24 Apr 2018
The world of retail is changing rapidly and the competition to attract more customers and build greater loyalty is stronger than ever. Puratos did extensive research on the changes that are taking place and identified 6 mega trends that are transforming retail around the world. What are these trends and how do they impact retailers and bakeries?
The entire world is becoming digital and giants like Alibaba, JD.com and Amazon are transforming the retail landscape. Retailers are also investing heavily to digitise their operations, improve customer experience and build e-commerce. Virtual shopping and unmanned stores are just two examples we see emerging around the world.
Planet Retail estimates that e-commerce will account for almost 25% of global modern chain sales in 2022. An e-commerce tidal wave is clearly on the move. However, adoption for fresh categories is much slower; fresh goods remain an emotional purchase and many shoppers want to select their products themselves.
Demographic changes such as urbanisation, an ageing society, smaller household size & more women working have a profound impact on how people shop. This means retailers have to adjust their store portfolios and rethink strategies to provide value for their shoppers. Convenience stores and discount stores are growing faster than large hypermarkets or superstores. We believe winning strategies focus on understanding shoppers on a local basis and tailoring the offer to local needs.
For Fresh Bakery categories, the Puratos research shows that artisan stores remain the store of choice in many countries. When we ask shoppers the main reasons for purchasing bakery products in an artisan store, the answer is very clear: for the quality and freshness. For all types of stores, this is the main battlefield to attract shoppers.
Fresh categories have a high penetration, a high purchase frequency and they under-perform online. That’s why more and more retailers focus on these categories to attract shoppers in their stores. Providing high quality fresh products is also important to build the store image and increase loyalty. All around the world, we see grocery retailers transforming their stores to strengthen their fresh offer, either for take-away or for consumption on-site. In this perspective, fresh breads, cakes and pastries are ideal categories to help stores differentiate.
The purchase of standardised products will increasingly happenonline. When visiting a store, shoppers are looking for a real experience. So, to stay relevant and keep attracting shoppers, retail stores need to provide great experiences for their shoppers.
For bakery categories, the Puratos research shows that shoppers are looking for artisanal and sensory experiences. They want the authentic bakery feeling: a human touch and homemade look & feel, with a traditional approach and real passion for the products.
A sensory experience includes the smell of fresh bread and, together with 80% of the shoppers we interviewed, we believe that ‘smelling is selling’. For indulgent sweet goods, the visual appearance of the products on display is very important as we all start to eat with our eyes.
Consumers want their food to be healthy and at Puratos we believe that, in the future, people will attach even more importance to the quality of their food.
We observe that retailers are extending their organic and vegan ranges, while focusing more and more on clean(er) and understandable labels to meet their shoppers’ demands for transparency.
For bakery categories, the focus is on fat, salt and sugar reduction, as well as on an increase in grains & seeds, fruits, cocoa and protein. A minority of shoppers is also looking for gluten free products.
Sustainability is often described as caring for the “3 Ps”: People, Planet and Profit. Companies focusing on profit only will find it increasingly difficult to grow their business as consumers are inclined to look more favourably on products and companies with solid CSR credentials. Top priorities include ethical sourcing, carbon footprint and food waste, all very relevant for bakery products.
Puratos bakery schools, cacao-trace programme and sourdough library are just some examples of our sustainability initiatives, and we work closely with our customers to help them achieve their own sustainability goals.
How do these 6 mega trends affect your business? Feel free to contact your Puratos representative to talk about how you can successfully respond to these trends.