment with consolidated deliveries
  • Reduce theft of online orders left on doorsteps

While international retailers have been deploying pickup lockers for many years, we’re now seeing more US retailers do so, with Albertsons, Kroger, Stop & Shop, and 7-Eleven among the retailers expanding their pickup locations.

Given their higher level of ecommerce maturity, it’s no surprise that European and Asian retailers are more advanced in ecommerce pickup. Take France where DELiPOP, a fully automated ecommerce pickup service, is one of the most innovative next-generation pickup models going.

DELiPOP, which launched last year, offers the first multi-brand network of automatic pickup locations for online grocery orders. DELiPOP provides retailers with what it calls its five pillars of benefits across city and suburban areas:

  1. Its automated collection points reduce delivery costs.

  2. Consolidating shoppers’ orders simplifies last-mile fulfillment and reduces the number of trucks and cars used.

  3. The network’s broad reach and accessibility increases retailer distribution points. DELiPOP's goal is to deploy 1,000 pickup points by 2025 across France and the UK with a daily pickup capacity of 200 orders per unit.

  4. Retailers incur variable costs rather than high fixed costs for owned locker pickup points.

  5. The network creates a unique and convenient experience for shoppers.

The concept offers shoppers several advantages as well:

  • Always available: Locations are open most of the day. Shoppers choose the pickup time they want.

  • Fresh and frozen: Similar to stores, fresh and frozen grocery categories are available for pickup.

  • Broad assortment: Shoppers have access to 15,000-20,000 SKUs from various retailers.

In addition, DELiPOP says that its pickup hub network allows it to use 10 times fewer automobiles than standard delivery services to fulfill the same number of orders. That approach lowers road traffic and CO2 emissions, resulting in cleaner air.

DELiPOP was named the best ecommerce concept of 2021 at the Retail Execution Forum held in December in Paris. DELiPOP won the award for food orders pickup automation and for retail industry cost savings.

The rapidly evolving pickup sector is becoming a third ecommerce channel with material benefits to shoppers, retailers, and the environment. While locker and kiosk stations have their operational challenges, they give shoppers the flexibility to pick up their orders beyond the store.

US retailers can learn from the DELiPOP model. Moving now could be the best time for many retailers, restaurants, and last-mile providers to deploy more future-leaning pickup options.

Here's more about DELiPOP:

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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
 

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Nishant Shrikhande

Amazon Q4 2021 results

Nishant Shrikhande, Senior Analyst
Celia Van Wickel, Senior Director, Digital Commerce
4 February 2022
 

Amazon reported a strong Q4 2021 driven by AWS, Amazon Advertising, and the Rivian IPO. Download a complimentary copy of our infographic in the form below.

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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
 

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barry_headshot_white-2

What can legacy CPGs learn from DTC brands?

Barry Thomas, Senior Thought Leader
4 February 2022 

Direct-to-consumer (DTC) brands have had a profound impact on shoppers, commerce, and especially marketing. Many DTC brands are growing two to four times faster than legacy brands in many CPG categories and driving excessive category growth. Yet, per the traditional legacy brand playbook, DTC brands should find it challenging to create any material business given brand-building methods from the past.

Here are just three ways in which DTCs are recoding legacy marketing playbooks as these upstart brands launch as explorers, grow to challengers, and ultimately scale to become leading brands.

Using data capture for personalization: DTCs are teaching legacy brands how to personalize marketing to shoppers using rich, real-time insights into tastes, needs, and rituals. Dirty Lemon, a New York City-based DTC brand, is a wonderful example of how to personalize marketing to shoppers with text messaging. The company sells lemonade-based health drinks for approximately $10 a bottle using charcoal and other functional ingredients. Dirty Lemon’s marketing strategy provides a closed-loop and frictionless commerce approach that makes the brand more intimate to each shopper.

Entrepreneurial speed and innovation: Winning DTC companies have been driven by a deep understanding of shoppers, the market, and agile marketing. Yet as these DTCs move from explorer to challenger brands, an integral approach is taking risks, being far more innovative, and moving with speed. So many traditional CPG marketers are amazed at how fast DTCs can incubate and launch new brands, often within two to three months.

Storytelling with performance-based marketing: DTC brands leverage more precision-based marketing strategies to generate conversion and repeat purchasing. These brands combine powerful storytelling with exceptional content marketing and highly effective emotional messaging. The brand storytelling is often connected to the firm’s founding, driving a more authentic and crafted storyline.

DTC brands have had a massive impact on marketing innovation and the retail industry. As such, many, if not most, legacy CPG companies will be recoding their marketing playbooks with lessons learned from these upstart players.

Want to learn more about How to implement Direct-To-Consumer as a key part of your ecommerce strategy? Check out our follow-up report, available to all.

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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
 

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VanWickel_Celia_Kantar

Amazon quarterly earnings preview

Celia Van Wickel, Senior Director, Digital Commerce
2 February 2022 

This week Amazon reports its Q4 2021 earnings, the ultimate sign of its holiday and total year health.

Last quarter, CEO Andy Jassy warned Q4 would bring billions of dollars of additional costs due to supply chain and labor issues. This is an issue changing revenue growth management across most sectors. Amazon chartered ships, built up Amazon Air, and hired 150,000 seasonal workers to help it meet holiday demand. Amazon is expected to beat revenue expectations. Revenue is Amazon’s focus.

Amazon will reference a long list of highlights in its upcoming earnings. Based on recent news, I would like to hear about:

Advertising: Amazon has been growing advertising revenue. Amazon is ready to enter the advertising big league, aiming for Google’s and Meta’s territory, reaching across the Amazon ecosystem, Twitch, Fire TV, and IMDb TV to attract big brands.  Amazon’s MGM acquisition in 2021 was its second-largest acquisition. Amazon also tested T-Commerce (direct-purchase on content) on Prime TV and is hiring a head of sales for “Thursday Night Football.”

Amazon is pushing new measurement products aimed at big brands and leveraging the Amazon Marketing Cloud, a data clean room to provide a space where advertisers can securely see what types of people clicked on their ads and whether they drove sales, helping brands augment first-party data. Advertising is still a small piece of Amazon revenue. “Other (advertising)” is as large as its subscription services, and I expect this to become more sizable.

Store expansion: With Amazon Fresh expanding rapidly in the US and Europe, the recent release of the new Amazon Style store, and the resurgence of Amazon Go stores in the suburbs, I expect physical store growth to be a big factor in 2022. I would be curious to hear about further large-format Just Walk Out expansion and Amazon One palm payment it is actively incorporating in new formats.

Global: Amazon is building ecosystems worldwide with AWS expansion, creating events in India, and opening stores on established marketplaces. In Q3 2021, it debuted an Amazon store in South Korea with 11st, offering Amazon US products with free 6-10-day international shipping for subscribers. This is the ultimate in cross-border, blurring the lines for brands in how sales are attributed globally and across retail partners. 

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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
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09:00 am - 09:30 am Gathering & Welcome Speech  Donec sed nulla eros. Sed dignissim semper ipsum id posuere. Vestibulum ac nibh nec elit posuere ultrices. Praesent varius dictum mauris, vitae dignissim lectus elementum ut. Morbi faucibus libero in velit vehicula venenatis. Pellentesque vehicula tempus dolor, sit amet tristique risus bibendum a. Interdum et malesuada fames ac ante ipsum primis in faucibus.  Darill Mckeon Senior manager
 

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