The Changing Face of Retail

Nick Gladding Senior Retail Analyst, IGD • IGD provides leadership to the food and consumer goods industry, helping it prepare for, and face into, the strategic challenges ahead

• A research and education charity, IGD is the leading source of information and best practice on the consumer goods industry worldwide

43 countries visited

925 stores seen in 2018

24,000 store photos added to Retail Analysis in 2018

= IGD’s offices

Global retail Future retail trends Global channel outlook trends

1860-1950 1950-1965 1980-2000 >2020 Convenience store Supermarket Hard discount Omnichannel Limited offer of daily Self-service Price is key Seamless

products

of retail of Changing face face Changing

1900-1950 1965-1980 2000-2020 Department store Hypermarket Internet Large assortment at Everything under one Convenience and range acceptable prices roof

Europe +$450bn Asia & Oceania North America $1,157bn +$250bn

Latin America +$304bn Middle East & Africa +$415bn

2018 2023 CAGR 140 12%

120 10%

100 8% 80 6%

60 CAGR 4% 40

20 2%

0 0%

Sales through grocery bn) (US$ channels grocery through Sales Lidl Aldi Tesco Carrefour Rewe Edeka Auchan Leclerc Ahold X5 Retail Delhaize

What will drive retail?

“…and yesterday’s ‘wow’ quickly becomes today’s ‘ordinary’”

Source: Jeff Bezos, Amazon, 2018 Letter to Shareholders Global retailing trends

Doing Data good is Seamless Help me Anywhere, dictates good stores be healthy anytime the way business

Download your free copy from www.igd.com/igdfutures

46%

of supply chain experts say they are prioritising developing a data- driven business culture*

74%

of UK shoppers say they’ve become more aware of the environmental impact of plastic packaging in the last 12 months*

Amazon: no checkouts Auchan: no staff

Colruyt’s SmartWithFood Ingred.io: ingredient checker

3.2bn users of social media worldwide each month

$86bn global value of consumer spend on mobile apps Amazon and Snapchat in 2017

Global channel trends

1.600 +$220BN 2018 2023 1.400

1.200 +$115BN 1.000

800 +$167BN 600

+$104BN Sales bn) Sales (US$ 400 +$100BN 200

0 Supermarkets Hypermarkets Discount Convenience Online Specialist Stores

50% 2018 2023

40.9% 39.0% 40%

29.5% 30% 27.0%

20% 16.9% 15.3% 11.6%12.1% 10%

4.5% Share Share market retail globalof 2.2% 0.5% 0.5% 0% Supermarkets Hypermarkets Discount Convenience Online Specialist Stores

Co-op, UK

Spar and Londis, Ireland

Aldi UK Aldi Nord Germany Front of store food-to-go fixture Ingredients for one recipe in the same fixture

Lidl UK Lidl US Lidl UK “Blue Monday” featured blue packaged products Lidl UK The more people retweeted / Liked posts on within Pick of the Week social media, the lower the price dropped

1. Anticipate and adapt to changing consumer wants and needs: Businesses need to be agile to retain relevance in this fast-paced environment

2. Future proof your business by embracing the five global trends: Data, sustainability, store reinvention, health and social commerce

3. Back the winning growth channels: Drive forward with faster-growing channels and future-proof existing stores

Download your free copies from www.igd.com/igdfutures